A negative supply​ shock, such as the OPEC oil price increases of the early​ 1970s, can be illustrated by a shift to the​ ______________ of the​ short-run aggregate supply curve and a shift​ _________________ of the​ short-run Phillips curve.

Answers

Answer 1

Answer: Leftward; upwards.

Explanation: A Supply shock is a term used to describe the sudden and unexpected change in the supply of a given product or commodity usually indicated by the leftward shift if the shock is negative in the aggregate supply curve and an upward change in direction in the Phillips curve both on the short run. Both curves are used to demonstrate graphically the impacts of shifts in supply for a given product or commodity.


Related Questions

Geese Company utilizes the LIFO retail inventory method. Its cost-to-retail percentage is 60% based on beginning inventory and 64% based on current-period purchases. The company determined that beginning inventory at retail was $200,000 and that during the current period a new layer was added with retail value of $50,000. The cost of ending inventory should be

Answers

Answer:

$152,000

Explanation:

Calculation for the cost of the ending inventory

First step is to calculate the cost-to-retail percentage of the beginning inventory amount

Using this formula

Beginning Inventory =Cost-to-retail percentage*Beginning inventory at retail

Let plug in the formula

Beginning Inventory =60%*$200,000

Beginning Inventory =$120,000

Second step is to calculate current-period purchases percentage of the new layer amount

Using this formula

Current period purchases= Purchases percentage* New layer

Let plug in the formula

Current period purchases=64%*50,000

Current period purchases=$32,000

The last step is to find the cost of the ending inventory using this formula

Ending inventory cost=Beginning Inventory+Current period purchases

Let plug in the formula

Ending inventory cost=$120,000+$32,000

Ending inventory cost=$152,000

Therefore the cost of the ending inventory will be $152,000

A promotion related to the movie Pacific Rim Uprising was seen in Target stores throughout the United States. The sales promotion was designed to maximize the consumer's attention to a DVD release and provide storage for the products. This type of sales promotion is referred to as a

Answers

Answer:

This type of sales promotion is referred to as a Dealer Sales Promotion (Trade Promotion).

Explanation:

The Dealer Sales Promotion, otherwise known as Trade Promotion, is aimed at Dealers, designed to maximize the attention of consumers, and provide storage for the products in Target stores throughout the United States.  The promoters want Pacific Rim Uprising to be seen by consumers, so that their attention is galvanized, and to get Target stores to create the space for the DVD upon the film's release, through cooperative advertising.   It is not aimed directly at consumers or salespersons, but dealers.

Vaughn Manufacturing is constructing a building. Construction began in 2020 and the building was completed 12/31/20. Vaughn made payments to the construction company of $3114000 on 7/1, $6456000 on 9/1, and $5950000 on 12/31. Weighted-average accumulated expenditures were

Answers

Answer:

$3,709,000

Explanation:

7/1 Time weighted amount = $3,114,000 * 6/12 = $1,557,000

9/1 Time weighted amount =  $6,456,000 * 4/12 = $2,152,000

12/31 Time weighted amount = $5,950,000 * 0/12 = $0

Weighted-average accumulated expenditures = 7/1 Time weighted amount + 9/1 Time weighted amount + 12/31 Time weighted amount

Weighted-average accumulated expenditures = $1,557,000 + $2,152,000 + 0

Weighted-average accumulated expenditures = $3,709,000

The two main types of e-commerce are

Answers

Answer:

B2B (Business to business) and B2C (Business to consumer)

Emira wants to buy a classic drawing from an art centre in Kuala Lumpur. She managed to secure a painting by a renowned Malaysian artist that costs her RM99,800. Currently, she only has RM12,650 in her savings account and she intends to use 70% of her saving to fund the purchase. If she borrows the remaining amount from Bank Atlantis that levies 4.77% of interest rates, determine the total interest payment that she will pay if the agreement takes 10 years of settlement.

Answers

Answer:

RM23,617.80

Explanation:

cost of the painting RM99,800

she has RM12,650 on her bank account and she will use 70% = RM8,855 as down payment. She will borrow the rest = RM99,800 - RM8,855 = RM90,945

interest charged on the loan 4.77% / 12 = 0.3975%

120 monthly periods (10 years)

using the present value formula to determine the monthly payment:

PV = monthly payment x annuity factor

monthly payment = PV / annuity factor

PV = 90,945

annuity factor (120 periods, 0.3975%) = 95.26168

monthly payment = 90,945 / 95.26168 = 954.69

total payments = 120 x 954.69 = RM114,562.80

interests paid = RM114,562.80 - RM90,945 = RM23,617.80

"Your customer has been declared legally incompetent and his daughter has presented the proper legal papers appointing her as the guardian. Which statement is TRUE?"

