An organizationally-driven reason for outsourcing is that it can improve effectiveness by focusing on what the firm does best.

Answers

Answer 1

Answer:

True

Explanation:

Outsourcing is when a company gives some of its internal activities to an external party that takes the responsibility to get things done and one of the reasons for a company to do this is to get rid of activities that have to get done but that are not part of their core operations to be able to concentrate on their main activity and get those things done by experts which can help increase productivity. According to that, the answer is that the statement is true.

Related Questions

A company reports merchandise inventory on December 31 at $250,000 but LCM applied to items is $200,000. Record the journal entry to report merchandise inventory at the correct amount:

Answers

Answer:

The adjusting journal will be :

Loss on write down of Inventory $50,000 (debit)

Inventory $50,000 (credit)

Explanation:

The inventory must be presented at the Lower of Cost and Market Value.

The adjusting journal will be :

Loss on write down of Inventory $50,000 (debit)

Inventory $50,000 (credit)

The Loss on write down of Inventory is an expense in the trading account.

Answer:

See journal below

Explanation:

The journal entries below will be recorded in the books of account in order to report the merchandise inventory at the correct amount.

The cost of goods sold account Dr $50,000

($250,000 - $200,000)

To merchandise inventory account Cr $50,000

(Being record of inventory on LCM)

The cost of goods sold was debited with $50,000 while same amount was credited to merchandise inventory account.

Now that you have studied monopolistic competition, let's see how well you can distinguish a firm in a monopolistically competitive market from a firm in a perfectly competitive market. Given the description of the firm below, decide whether it applies to monopolistic competition, perfect competition, or both. You may have to adjust the scroll bar to see the complete list.
1. a firm that produces with excess capacity in
2. a firm that has a firm that sets price greater than marginal cost
3. a firm that may earn an econom profit or loss in the short run
4. a firm that faces a downward sloping demand curve.
5. a firm that that maximizes profits profit in the long by producing where MR = MC

Answers

Answer:

Monopolistic Competition:

4. a firm that faces a downward sloping demand curve.

Perfect Competition:

1. a firm that produces with excess capacity in

3. a firm that may earn in an economy profit or loss in the short run

5. a firm that that maximizes profits profit in the long by producing where MR = MC

Both:

2. a firm that has a firm that sets price greater than marginal cost.

Explanation:

Farmer Brown’s total cost curve is a. increasing at an increasing rate. b. increasing at a decreasing rate. c. increasing at a constant rate. d. decreasing.

Answers

The question is incomplete:

If Farmer Brown plants no seeds on his farm, he gets no harvest. If he plants 1 bag of seeds, he gets 5 bushels of wheat. If he plants 2 bags, he gets 9 bushels. If he plants 3 bags, he gets 12 bushels. A bag of seeds costs $120, and seeds are his only cost.

Farmer Brown's total-cost curve is

a. increasing at an increasing rate.

b. increasing at a decreasing rate.

c. increasing at a constant rate.

d. decreasing.

Answer:

a. increasing at an increasing rate.

Explanation:

To determine the answer, you can create a graph with the information given hich is attached.

You can see that the curve is increasing and because of that you can eliminate option d that is decreasing. Then, you have to consider that increasing at a constant rate would show an straight line which is not the case. Also, increasing at a decreasing rate would show a decreasing slope which is not what you see in the graph. Because of that, the answer is that Farmer Brown’s total cost curve is increasing at an increasing rate because the graphs shows an increasing slope.

assume the following information about the market and JumpMaster's stock. JumpMaster's beta = 1.50, the risk free rate 2%, the market risk premium is 10.0%. Using CAPM, what is the expected return for JumpMaster's stock?

Answers

Answer:

Expected market return = 17%

Explanation:

Given the Jump master’s beta = 1.50

Risk free rate = 2%

Market risk premium = 10%

To find the expected return we have to use the below formula.

Expected market return = Riskfree rate + Beta × Market risk premium

Now insert all the values in order to get the expected market return.

Expected market return = 2 + 1.50 × 10

Expected market return = 17%

One Step, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 27 years to maturity that is quoted at 105 percent of face value. The issue makes semiannual payments and has a coupon rate of 4 percent.

Requried:

a. What is the company's pretax cost of debt?

b. If the tax rate is 23 percent, what is the aftertax cost of debt?

