Answer: d. E(rA) ≥ E(rB) and σA ≤ σB
Explanation:
The options are:
a. E(rA) ≤ E(rB) and σA ≤ σB
b. E(rA) ≥ E(rB) and σA ≥ σB
c. E(rA) ≤ E(rB) and σA ≥ σB
d. E(rA) ≥ E(rB) and σA ≤ σB
Mean-variance criterion is when the means and the variances of the return of different portfolios are used as a basis to select a portfolio.
An investor will choose the portfolio that has a lower risk which is denoted by the standard deviation. Therefore, option D is correct.
Investment in human capital is very similar to investing in physical capital. True or false? Explain your answer.
Answer:
True.
Explanation:
This statement is true because investing in human capital and physical capital has the similarity that these assets will lead the organization to carry out its processes, achieve its objectives and goals, and generate liquidity, therefore the similarity is in the importance of capital for the organization.
Human capital can be more difficult to measure, as it is intangible, and physical capital is easier to measure and analyze what the return provides for organizational activities.
However, there are ways to measure how human capital positively impacts the company, so it is necessary to have an effective management that provides the best investment of the ideal human and physical capital for your needs.
On May 1, 2010, Ziek Corp. declared and issued a 10% common stock dividend. Prior to this dividend, Ziek had 100,000 shares of $1 par value common stock issued and outstanding. The fair value of Ziek 's common stock was $20 per share on May 1, 2010. As a result of this stock dividend, Ziek's total stockholders' equity:_________
Answer: did not change
Explanation:
From the question, we are informed that On May 1, 2010, Ziek Corp. declared and issued a 10% common stock dividend and that prior to this dividend, Ziek had 100,000 shares of $1 par value common stock issued and outstanding. We are further informed that the fair value of Ziek 's common stock was $20 per share on May 1, 2010.
As a result of this stock dividend, Ziek's total stockholders' equity did not change. The accounts involved belong to the stockholders' equity, therefore, there will be no change on the total stockholders equity.
The open interest on silver futures at a particular time is the Group of answer choices number of all long or short silver futures contracts outstanding. number of silver futures contracts traded during the day. number of silver futures contracts traded the previous day. number of outstanding silver futures contracts for delivery within the next month.
Answer:
number of all long or short silver futures contracts outstanding.
Explanation:
The open interest on silver futures at a particular time is the number of all long or short silver futures contracts outstanding. Open interest can be defined as the total or overall number of contracts (open long and short positions) outstanding in a futures market.
In stocks exchange, when a contract begins trading it has an open interest that is equal to zero and in future dates, more contracts are entered into as time passes by.
Additionally, majority of the contracts are liquidated before their maturity date.
The Extra Surplus Company's Balance Sheet for December 31, 2017 and the Income Statement for 2018 are shown below.
Extra Surplus Company
Balance Sheet
December 31, 2017
Assets
Cash $14,000
Accounts Receivable 7,000
Inventory 16,800
Property and Equipment, Net 28,000
$65,800
Liabilities and Stockholders' Equity
Accounts Payable $14,000
Notes Payable, Long-Term 7,000
Common Stock 28,000
Retained Earnings 16,800
$65,800
Extra Surplus Company
Income Statement
For the Year Ended December 31, 2018
Sales $23,400
Cost of Goods Sold 5,400
Salaries and Wage Expense 5,400
Interest Expense 1,800
Other Expenses 900
Net Income $9,900
Additional data:
A- Sales were $23,400; $14,400 in cash was received from customers.
B- Bought new land for cash, $18,000.
C- Sold other land for its book value of $9,000.
D- Paid $1,800 principal on the long-term note payable and $1,800 in interest.
E- Issued new shares of stock for $18,000 cash.
F- Cash dividends of $3,800 were declared and paid to stockholders.
G- Paid $10,300 on accounts payable.
H- No inventory purchases were made: other expenses were incurred on account.
I- All wages were paid in cash.
J- Other expenses were on account.