Answers

Answer: B. Trading instructions can be accepted only from the daughter

Explanation:

The customer has been declared legally incompetent which means that he should not be making decisions that have to do with something as serious as trading instructions as he will not be able to comprehend them.

The only person that should therefore take over such roles would be his daughter who is a legal guardian. As she is not his guardian, she is able to take such decisions for him and so the trading instructions should be accepted only from the daughter.

Burke's Corner currently sells blue jeans and T-shirts. Management is considering adding fleece tops to its inventory to provide a cooler weather option. The tops would sell for $53 each with expected sales of 4,300 tops annually. By adding the fleece tops, management feels the firm will sell an additional 285 pairs of jeans at $65 a pair and 420 fewer T-shirts at $26 each. The variable cost per unit is $36 on the jeans, $16 on the T-shirts, and $31 on the fleece tops. With the new item, the depreciation expense is $33,000 a year and the fixed costs are $76,000 annually. The tax rate is 35 percent. What is the project's operating cash flow?

Answers

Answer:  $‬26,282.25‬

Explanation:

The operating cash-flow will be the amount of cash the company got from sales less the amount they would have to pay on taxes.

Cash from tops

= (Sales price - Variable costs) * quantity

= ( 53 - 31) * 4,300

= $94,600

Cash from jeans

= ( 65 - 36) * 285

= $8,265

Cash from jeans

= (26 - 16) * -420

= -$4,200

As this deals with cash, a tax adjusted depreciation will need to be added back because it is a non cash expense and fixed costs will have to be deducted.

Pre-tax operating cash-flow = 94,600 + 8,265 - 4,200 - 76,000

= $22,665‬

Post-tax Project Operating cash-flow

= $22,665‬ * ( 1 - 0.35) + (depreciation * tax)

= $22,665‬ * ( 1 - 0.35) + (33,000 * 0.35)

= $14,732.25‬ + 11,550

= $‬26,282.25‬

according to the nist the process of identifying risk, assessing risk, and taking steps to reduce risk to an

Answers

Answer: Risk management

Explanation:

According to the nist, the process of identifying risk, assessing risk, and taking steps to reduce risk to an acceptable level is referred to as the risk management.

Risk management simply has to do with the identification of risks before they occur. In such scenarios, the business owners can either avoid the risk or minimize the impact of the risk.

A portfolio to the right of the market portfolio on the CML is: Group of answer choices a lending portfolio. an inefficient portfolio. a borrowing portfolio.

Answers

Answer:

a borrowing portfolio.

Explanation:

A borrowing portfolio is a portfolio to the right of the market portfolio. It is on the right half of the line. It shows that an investor can purchase the market portfolio and still borrow money so as to purchase more.

CML is known as the the capital market line. It shows the most advantageous portfolios that are a combination of risk and return.

Answer:

a borrowing portfolio.

Explanation:

A borrowing portfolio is a portfolio to the right of the market portfolio. It is on the right half of the line. It shows that an investor can purchase the market portfolio and still borrow money so as to purchase more.

CML is known as the the capital market line. It shows the most advantageous portfolios that are a combination of risk and return.

Explanation:

An invoice of $600 for merchandise purchased is showing 3​/15, ​n/30 as terms of credit. If the invoice is paid on or before the fifteenth day after the invoice​ date, the amount to be paid is​ ________.

Answers

Answer:

Amount Payable or paid = $582

Explanation:

The terms of purchase state that the buyer will be entitled to a 3% cash discount if the payment for the purchases is made within 15 days of the purchase or invoice date.