Answers

Answer:

Before tax cost of debt=3.72%

After-tax cost of debt =2.87 %

Explanation:

The yield to maturity to Maturity van be worked out using the formula below:

YM =( C + F-P/n) ÷ ( 1/2× (F+P))

C- annual coupon,

F- face value ,

P- current price,

n- number of years to maturity

YM - Yield to maturity

DATA

C- 4%× 100 = 4, P- 105, F- 100

AYM = 4 + (100-105)/27 ÷ 1/2× (100+105)

=0.0372 × 100= 3.72%

Yield to maturity =3.72%

Before tax cost of debt = Yield to maturity

Before tax cost of debt=3.72%

After tax cost of debt =Before tax cost of debt × (1-T)

Before tax cost of debt = 3.72%

Tax rate = 23%

After-tax cost of debt = 3.72%× (1-0.23) =2.87 %

After-tax cost of debt =2.87 %

Suppose you know a company's stock currently sells for $70 per share and the required return on the stock is 14 percent. You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield. If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share?

Answers

Answer: $4.58

Explanation:

The required return is said to be evenly divided between a capital gains yield and a dividend yield.

That means that Dividend Yield = 7%

Capital gains yield = 7%

The Dividend Yield is based on the next dividend and given the expected return the dividend is;

Expected Return = Dividend Yield + Capital gains yield

Expected Return = Dividend(1 + g)/stock price + Capital gains yield

0.14 = Dividend ( 1 + 0.07)/70 + 0.07

70 * (0.14 - 0.07 ) = Dividend ( 1.07)

4.9 = Dividend ( 1.07)

Dividend = 4.9/1.07

Dividend = $4.58

The Murdock Corporation reported the following balance sheet data for 2016 and 2015:
2016 2015
Cash $ 96,245 $ 33,155
Available-for-sale securities (not cash equivalents) 24,000 102,000
Accounts receivable 97,000 83,550
Inventory 182,000 160,300
Prepaid insurance 3,030 3,700
Land, buildings, and equipment 1,284,000 1,142,000
Accumulated depreciation (627,000) (589,000)
Total assets $ 1,059,275 $ 935,705
Accounts payable $ 91,640 $ 165,670
Salaries payable 26,800 33,000
Notes payable (current) 40,300 92,000
Bonds payable 217,000 0
Common stock 300,000 300,000
Retained earnings 383,535 345,035
Total liabilities and shareholders' equity $ 1,059,275 $ 935,705
Additional information for 2016:
Sold available-for-sale securities costing $78,000 for $84,200.
Equipment costing $20,000 with a book value of $6,700 was sold for $8,550.
Issued 6% bonds payable at face value, $217,000.
Purchased new equipment for $162,000 cash.
Paid cash dividends of $28,500.
Net income was $67,000.
Required:
Prepare a statement of cash flows for 2016 in good form using the indirect method for cash flows from operating activities. (Amounts to be deducted should be indicated with a minus sign.)

Answers

Answer:

The Murdock Corporation

Statement of Cash Flows for the year ended December 31, 2016, using the indirect method:

Operating Activities:

Net Income $67,000

Add depreciation 38,000

Accounts receivable -$13,450

Inventory -$21,700

Accounts payable -$74,030

Salaries payable -$6,200

Notes payable (current) -$51,700

Net cash from operations -$62,080

Investing Activities:

Sale of securities $84,200

Sale of Equipment $8,550

New Equipment -$162,000

Net cash from investing activities -$69,250

Financing Activities:

Issue of bonds $217,000

Dividends -$28,500

Net cash from financing activities $188,500

Net cash flows $57,170

Explanation:

a) Data and Calculations:

Balance Sheet for 2016 and 2015:

2016 2015

Cash $ 96,245 $ 33,155

Available-for-sale securities

(not cash equivalents) 24,000 102,000

Accounts receivable 97,000 83,550

Inventory 182,000 160,300

Prepaid insurance 3,030 3,700

Land, buildings, and equipment 1,284,000 1,142,000

Accumulated depreciation (627,000) (589,000)

Total assets $ 1,059,275 $ 935,705

Accounts payable $ 91,640 $ 165,670

Salaries payable 26,800 33,000

Notes payable (current) 40,300 92,000

Bonds payable 217,000 0

Common stock 300,000 300,000

Retained earnings 383,535 345,035

Total liabilities and shareholders'

equity $ 1,059,275 $ 935,705

Additional information for 2016:

Proceeds from sale of securities = $84,200

Proceeds from sale of Equipment = $8,550

Proceeds from issue of bonds = $217,000

Cash Payments:

New Equipment = $162,000

Dividends = $28,500

Net Income for the year = $67,000

Depreciation:

2016 accumulated depreciation = $627,000

2015 accumulated depreciation = 589,000

Depreciation charge for 2016 = $38,000

Net Increases/decreases in working capital:

2016 2015 Cash Effect

Accounts receivable 97,000 83,550 ($13,450)

Inventory 182,000 160,300 ($21,700)

Accounts payable 91,640 165,670 ($74,030)

Salaries payable 26,800 33,000 ($6,200)

Notes payable (current) 40,300 92,000 ($51,700)

The Murdock Corporation's Statement of Cash Flows is one of the financial statements that are prepared at the end of the accounting period to show the inflow and outflow of cash during the period. It shows the cash flows from operating, investing, and financing activities of the corporation. There are two methods for preparing this statement: the direct method and the indirect method. The direct method shows the actual inflows and outflows for operating activities while the indirect method starts with the net income to reconcile the accrual basis of accounting to the cash basis.

The fixed cost of a production system is $20,000, and the variable cost per unit product is $17. The product has a revenue of $28 per unit. Calculate the breakeven quantity and determine the profit or loss amount when 1,500 units are produced. g

Answers

Answer:

Results are below.

Explanation:

Giving the following information:

Fixed costs= $20,000

Unitary variable cost= $17

Selling price= $28 per unit.

To calculate the break-even point in units, we need to use the following formula:

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 20,000 / (28 - 17)

Break-even point in units= 1,818 units

Now, the profit for 1,500 units:

Loss= 1,500*11 - 20,000= -$3,500

The HIJ bond has a current price of $800, a maturity value of $1,000, and matures in 5 years. If interest is paid semi-annually and the bond is priced to yield 8%, what is the bond's annual coupon rate

Answers

Answer:

Explanation:

The coupon rate is defined as the interest rate paid on a bond by its issuer for the term of the security.

Hence,

Par Value = $800

Face Value = $1,000

N = 5 x 2 = 10

Since the interest is semi annual

i = 8% / 2 = 4%

CF = $15.34

Coupon = $30.68 per year or 3.068%

Beverages manufactures its own . The bottles are made from polyethylene terephthalate (PET), a lightweight yet strong plastic. uses as much PET recycled resin pellets in its bottles as it can, both because using recycled PET helps to meet its sustainability goals and because recycled PET is less expensive than virgin PET.

Riley is continuing to search for ways to reduce its costs and its impact on the environment. PET plastic is melted and blown over soda bottle molds to produce the bottles. One idea Riley's engineers have suggested is to retrofit the soda bottle molds and change the plastic formulation slightly so that 25 % less PET plastic is used for each bottle. The average kilograms of PET per soda bottle before any redesign is 0.004 kg. The cost of retrofitting the soda bottle molds will result in a one-time charge of $22,112, while the plastic reformulation will cause the average cost per kilogram of PET plastic to change from $3.00 to $3.30.

Required:
a. Using the original data (before any redesign of soda bottles ), prepare a direct materials budget to calculate the cost of PET purchases in each quarter for the upcoming year and for the year in total.
b. Assume that the company retrofits the soda bottle molds and changes the plastic formulation slightly so that less PET plastic is used in each bottle. Now prepare a direct materials budget to calculate the cost of PET purchases in each quarter for the upcoming year and for the year in total for this possible scenario.
c. Compare the cost of PET plastic for Requirement 1 (original data) and for Requirement 2 (making change to using less PET.) What is the direct material cost savings from making the change to using less PET?

Answers

Answer:

I prepared an excel spreadsheet because there is not enough space here.