Required:
a. Prepare a balance sheet as of December 31, 2020.
b. Prepare the statement of cash flows using the direct method.
Answer:
The Extra Surplus Company
Balance Sheet
December 31, 2020
Assets
Cash $14,300
Accounts Receivable 16,000
Inventory 11,400
Property and Equipment, Net 37,000
$78,700
Liabilities and Stockholders' Equity
Accounts Payable $3,700
Other Expenses Payable 900
Notes Payable, Long-Term 5,200
Common Stock 46,000
Retained Earnings 22,900
$78,700
b. The Extra Surplus Company
Statement of Cash Flows, using the direct method:
December 31, 2020
Operating activities:
Cash from customers $14,400
Payment to suppliers (10,300)
Payment to labor (5,400)
Net cash from operating (1,300)
Investing activities:
Land sales 9,000
Land (18,000)
Net cash from investing (9,000)
Financing activities:
Issue of shares 18,000
Note Payable Repayment (1,800)
Interest paid (1,800)
Dividends (3,800)
Net cash from financing 10,600 10,600
Net Cash Inflow $300
Explanation:
a) Data and Calculations:
Extra Surplus Company
Balance Sheet
December 31, 2017
Assets Adjustment Balance
Cash $14,000 300 $14,300
Accounts Receivable 7,000 + 23,400 - 14,400 16,000
Inventory 16,800 - 5,400 11,000
Property and Equipment, Net 28,000 - 9,000 + 18,000 37,000
$65,800
Liabilities and Stockholders' Equity
Accounts Payable $14,000 -10,300 3,700
Notes Payable, Long-Term 7,000 -1,800 5,200
Common Stock 28,000 + 18,000 46,000
Retained Earnings 16,800 22,900
$65,800
ii) Extra Surplus Company
Income Statement
For the Year Ended December 31, 2018
Sales $23,400
Cost of Goods Sold 5,400
Salaries and Wage Expense 5,400
Interest Expense 1,800
Other Expenses 900
Net Income $9,900
Cash balance (beginning) $14,000
iii) Cash Receipts:
Cash from customers $14,400
Land sales 9,000
Issue of shares 18,000
Total receipts $41,400
iv) Cash Payments:
Land $18,000
Note Payable Repayment 1,800
Interest paid 1,800
Dividends 3,800
Accounts Payable 10,300
Salaries & Wages 5,400
Total payments $41,100
Cash Balance (Ending) $14,300
v) Retained Earnings:
Net Income $9,900
Beginning Retained Earnings 16,800
Dividends 3,800
Ending Retained Earnings $22,900
v) The Extra Surplus Company's Statement of Cash Flows can also be prepared using the indirect method. This method starts with the net income and adjusts working capital changes after adding back non-cash flow expenses in order to arrive at the net cash from operating activities. Other steps are similar to the direct method, which considers only the actual cash inflows and outflows.
The Doha Round of negotiations focuses on industrial and nontariff barriers, agriculture, services, and easing trade rules.
a. True
b. False
Answer:
True.
Explanation:
The Doha Round of negotiations focuses on industrial and non-tariff barriers, agriculture, services, and easing trade rules. It is a trade negotiation which is common among the world trade organizations (WTO) member countries. The main purpose of the Doha Round of negotiations is to enhance the international trading process through the application of revised trade rules and lower trade barriers.
This trade-negotiation round of the World Trade Organization was officially launched in November, 2001 in Doha, Qatar.
A company purchased money market funds with cash during the current year. Which of the following statements is correct?
A. This transaction will result in a decrease in cash from investing activities.B. This transaction will result in a decrease in cash from operating activities.C. This transaction will result in a decrease in cash from financing activities.D. This transaction will not cause a change in cash from operating, investing, or financing activities.
Answer: This transaction will not cause a change in cash from operating, investing, or financing activities.
Explanation:
When a company purchased money market funds with cash during the current year, it should be noted that this will transaction will not cause a change in cash from operating, investing, or financing activities. This is because the purchase was made with cash during the current year.