Thus, if the payment is made on or within the fifteen days of invoice date, the cash discount that will be received is,

Discount = 600 * 0.03 = $18

So, the amount that will be payable for the merchandise will be,

Amount Payable or paid = 600 - 18  = $582

Jerry deposited $10,000 in a bank account, and 10 years later he closes out the account, which is worth $18,000. The annual rate of interest that Jerry has earned over the 10 years is closest to:

Answers

Answer:

r=  6.054% per year

Explanation:

given that

principal P=  $10,000

final amount A= $18,000

time t= 10 years

To find the annual rate we will use the formula below and solve for r

[tex]r = [(\frac{A}{P} )^\frac{1}{t} - 1][/tex]

Substituting our data into the expression and solving for r we have

[tex]r = [(\frac{18000}{10000} )^\frac{1}{10} - 1]\\\\r = [(1.8 )^\frac{1}{10} - 1]\\\\r = [(1.8 )^0^.^1 - 1]\\\\r = [(1.8 )^0^.^1 - 1]\\r={1.06054-1}\\\\r= 0.06054[/tex]  

Calculate rate of interest in percent

r = 0.06054* 100

r=  6.054% per year

On March 15, a fire destroyed Sheridan Company's entire retail inventory. The inventory on hand as of January 1 totaled $5900000. From January 1 through the time of the fire, the company made purchases of $2032000, incurred freight-in of $242000, and had sales of $4140000. Assuming the rate of gross profit to selling price is 20%, what is the approximate value of the inventory that was destroyed

Answers

Answer:

the approximate value of the inventory that was destroyed is $4,862,000.

Explanation:

Use the Gross Profit percentage to find the value of the inventory that was destroyed.

Sales                                                          $4,140,000

Less Cost of Goods Sold

Opening Inventory          $5,900,000

Add Purchases                $2,032,000

Add Freight In                     $242,000

Available                            $8,174,000

Less Inventory Lost         ($4,862,000)

Cost of Sales                                             (3,312,000)

Gross Profit at 20%                                    $828,000

Conclusion :

The Value of  inventory that was destroyed is $4,862,000.

how will a new front desk manager address a problem of lateness in a hotel.​

Answers

Answer:

They will have a system like a lot book where they would take in the visitors details and then Mark in or out and time of arrival and leaving

Hope this helps :)

Explanation:

Jamal lost his job as a shipbuilder. His plant closed down "temporarily" but never reopened and will not. Jamal's skills are very specialized and no longer in demand. His unemployment is best classified as .

Answers

Answer:

Structural unemployment

Explanation:

Since Jamal's specialized skills are no longer in demand, this is a clear example of structural unemployment.

Structural unemployment is a situation that exists when the skills one can offer and the available jobs are not matched. It is caused by changes in technology thereby causing the skills that one possesses to be old fashioned. Jamal would have to learn new skills that are in demand to be employable.

A location decision for a traditional department store (e.g., Macy's) would tend to have what type of focus? revenue focus environmental focus labor focus education focus cost focus

Answers

Answer: revenue focus

Explanation:

A location decision for a traditional department store (e.g., Macy's) would tend to have revenue focus. For every organization or company, revenue plays a vital role in the organization.

A traditional department store will shift its focus to a location whereby it can meet the needs of the people daily and generate as much revenue as possible.

Which method of evaluating capital investment proposals uses present value concepts to compute the rate of return from the net cash flows

Answers

Answer:

Internal rate of return

Explanation:

The internal rate of return is that return in which the net present value equivalent to zero

i.e.

Net present value = 0

That means

Initial investment = Present value of cash inflows after charging the discounting factor like 10% 12% etc

So as per the given situation, the internal rate of return is the correct answer

1. Noor Patel has had a busy year! She decided to take a cross-country adventure. Along the way, she won a new car on "The Price Is Right" (valued at $15,500) and won $500 on a scratch-off lottery ticket (the first time she ever played). She also signed up for a credit card to start the trip and was given a sign-up bonus of $100. How much will she have to include in her federal taxable income?

2A. What is the amount of taxes for a head of house hold with a taxable income of $57,500 with a rate of 25%?

B. What is the amount of taxes for a single person with a taxable income of $35,000 with a rate of 15%?

C. What is the amount of taxes for a married couple filling jointly with a taxable income of $70,700 with a rate of 15%?

Answers

Answer:

1. 16,100

Explanation:

To get how much she would include in her federal taxable income. We would have to add up these values:

The car won on the price is right + scratch off lottery + sign up bonus.