C) total savings = previous materials costs - total cost per year after retrofitting - cost of retrofitting the molding machine = $137,105.10 - $102,168.00 - $22,112 = $12,825.10

Sullivan's Island Company began operating a subsidiary in a foreign country on January 1, 2017, by investing capital in the amount of 84,000 pounds. The subsidiary immediately borrowed 200,000 pounds on a five-year note with 10 percent interest payable annually beginning on January 1, 2018. The subsidiary then purchased for 284,000 pounds a building that had a 10-year expected life and no salvage value and is to be depreciated using the straight-line method. Also on January 1, 2017, the subsidiary rented the building for three years to a group of local attorneys for 7,200 pounds per month. By year-end, rent payments totaling 72,000 pounds had been received, and 14,400 pounds was in accounts receivable. On October 1, 3,600 pounds was paid for a repair made to the building. The subsidiary transferred a cash dividend of 5,100 pounds back to Sullivan's Island Company on December 31, 2017. The functional currency for the subsidiary is the pound.
Currency exchange rates for 1 pound follow: January 1, 2017 $ 2.10 = 1 Pound
October 1, 2017 2.15 = 1
December 31, 2017 2.18 = 1
Average for 2017 2.14 = 1
Prepare an income statement, statement of retained earnings, and balance sheet for this subsidiary in pounds and then translate these amounts into U.S. dollars.

Answers

Answer:

Sullivan's Island Company

a. Sullivan's Island Company Income Statement for the year ended December 31, 2017:

Pounds US $

Rent Revenue 86,400 184,896

Repairs to building 3,600 7,704

Depreciation - Building 28,400 60,776

Interest on Notes 20,000 42,800

Net Income 34,400 73,616

b. Sullivan's Island Company Statement of Retained Earnings for the year ended December 31, 2017:

Pounds US $

Net Income 34,400 73,616

Dividends 5,100 10,914

Retained Earnings 29,300 62,702

c. Sullivan's Island Company Balance Sheet as of December 31, 2017:

Pounds US $

Assets:

Cash 63,300 138,102

Rent Receivable 14,400 31,392

Building 284,000 596,400

Less Depreciation -28,400 -60,776

Total Assets 333,300 705,118

Liabilities:

Notes Interest Payable 20,000 42,800

Notes Payable 200,000 420,000

Common Stock 84,000 176,400

Retained Earnings 29,300 62,702

Foreign Exchange Translation Gain 3,216

Total Liabilities + Equity 333,300 705,118

Explanation:

a) Data and Calculations:

Currency exchange rates for 1 pound follow:

January 1, 2017 $ 2.10 = 1 Pound

October 1, 2017 2.15 = 1

December 31, 2017 2.18 = 1

Average for 2017 2.14 = 1

Cash Account:

Pounds US $

Jan. 1 Common Stock 84,000 176,400

Jan. 1 Notes Payable 200,000 420,000

Jan. 1 Building -284,000 -596,400

Oct. 1 Building Repairs -3600 -7,740

Dec. 31 Rent received 72,000 156,960

Dec. 31 Dividends -5,100 -11,118

Dec. 31 Balance 63,300 138,102

b) Sullivan recorded some unrealized foreign exchange translation gain of $3,216. This is due to translation differences.

Division A had ROI of 15% last year. The manager of Division A is considering an additional investment for the coming year. What step will the manager likely choose to take

Answers

Answer: c.Reject the investment if it returns less than 15% ROI.

Explanation:

Additional investments should yield incremental returns if they are to be accepted. In the previous year, Division A had an Return on Investment of 15%, when an additional investment is being considered, it must bring in more than that 15% if it is to be accepted.

Therefore, if an investment is to give a less than 15% ROI, it should be rejected as it is not bringing additional returns for the Division.

Rogers, a national manufacturer of lawn-mowing and snow-blowing equipment, segments its business according to customer type: Professional and Residential. Assume the following divisional information was available for the past year (in thousands of dollars):

Sales Operating Income Total Assets
Residential $850,000 $68,000 $200,000
Professional $1,095,000 $153,300 $365,000

Assume that management has a 25% target rate of return for each division.

Requirements
a. Calculate each division’s ROI.
b. Calculate each division’s sales margin. Interpret your results.
c. Calculate each division’s capital turnover. Interpret your results.
d. Use the expanded ROI formula to confirm your results from Requirement a. What can you conclude?
e. Calculate each division’s residual income (RI). Interpret your results.