Titan Mining Corporation has 7.6 million shares of common stock outstanding, 280,000 shares of 4.5% preferred stock outstanding, and 165,000 bonds with a semi-annual coupon rate of 5.9% outstanding, par value $2,000 each. The common stock currently sells for $61 per share and has a beta of 1.15, the preferred stock has a par value of $100 and currently sells for $95 per share, and the bonds have 19 years to maturity and sell for 109% of par. The market risk premium is 7.1%, T-bills are yielding 3.5%, and the company’s tax rate is 25%.
A. What is the firm’s market value capital structure?
B. If the company is evaluating a new investment project that has the same risk as the firm’s typical project, what rate should the firm use to discount the project’s cash flows?
Answer:
A. The Capital structure is : 4.23 % - Equity, 6.59 % - Preferred Shares and 89.17 % - Debt
B. The firm should discount the project’s cash flows at 4.45 %.
Explanation:
Total Market Value = Market Value of Equity + Market Value of Debt + Market Value of Preferred Shares
Market Value of Equity = 280,000 shares × $61
= $17,080,000
Market Value of Preferred Shares = 280,000 shares × $95
= $26,600,000
Market Value of Debt = 165,000 bonds × $2,000 × 109%
= $359,700,000
Total Market Value = $403,380,000
Capital Structure :
Weight of Equity = $17,080,000 / $403,380,000 × 100
= 4.23 %
Weight of Preferred Shares = $26,600,000 / $403,380,000 × 100
= 6.59 %
Weight of Debt = $359,700,000 / $403,380,000 × 100
= 89.17 %
Thus, the market value capital structure is : 4.23 % - Equity, 6.59 % - Preferred Shares and 89.17 % - Debt
Firms use the Weighted Average Cost of Capital (WACC) to discount the project’s cash flows.
Cost of Debt, r
PV = $2000 × 109 % = - $2,100
PMT = ($2,000 × 5.9%) ÷ 2 = $59
n = 19 × 2 = 38
P/YR = 2
FV = $2,000
r = ?
Using a Financial Calculator, Pretax cost of debt, r is 5,47 %
After tax cost of debt = Interest × ( 1 - tax rate)
= 5,47 % × ( 1 - 0.25)
= 4.10 %
Cost of Equity
Cost of Equity = Return on Risk Free Security + Beta × Return on Risk Premium Portfolio
= 3.5 % + 1.15 × 7.1%
= 11.67 %
Cost of Preference Stock
Cost of Preference Stocks = 4.5%
WACC = ke(W/V) + kd(D/V) + kp(P/V)
= 11.67 % × 4.23 % + 4.10 % × 89.17 % + 4.5% × 6.59 %
= 4.45 %
The Marketing Control Statement is a valuable statement for marketers because it only utilizes costs that the marketer can control. True False
Answer: True
Explanation:
The Marketing Control Statement is quite beneficial to marketers as it avoids fixed costs and shows them the variable and programmed costs both of which can be controlled. This enables them to know what they need to and can change in a way that they can come up with an optimal marketing mix to ensure profitability.
It is also a very uncomplicated statement to prepare which further ingratiates it to marketers who would like to avoid all the jargon of income statements.
The given statement is true.
The following information should be considered:
The Marketing Control Statement should be beneficial for marketers as in this the fixed cost are ignored and the variable & other cost should be controlled. Due to this, the profitability should increasedTherefore we can conclude that The given statement is true.
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Which of the following statements about executing and evaluating the promotion program is most accurate?
a. Although there are five elements in the promotional mix, the only element that reallybenefits from an IMC audit is advertising.
b. Most IMC programs have no difficulty creating a pretest, but posttests are much moredifficult to construct since a number of unknown elements must be measured.
c. To fully benefit from IMC programs, companies must create and maintain a test-resultdatabase that allows comparisons of the relative impact of the promotional tools and theirexecution options in varying situations.
d. The ideal IMC program does not need any evaluation if it is executed according to plan.E. The most effective IMC audits are external. Internal audits tend to skew results to fitexpectations.