15,500 + 500 + 100

=$16,100

2a.

head of household

0 to 9275 at 10% = 927.5

(37650 - 9275)*15% = 4256.1

(57500 - 37650)*25% = 4962.5

total = 927.5 + 4256.1 + 4962.5

= 10146.1

2b

single person

0 to 9275 at 10% = 927.5

(35000-9275)*10% = 3858.75

total = 927.5 + 3858.75

= 4786.25

2c

for married couple

0 to 18550 at 10% = 1855

(70700-1855)*15% = 7822.5

total = 1855 + 7822.5

=9677.5

Say the marginal tax rate is 30 percent and that government expenditures do not change with output. Say also that the economy is at potential output and that the deficit is $200 billion.Required:a. What is the size of the cyclical deficit?b. What is the size of the structural deficit?c. How would your answers to a and b change if the deficit was still $200 billion but output was $200 billion below potential?d. How would your answers to a and b change if the deficit was still $200 billion but output was $100 billion above potential?

Answers

Answer:

a. The Cyclical deficit refers to the deficit arising from the difference between the potential output and the actual output.

The question assumes that the economy is producing at potential which means actual output equals potential output.

Cyclical Deficit = Tax rate * ( Potential Output - Actual Output)

Cyclical Deficit = 0.3 * 0

Cyclical Deficit  = $0

b. Structural deficit occurs even when the economy is at potential because it refers to Government deficits that happen when the economy is experiencing normal activity.

Structural Deficit = Actual deficit - Cyclical deficit

Structural Deficit = 200 billion - 0

Structural Deficit = $200 billion

c. Output is $200 billion below potential

Cyclical Deficit = Tax rate * ( Potential Output - Actual Output)

Cyclical Deficit = 0.3 * 200

Cyclical Deficit  = $60 billion

Structural Deficit = Actual deficit - Cyclical deficit

Structural Deficit = 200 billion - 60

Structural Deficit = $140 billion

d. Output is $100 billion above potential

Cyclical Deficit = Tax rate * ( Potential Output - Actual Output)

Cyclical Deficit = 0.3 * -100 as actual is above potential

Cyclical Deficit  = -$30 billion

Structural Deficit = Actual deficit - Cyclical deficit

Structural Deficit = 200 billion - (-30)

Structural Deficit = $230 billion

Data pertaining to the current position of Forte Company are as follows:

Cash $412,500
Marketable securities 187,500
Accounts and notes receivable (net) 300,000
Inventories 700,000
Prepaid expenses 50,000
Accounts payable 200,000
Notes payable (short-term) 250,000
Accrued expenses 300,000

Required:
Compute:
a. The working capital.
b. The current ratio.
c. The quick ratio.

Answers

Answer:

Forte Company

Computation of :

a. The working capital = Current Assets minus Current Liabilities

= $1,650,000 - $750,000

= $900,000

b. The current ratio = Current assets/Current liabilities

= $1650,000/$750,000

= 2.2 : 1

c. The quick ratio = (Current asset minus Inventory)/Current liabilities

= ($1,650,000 - 750,000)/$750,000

= $900,000/$750,000

= 1.2 : 1

Explanation:

a) Data and Calculations:

Cash                                                   $412,500

Marketable securities                          187,500

Accounts and notes receivable (net) 300,000

Inventories                                          700,000

Prepaid expenses                                50,000

Total Current Assets                     $1,650,000

Accounts payable                              200,000

Notes payable (short-term)               250,000

Accrued expenses                            300,000

Total Current Liabilities                  $750,000

b) Forte Company's working capital is the difference between the current assets and the current liabilities.  In this case, it is very positive with a huge sum of $900,000.

c ) Forte Company's current ratio is an expression of the relationship between current assets and current liabilities.  It shows how much of current liabilities that current assets can cover.  The ability of the management of Forte Company to settle its current obligations from the current assets is worked out under this ratio.

d) Forte has a quick ratio of more than 1 : 1.  It is similar to the current ratio but with the omission of the Inventory and Prepaid Expenses which are regarded as always taking longer to sell and recover respectively.