Answers

Answer:

A.Residential 34%

Professional 42%

B.Residential 8%

Professional 14%

C.Residential 4.25%

Professional 3%

D.Residential 34%

Professional 42%

E.Residential $18,000.00

Professional $62,050.00

Explanation:

A.Calculation for each division’s ROI

Using this formula

Return on Investment

=Net Income / Average Invested Assets

Let plug in the formula

Residential $68,000.00/$200,000.00 = 34.00%

Professional $153,300.00/$365,000.00 = 42.00%

B.Calculation for each division’s sales margin. Interpret your results

Using this formula

Sales Margin= Operating income/Sales

Let plug in the formula

Residential $68,000.00/$850,000.00 = 8.00%

Professional $153,300.00/$1,095,000.00 = 14.00%

C.Calculation for each division’s capital turnover

Using this formula

Capital Turnover=Sales/Average operating assets

Let plug in the formula

Residential $850,000.00 /$200,000.00 = 4.25

Professional $1,095,000.00/$365,000.00 = 3.00

D.Using the expanded ROI formula to confirm the results from Requirement a.

Using this formula

Return on Investment=Profit Margin * Investment Turnover

Let plug in the formula

Residential 8.00% * 4.25% 34.0%

Professional 14.00% * 3.00% 42.0%

E.Calculation for each division’s residual income (RI)

Residential Professional

Average investment

$200,000.00 $365,000.00

×Target return 25% 25%

=Target income

$50,000.00 $91,250.00

Hence,

Operating income $68,000.00 $153,300.00

Less:Target income$50,000.00 $91,250.00

Residual income $18,000.00 $62,050.00

Best Deals, Inc. has 10 units in ending merchandise inventory on December 31. The units were purchased in November for $160 each. The price lists from suppliers indicate the current replacement cost of the item to be $162 each. What would be the amount reported as Merchandise Inventory on the balance sheet?

A. $1,600

B. $3,220

C. $322

D. $1,620

Answers

Answer:

$1,600

Explanation:

Best deals incorporation has a total of 10 units in the ending merchandise inventory on December 31

The units were bought in the month of November at a price of $160 for each unit

The replacement cost of the item is $162

Inventory is always recorded when the cost is low

Therefore, the amount that is to be reported as the merchandise inventory can be calculated as follows

=10 units × $160

= $1,600

Hence the amount reported as the merchandise inventory on the balance sheet is $1,600

A mail-order house uses 18,000 boxes a year. Carrying costs are 60 cents per box a year, and ordering costs are $96. The following price schedule applies.
Determine:
A. The optimal order quantity.
B. The number of orders per year.
of boxes: 1,000-1,999 Price per box: $1.25
of boxes: 2,000- 4,999 Price per box: $1.20
of boxes: 5,000- 9,999 Price per box : $1.15
of boxes: 10,000 or more Price per box : $1.10

Answers

Answer:

Explanation:

Given that:

A mail-order house uses 18,000 boxes a year.

Carrying costs are 60 cents per box a year =$0.60

and ordering costs are $96.

Determine:

A. The optimal order quantity.

The optimal order quantity can be calculated by using the formula:

[tex]Q_o = \sqrt{\dfrac{2DS}{H}}[/tex]

[tex]Q_o = \sqrt{\dfrac{2*18000*96}{0.60}}[/tex]

[tex]Q_o = \sqrt{\dfrac{3456000}{0.60}}[/tex]

[tex]Q_o = \sqrt{5760000}[/tex]

[tex]Q_o = 2400 \ boxes[/tex]

B. The number of orders per year.

of boxes: 1,000-1,999 Price per box: $1.25

of boxes: 2,000- 4,999 Price per box: $1.20

of boxes: 5,000- 9,999 Price per box : $1.15

of boxes: 10,000 or more Price per box : $1.10

SInce 2400 boxes lies within ''of boxes: 2,000- 4,999 Price per box: $1.20 ''

Total cost = Carrying cost + ordering cost + Purchasing cost

[tex]Total \ cost =(\dfrac{Q}{2} )H +(\dfrac{D}{Q}) S+PD[/tex]

[tex]Total \ cost =(\dfrac{2400}{2} )0.60 +(\dfrac{18000}{2400}) 96+1.20*18000[/tex]

Total cost = ( 1200) 0.60 + 7.5(96) + 1.20(18000)

Total cost = 720 + 720 + 21600

Total cost = $ 23040

If the order size is 5000, the price per box will be 1.15

[tex]Total \ cost =(\dfrac{Q}{2} )H +(\dfrac{D}{Q}) S+PD[/tex]