Answer: To fully benefit from IMC programs, companies must create and maintain a test-resultdatabase that allows comparisons of the relative impact of the promotional tools and their execution options in varying situations.
Explanation:
Out of the statements about executing and evaluating the promotion program that were given in the question, the option that is most accurate is that to fully benefit from IMC programs, companies must create and maintain a test-result database that allows comparisons of the relative impact of the promotional tools and their execution options in varying situations.
Therefore, option C is the correct answer.
A creamery shop sells its special ice cream for $4.50 a quart. It costs them $3.00 a quart to make it. The daily demand for this flavor is normally distributed with a mean of 35 quarts and a standard deviation of 4 quarts. Unsold ice cream is sold each day to a local restaurant at $1.50 per quart. What is the service level and corresponding optimal stocking level?
Answer and Explanation:
The computation of the service level and the corresponding optimal stocking level is shown below:
Given that
Selling price = SP = $4.50
Cost price = CP = $3.00
So,
Salvage value = V = $1.50
Average daily demand (d) = 35 quarts
The standard deviation of daily demand = 4 quarts
based on the above information
Overage cost = (Co) is
= CP - V
= $3.00 - $1.50
= $1.50
Now
Underage cost= (Cu)
= SP - CP
= $4.50 - $3.00
= $1.50
So,
Service level is
= Cu ÷ (Co + Cu)
= 1.50 ÷ (1.50 + 1.50)
= 1.50 ÷ 3.00
= 0.50
= 50%
Now
At 50 % service level, the value of Z is 0
So,
Optimal stocking level is
= d + Z × standard deviation
= 35 + (0 × 4)
= 35 + 0
= 35 quarts
A bond with a par value of $1,000 and an annual coupon has a yield to maturity of 5.60% and a current price of $975. If the bond has 18 years to maturity, what is its current yield?
Answer:
Current Yield is 5.74%
Explanation:
Current yield is the ratio of coupon payment of a bond to its current market price. It is calculated by using coupon payment and the current market value of the bond.
Coupon Payment = $1,000 x 5.6% = $56
Current market price = $975
Formula for Current yield is as follow
Current Yield = Annual Coupon Payment / Current Market Price
Current Yield = $56 / $975
Current Yield = 0.0574% = 5.74%
The following information describes the production activities of Mercer Manufacturing for the year.
Actual direct materials used 28,000 lbs. at $4.90 per lb.
Actual direct labor used 8,650 hours for a total of $174,730
Actual units produced 51,600
The budgeted standards for each unit produced are 0.50 pounds of direct material at $6.85 per pound and 10 minutes of direct labor at $21.20 per hour.
1. Compute the direct materials price and quantity variances. Do not round intermediate calculations.
2. Compute the direct labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable. Do not round intermediate calculations.
Answer:
Actual Quantity = 28,000
Actual Price = 4.90
Standard Quantity = 25,800
Standard Price = 4.85
1)a. Direct Material Price variance = (Standard price – Actual Price)*Actual Quantity
= (4.85 - 4.90) * 28,000
= $1,400 U
b. Direct Material Quantity variance = (Standard Quantity – Actual Quantity)*Standard price
= (51,600*0.5 - 28,000)*4.85
= $10,670 U
2) a. Direct Labor Rate Variance = (Standard Rate – Actual Rate)*Actual Hours
= (21.20 - 20.2) * 8,650
= $8,650 F
b. Direct Labor Efficiency variance = (Standard Hours – Actual Hours)*Standard rate
= (51,600*1/6 - 8,650) * 21.20
= $1,060 U
The term crowding-out effect refers to a situation in which a government _______________ results in ______________ interest rates, causing ______________ in private spending on investment and consumer durables.