Assume you have a margin account with a 50% initial margin. You purchase 100 shares of stock at $80 per share. The price increases to $100 per share. What is the net value of your investment (margin) now

Answers

Answer:

Net value of the investment (margin) is $6,000

Explanation:

The initial margin = (100 shares * $80) * 50%

The initial margin = $4,000

Increase in the Margin value = 100 shares* ($100-$80)

Increase in the Margin value = 100 shares * $20

Increase in the Margin value =$2,000

Net value of the investment (margin) = $4,000 + $2,000

Net value of the investment (margin) = $6,000

Which of the following methods is appropriate for a business whose inventory consists of a relatively small number of unique, high-cost items?
a. FIFO
b. average
c. LIFO
d. specific identification

Answers

Answer: Specific identification

Hope it is correct

D specific identification

A company has established 7 pounds of Material J at $2 per pound as the standard for the material in its Product Z. The company has just produced 1,000 units of this product, using 7,200 pounds of Material J that cost $13,080. The direct materials quantity variance is:

Answers

Answer:

-$400 unfavorable

Explanation:

The computation of direct materials quantity variance is shown below:-

Direct material quantity variance = (Standard Quantity × Standard Price) - (Actual quantity × Standard price)

= (1,000 × 7 × $2) - (7,200 × $2)

= $14,000 - $14,400

= -$400 unfavorable

Therefore for computing the direct material quantity variance we simply applied the above formula.

An investment adviser representative's friend provides him with a list of 10 prospective clients. The representative agrees to pay his friend a referral fee for each person on the list that opens an account with the adviser. Which statement is TRUE

Answers

Answer: C. The arrangement is permitted only if it is in writing between the investment adviser and the friend and the arrangement is disclosed in writing to any customer opening an account

Explanation:

The friend in this case will be ruled to be a Solicitor under SEC Rules as they are referring clients to the Investment Adviser for a fee.

As such this business relationship between the friend and the Investment Adviser representative will fall under SEC Rule 206(4)-3 Cash payments for client solicitations. This rule makes it clear amongst other things that the investment adviser will have to prepare a written disclosure document which will inform any customer opening an account  of the agreement between the adviser and his friend.

The profit-maximizing monopolist produces _____________ units and charges a price of _____________.

Answers

Answer: Q0; P3

Explanation:

The profit-maximizing monopolist produces Q0 units and charges a price of P3.

According to the exhibit graph, the monopolist will produce Q0 units. This is because a monopoly maximises profit at the point where Marginal Revenue equals Marginal Cost. Looking at the chart, the quantity of output where this happens is Q0.

The Monopolist will then charge a price of P3. After the profit-maximising output is realized, the way to find out the price the monopolist will sell at is the point where the output produced intersects with the Demand curve. At this point, the price listed is what people are willing to buy that amount of quantity for and so the Monopoly will sell at that price.

In your opinion, what are the forms of institutional advertising that are suitable for banks in Palestine with examples. Why??

Answers

Answer:

Institutional advertising for banks in Palestine should take into account the cultural sensibilities of the country.

As a muslim country, banks should take into account not only local Palestinian culture, but also general islamic culture when developing their advertising.

Palestine also has complex foreign relationships. Banks should also take this into account in order to create advertising that is effectively catered to the Palestinian people.

A cash equivalent is: Multiple Choice Another name for cash. Close to its maturity date but its market value may still be affected by interest rate changes.

Answers

Complete Question:

A cash equivalent is:

Group of answer choices

a) Generally is within 12 months of its maturity date.

b) Another name for cash.

c) An investment readily convertible to a known amount of cash.

d) Is not considered highly liquid.

e) Close to its maturity date but its market value may still be affected by interest rate

changes

Answer:

c) An investment readily convertible to a known amount of cash.

Explanation:

In Financial accounting, cash equivalents can be defined as any short term and highly liquid investments which can be easily converted or transformed to a known and standard amounts of cash and as such are subjective to little or no risk of changes in value.

This ultimately implies that, a cash equivalent is an investment readily convertible to a known amount of cash.

Under the statements of cash flow, cash equivalents can be classified broadly into three (3) categories and these are;

1. Operating activities.

2. Financing activities.

3. Investing activities.

Answer:

money

Explanation:

ROI, Residual Income, and EVA with Different Bases Envision Company has a target return on capital of 12 percent. The following financial information is available for October ($ thousands):

Software Division . Consulting Division Venture Capital Division

(Value Base) (Value Base) (Value Base)

Book Current Book Current Book Current

Sales $100,000 $100,000 $200,000 $200,000 $800,000 $800,000

Income 12,250 11,700 16,400 20,020 56,730 51,920

Assets 70,000 90,000 100,000 110,000 610,000 590,000

Liabilities 10,000 10,000 14,000 14,000 40,000 40,000

Required

a. Compute the return on investment using both book and current values for each division. Round answers to three decimal places.