Answer: Deficit; higher; a decrease
Explanation:
The term crowding-out effect refers to a situation in which a government deficit results in higher interest rates, causing a decrease in private spending on investment and consumer durables.
The Crowding-out effect is what happens when a Government increases its spending past its revenues and gets a budget deficit. In other to balance its books therefore it will borrow heavily.
If the Government is such a large one like the American Government or the British Government, the borrowing might be so large that it will have the effect of reducing the amount of loanable funds in the market thereby increasing the interest rates due to a reduced supply of loanable funds.
As there are now increased interest rates, it will be more expensive for companies to borrow to spend on investment or for consumers to spend on durables. It will have the effect of crowding out the private sector.
A bank that uses a computer system to record deposits and withdrawals from its customers' checking accounts is using a(n):
Answer: transaction processing system
Explanation:
A bank that uses a computer system to record deposits and withdrawals from its customers' checking accounts is using a transaction processing system.
Transaction processing system is when the system is used in the processing of transactions and data is being sent and recorded in the system.
"One of the ten IG principles is a Continuous improvement. What is the importance of this principle to the organization program"
Answer:
the importance is to provide periodic program review and necessary adjustments against gaps and it short comings
Explanation:
Information governance is a full way of managing information in a corporation by the implementation of a series of processes, controls and roles. It can be simply said to be a process of managing information assets as this will cause a balance between security and usage.
continuous improvement is one of its 10 principles. And it simply means that programs in information governance have to go through continuous reviews and updates as doing such will help to reduce shortcomings.
The Discount on Bonds Payable account is: Multiple Choice A contra equity. A contra expense. A liability. A contra liability. An expense.
Answer:
Is a contra account to bonds payable
Explanation:
In 2019, Dan transferred 5-year property to Fleck Corp. in a tax-deferred Section 351 transaction. Fleck took Dan's adjusted basis in the property. Dan originally placed the depreciable property in service in 2017. What year of the depreciation schedule will Fleck use to depreciate the property
Answer:
The property will be depreciated using the remaining 3 years of its life after the tax-free incorporation transfer year. This is because Dan had already depreciated the property for 2 years before the transfer.
Explanation:
Sec. 351 allows a tax-free incorporation transfer if certain requirements are met, including that the property must be transferred to Fleck Corporation by Dan in exchange for stock in Fleck Corporation, and, immediately after the exchange, the Fleck Corporation is in control.
If the rate of inflation is 2.2% per year, the future price pt (in dollars) of a certain item can be modeled by the following exponential function, where t is the number of years from today.
p(t)=1200(1.039^t)
Find the current price of the item and the price 9 years from today.
Answer:
1693.25
Explanation:
The computation of the current price of the item and the price 9 years from today is shown below:-
p(t) = 1,200 × (1.039)^t
Now, the current price can be found by putting t = 0
p(0) is
[tex]1,200\times (1.039)^0 = $1,200[/tex]
The price 10 years from today
p(9) is
[tex]1,200\times (1.039)^9[/tex]
Now we will solve the above equation
= 1,200 × 1.411041958
= 1693.25035
or
= 1693.25
Because of higher gasoline prices, firms using gasoline intensively in the production or distribution of their goods have experienced:_______.
Answer:
An upward shift in their MC, AVC, and ATC curves.
Explanation:
A firm has sales of $1,220, net income of $226, net fixed assets of $544, and current assets of $300. The firm has $101 in inventory. What is the common-size statement value of inventory
Answer:
11.97%
Explanation:
Common size statement value of inventory is where all accounts are expressed as a percentage of total assets.
Total assets = Net fixed assets + Current assets
= $544 + $300
= $844
Common size statement value of inventory = Inventory ÷ Total assets
= $101 ÷ $844
= 0.1197
= 11.97%
When a deliverable arrived, Craig met with the team member responsible
for ordering the deliverable to confirm it was the correct model and size.