Book Value Current Value

Software Answer ? Answer ?

Consulting Answer ? Answer ?

Venture Capital Answer ? Answer ?

b. Compute the residual income for both book and current values for each division. Use negative signs with answers, when appropriate.

Book Value Current Value

Software $Answer 3,850 $Answer 900

Consulting Answer 4,400 . Answer 6,820

Venture Capital Answer (16,470) Answer (1,880)

c. Compute the economic value added income for both book and current values for each division if the tax rate is 30 percent and the weighted average cost of capital is 10 percent. Use negative signs with answers, when appropriate. Book Value Current Value

Software $Answer ? $Answer ?

Consulting Answer ? Answer ?

Venture Capital Answer ? Answer ?

Answers

Answer:

a. ROI = income / Assets      

                                      Book Value       Current Value    

Software Division              0.175              0.13    

Consulting Division           0.164              0.182    

Venture Capital Division   0.093            0.088

Workings:

i. Book value

Software Division = 12,250/70,000=0.175

Consulting Division = 16,400/100,000=0.164  

Venture Capital Division = 56,730/610,000 =0.093

ii. Current value

Software Division = 11,700/90,000=0.13

Consulting Division = 20,020/110,000=0.182

Venture Capital Division= 51,920/ 590,000=0.088

b. Residual income = Income - {Asset x Return on capital 12% }

                                      Book Value       Current Value    

Software Division              3850              900    

Consulting Division           4400              6820    

Venture Capital Division   -16470           -18880

Workings:

i. Book value

Software Division = 12,250-(70,000*12%)=3850

Consulting Division = 16,400-(100,000*12%)=4400  

Venture Capital Division = 56,730-(610,000*12%) =-16470

ii. Current value

Software Division = 11,700-(90,000*12%)=900

Consulting Division = 20,020-(110,000*12%)=6820

Venture Capital Division= 51,920-(590,000*12%)=-18880

c. Economic Value Added ( EVA ) = Net Income After Tax - ( Amount of Capital x Weighted Average Cost of Capital [WACC] )

C.                     Software Division  

                            (Value Base)  

                                    Book            Current

Sales                           100,000          100,000

Income                          12,250           11,700

Assets                           70,000          90,000

Liabilities                      10,000           10,000

Capital invested           60,000          80,000

(Asset - Liabilities)

Tax on Income(30%)     3675            3510

Income after Tax            8,575           8,190

(Income - Tax on

income) (A)

Capital invested             6,000           8,000

* WACC - 10% ) (B)

EVA (C)=(A)-(B)                2,575            190

                       Consulting Division

                            (Value Base)

                                     Book            Current

Sales                         200,000        200,000

Income                        16,400           20,020

Assets                         100,000        110,000

Liabilities                      14,000         14,000

Capital invested           86,000       96,000

(Asset - Liabilities)

Tax on Income(30%)     4920            6006

Income after Tax           11,480           14,014

(Income - Tax on

income) (A)

Capital invested           8,600            9,600

* WACC - 10% ) (B)

EVA (C)=(A)-(B)              2,880            4,414

                     Venture Capital Division

                           (Value Base)

                                   Book            Current

Sales                        800,000       800,000

Income                      56,730          51,920

Assets                       610,000        590,000

Liabilities                    40,000         40,000

Capital invested        570,000        550,000

(Asset - Liabilities)

Tax on Income(30%)    17019          15576

Income after Tax          39,711         36,344

(Income - Tax on

income) (A)

Capital invested           57,000       55,000

* WACC - 10% ) (B)

EVA (C)=(A)-(B)              -17,289       -18,656

Acme Company’s production budget for August is 17,700 units and includes the following component unit costs: direct materials, $6.0; direct labor, $10.2; variable overhead, $6.2. Budgeted fixed overhead is $34,000. Actual production in August was 18,630 units. Actual unit component costs incurred during August include direct materials, $8.40; direct labor, $9.60; variable overhead, $7.00. Actual fixed overhead was $35,700. The standard fixed overhead application rate per unit consists of $2 per machine hour and each unit is allowed a standard of 1 hour of machine time.Required:Calculate the fixed overhead budget variance and the fixed overhead volume variance. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

Answers

Answer:

a. $1,700 U

b. $3,260 F

Explanation:

a. Fixed over head budget variance = Actual fixed overhead - Budgeted fixed overhead

Actual fixed overhead = $35,700

Budgeted fixed overhead = $34,000

Fixed overhead budget variance = $35,700 - $34,000

= $1,700 U

b. Fixed overhead volume variance = Budgeted fixed overhead - Standard fixed overhead

Standard fixed overhead application rate = $2 per machine hr × 1hr

= $2

Budgeted fixed overhead = $34,000

Standard fixed overhead = Standard hours for actual output × Budgeted rate

= (18,630 units × 1hr) × $2

= $37,260

Fixed overhead volume variance

= $34,000 - $37,260

= 3,260 F

A $5,000 bond with a coupon rate of 5.1​% paid semiannually has eight years to maturity and a yield to maturity of 8.9​%. If interest rates rise and the yield to maturity increases to 9.2​%, what will happen to the price of the​ bond?

Answers

Answer:

The bond's market price will decrease by $72.08 (1.83%) from $3,928.89 to $3,856.81.

Explanation:

bond's current market price:

$5,000 / (1 + 4.45%)¹⁶ = $2,491.35

$127.50 x 11.27483 (PV annuity factor, 4.45%, 16 periods) = $1,437.54

current market price = $3,928.89

if interests rise and YTM increases to 9.2%, then new market price:

$5,000 / (1 + 4.6%)¹⁶ = $2,434.80

$127.50 x 11.15305 (PV annuity factor, 4.45%, 16 periods) = $1,422.01

current market price = $3,856.81

Granger Inc. Comparative Balance Sheets December 31

Assets 2017 2016
Cash $80,800 $48,400
Accounts receivable 87,800 38,000
Inventory 112,500 102,850
Prepaid expenses 28,400 26,000
Long-term investments 138,000 109,000
Plant assets 285,000 242,500
Accumulated depreciation (50,000) (52,000)
Total $682,500 $514,750

Liabilities and Stockholders' Equity
Accounts payable $102,000 $67,300
Accrued expenses payable 16,500 21,000
Bonds payable 110,000 146,000
Common stock 220,000 175,000
Retained earnings 234,000 105,450
Total $682,500 $514,750


Granger Inc. Income Statement Data For the Year Ended December 31, 2017

Sales revenue $388,460

Less:
Cost of goods sold $135,460
Operating expenses, excluding depreciation 12,410
Depreciation expense 46,500
Income tax expense 27,280
Interest expense 4,730
Loss on disposal of plant assets 7,500 233,880
Net income $154,580

Additional information:

1. New plant assets costing $90,000 were purchased for cash during the year.
2. Old plant assets having an original cost of $51,750 and accumulated depreciation of $43,650 were sold for $1,350 cash.
3. Bonds payable matured and were paid off at face value for cash.
4. A cash dividend of $23,427 was declared and paid during the year.

Required:
Prepare a statement of cash flows for Granger Inc. using the direct method.

Answers

Answer:

                                       GRANGER INC.

       STATEMENT OF CASH FLOWS (USING INDIRECT METHOD)

                  FOR THE YEAR ENDED DECEMBER 31, 2017

                Particulars                                                    Amount$

Cash flow from operating activities

Net Income                                                                    154,580

Adjustments to reconcile net income to net cash

provided by operating activities  

Adjustment for non cash effects

Depreciation expense                                                   46,500

Loss on sale of plant assets                                           7,500

Change in operating assets & liabilities

Increase in Accounts receivable                                  -49,800

Increase in inventory                                                      -9,650

Increase in prepaid expenses                                        -2,400

Increase in accounts payable                                         34,700

Decrease in accrued expenses payable                       -4,500

Net cash flow from operating activities (a)                 176,930

Cash Flow from Investing activities

Old Plant assets sold                                                       1,350

New plant assets purchased                                         -90,000

Long-term investments purchased                                -29,000

Net cash Flow from Investing activities (b)                -117,650

Cash Flow from Financing activities

Cash dividends paid                                                        -23,427

Common stock issued                                                      45,000

Bonds paid                                                                        -36,000

Net cash Flow from Financing activities (c)                 -14,427

Net Change in cash c=a+b+c                                            44,853

Add: Beginning cash balance                                           48,400

Closing cash balance                                                        93,253

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