Which of the following project elements was Craig monitoring in this scenario?
a. Budget
b. Schedule
c. Scope
d. Risk
Answer:
Project Element Craig Monitored in this scenario:
d. Risk
Explanation:
The element of the project that Craig monitored ensures that the deliverable conforms with the correct model and size because there is the risk that this could not conform if a deliverable was not not checked with the team member who ordered the deliverable. Since higher risks of deliverables not conforming to model and size would render the whole project unsuccessful, Craig has to meet with the team member responsible. In order words, the meeting between Craig and the team member for confirmation of correct model and size eliminates the risks of non-conformance.
In the example above when deliverable came and Craig met with the team member for ordering confirming whether the model and size was correct, Craig was monitoring Risk. So the correct option is D.
Risk refers to the possibility chances that the desired or the expected result will be obtained from the activities that are undertaken. Risk is directly related to the reward of such activity.
In the example above where Craig confirms whether the model and size of goods arrived were correct with the help of the team member who ordered such deliverable, risk was being monitored.In this case the risk can be denoted by value of 1 as the chances of getting the correct model and size are equal with chances of getting the incorrect model and size. Risk can be denoted by beta .[tex]\rm Risk = \beta[/tex]
Monitoring of risk is an important aspect so as to ensure whether the activities undertaken for the benefit of the business are standing true to their efforts or not.
Hence, the correct option is D that Craig was monitoring risk by checking the deliverable was correct in terms of model and size with the help of a team member.
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g An arbitrage opportunity arises when... Group of answer choices An investment has a high risk-return ratio. disparity between 2 or more prices allow investors to yield a sure profit the risk-free rate generates a positive alpha. a net investment is taken place within a portfolio
Answer:
disparity between 2 or more prices allow investors to yield a sure profit
Explanation:
Arbitrage is defined as the practice where there is simultaneous buying and selling of an asset so as to benefit from a price difference.
Usually the price differences occur in different markets, so the arbitrator acts as a supplier of the goods to market where goods are to be sold.
For example if a company buys fertiliser from a whole seller and immediately sells the goods to a farmer's cooperative at higher price this is arbitrage.
So abitrage opportunity is when disparity between 2 or more prices allow investors to yield a sure profit
"The technique which identifies the time period required to recover the cost of the investment is called the" ________________ method.
Answer:
Cash payback method
Explanation:
Cash payback technique is a method used by financial experts to analyse capital projects to see which ones they can invest in and which one to avoid.
This method is used to estimate the time it will take for a project to recoup the original cost of investment. It estimated when a business will payoff initial cost and start giving the investor profit.
Cash payback is easy to calculate
Cash payback = (Initial investment) ÷ (Estimated cash inflows each year)
Shorter cash payback is favourable as the investor gets back initial cost in a shorter period.
4. Suppose you hold a PUT option on Israeli shekels with a strike price of 3.4207s/$. If the spot rate on the final day of the option is 3.4329s/$, how much profit would you make trading $1,000,000? Should you do it?
Answer:
Profit $3,567
I would exercise my option by buying the shares before the expiration .
Explanation:
Calculation of how much profit would you make trading $1,000,000
First step is to multiply the spot rate on the final day by the trading amount
3.4329s*$1,000,000
=$3,432,900
Second step is to divide the spot rate option by the strike price
3,432,900/3.4207
=$1,003,567
Last Step is to find the profit
Profit =$1,003,567-$1,000,000
Profit=$3,567
Therefore the amount of PROFIT you would make trading $1,000,000 will be $3,567
Based on the above calculation I would exercise my option by buying the shares before the expiration .
Unlike direct materials, the sum of all the direct labor variances is always equal to the flexible budget variance.
A. True
B. False
Answer:
A. True
Explanation:
Unlike direct materials, the sum of all the direct labor variances is always equal to the flexible budget variance. Also, a negative direct labor efficiency variance is considered favorable one. And for a direct labor, if the efficiency and rate variances are both negative, then the flexible budget variance will be unfavorable. Therefore, the statement of the question is true.
Trevor Company discloses supplementary operating segment information for its three reportable segments. Data for 20X8 are available as follows:
Segment A Segment B Segment C
Sales $500,000 $300,000 $200,000
Traceable operating
expenses 250,000 120,000 90,000
Allocable costs for the year was $180,000. Allocable costs are assigned based on the ratio of a segment's income before allocable costs to total income before allocable costs. The 20X8 operating profit for Segment B was:_______.
A) $180,000.
B) $120,000.
C) $126,000.
D) $110,000.
Answer:
The correct answer is B.
Explanation:
Giving the following information:
Segment A Segment B Segment C
Sales $500,000 $300,000 $200,000
Traceable operating expenses 250,000 120,000 90,000
Profit= 250,000 180,000 110,000 = 540,000
Allocable costs for the year was $180,000.
First, we need to allocate costs to Segment B:
Segment B= 180,000/540,000= 0.33
Allocate= 0.33*180,000= 60,000
Now, we can calculate the profit:
Segment B profit= 180,000 - 60,000= 120,000
A catering company prepared and served 375 meals at an anniversary celebration last week using 3 workers. The week before, 2 workers prepared and served 225 meals at a wedding reception
a1. Calculate the labor productivity for each event. (Round your answers to 1 decimal place.) Anniversary Wedding meals/worker meals/worker
a2. For which event was the labor productivity higher?
Anniversary
Wedding
Answer:
for anniversary = 125
for wedding = 112.5
anniversary
Explanation:
Labour productivity = number of meals / total number of workers
for anniversary = 375 / 3 = 125
for wedding = 225 / 2 = 112.5
labour productivity is higher for the anniversary because one unit of labour produces more meals when compared to the wedding.
Carpenter Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 2,400 units. The costs and percentage completion of these units in beginning inventory were: 2 points Percent Complete 60% 55% Cost $ 7,000 $10,300 Materials costs Conversion costs 01:53:47 A total of 10,500 units were started and 8.900 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: eBook Materials costs Conversion costs $ 96,800 $171,000 References The ending inventory was 85% complete with respect to materials and 70% complete with respect to conversion costs.
How many units are in ending work in process inventory in the first processing department at the end of the month?
a. 4,000
b. 1,800
c. 8.100
d. 1,600
Answer:
a. 4,000
Explanation:
Units in ending inventory
= Units in beginning work in process + Units started into production - Units transferred to the next department
= 2,400 + 10,500 - 8,900
= 4,000 units
If the distribution of water is a natural monopoly, then:__________.
a. a single firm cannot serve the market at the lowest possible average total cost.
b. allowing for competition among different firms in the water-distribution industry is efficient.
c. average cost increases as the quantity of water produced increases.
d. multiple firms would likely each have to pay large fixed costs to develop their own network of pipes.
Answer:
d. multiple firms would likely each have to pay large fixed costs to develop their own network of pipes.
Explanation:
Option a is wrong because:
The initial investment is very high, therefore, the more firms competing will only increase the required investments and fixed costs associated with them, e.g. depreciation, maintenance. That is why the lowest average costs is generally achieved when only one firm serves this type of market.
Option b is wrong because:
A natural monopoly exists because it is extremely difficult for two or more competing firms to exist. Generally the required investment is very high, and the revenues are not large enough to allow two or more firms to compete.
Option c is wrong because:
Utilities require large initial investments, but once they are set up, the production costs are very small. I.e. the fixed costs are more relevant than the variable costs. Average production costs as decrease as the quantity produced increases.
In response to the new employee end-of-shift policy Brianna proposes that Ollie pay its employees on their breaks instead of making them clock out. Brianna is most likely utilize the ________ influence tactic
Answer: exchange
Explanation: Brianna is most likely to use the exchange influence tactic which is given as a tactic that suggests that making express or implied promises and trading favors. This is observed when she proposes that Ollie pay its employees on their breaks instead of making them clock out in response to the new employee end-of-shift policy. The tactics is especially useful for influencing peers and surbodinates.