[tex]Total \ cost =(\dfrac{5000}{2} )0.60 +(\dfrac{18000}{5000}) 96+1.15*18000[/tex]

Total cost = 2500 (0.60) + 3.6 (96) + 20700

Total cost = 1500 + 345.6 + 20700

Total cost = $22545.6

If the order size is 10000 , the price per box will be 1.10

[tex]Total \ cost =(\dfrac{Q}{2} )H +(\dfrac{D}{Q}) S+PD[/tex]

[tex]Total \ cost =(\dfrac{10000}{2} )0.60 +(\dfrac{18000}{10000}) 96+1.10*18000[/tex]

Total cost = 5000 (0.60) + 1.8(96) + 19800

Total cost = 3000 + 172.8 + 19800

Total cost = $22972.8

From the three total cost, the least minimum cost of ordering is: 5000

So; the number of orders per year = total number of boxes per year/ boxes per order

the number of orders per year = 18000/5000

the number of orders per year = 3.6 orders per year

According to the kinked demand curve theory, if Kit-N-Sit cuts prices, Kittysitters will ________; if Kit-N-Sit raises prices, Kittysitters will ________.

Answers

Answer:

respond aggressively by cutting prices ; will do nothing and leave prices unchanged.

Explanation:

The kinked demand curve was developed by an economist, Sweezy to addressing price inflexibility associated with an oligopolist market. In an oligopolist market, prices tends to remain unchanged over a long period of time even when costs are declining. The kinked demand curve hypothesis states that a firm faces a demand curve with a kink at the prevailing price level. This means that the curve is more elastic above the kink and less elastic below it. Here, there is less response to a price increase compared to much response to a price decrease.

According to the assumption under kinked demand curve, each firm in an oligopoly believes that if a firm cut price below the prevailing level, then competitors will follow suit. This is because competitors feels that if they do not cut their prices too, then their customers will leave them and buy from the competitor that is selling at lower price.

It is also assumed that, if a firm increases the price of his goods and services above the prevailing level, then competitors will not follow suit. This means that if a firm increases the price of his goods and services, there will be reduction in sales hence competitors will not increase their price. This because customers will patronize firms with the same or similar products hence increase competitors sales.

When constructing a risky portfolio consisting only of risky assets, an investment manager should offer _____.

Answers

Answer:

a customized risky portfolio to each client based on their risk aversion

Explanation:

It is always believed that when it comes to investment analysis or issue, there are higher returns for higher risk portfolios and lower returns for lower risk portfolios.

Therefore, in order to make a better decision, it is pertinent to note that, the level of risk aversion varies according to each or individual investor.

Hence, when constructing a risky portfolio consisting only of risky assets, an investment manager should offer a customized risky portfolio to each client based on their risk aversion.

Ten years ago, Kronan Corporation earned $0.50 per share. Its earnings this year were $2.20. What was the growth rate in earnings per share (EPS) over the 10-year period?

Answers

Answer:

The growth rate in earnings per share (EPS) is 15.97%

Explanation:

Assuming annual growth rate is r%, hence

$0.5 x (1 + r)^10 = $2.20

(1 + r)10 = $2.20 / $0.5

(1 + r)10 = $4.4

Taking 10th root at each side,

(1 + r)10 = $4.4

[tex]\sqrt[10]{1 + r}[/tex] = [tex]\sqrt[10]{4.4}[/tex]

1+r = 1.1597

r = 1.1597 - 1

r = 0.1597

r= 15.97%

The total factory overhead for Bardot Marine Company is budgeted for the year at $1,038,750, divided into two departments: Fabrication, $645,000, and Assembly, $393,750. Bardot Marine manufactures two types of boats: speedboats and bass boats. The speedboats require four direct labor hours in Fabrication and three direct labor hours in Assembly. The bass boats require two direct labor hours in Fabrication and four direct labor hours in Assembly. Each product is budgeted for 5,000 units of production for the year.
When required, round all per unit answers to the nearest cent.
a. Determine the total number of budgeted direct labor hours for the year in each department.
Fabrication direct labor hours
Assembly direct labor hours
b. Determine the departmental factory overhead rates for both departments.
Fabrication $ per dlh
Assembly $ per dlh
c. Determine the factory overhead allocated per unit for each product using the department factory overhead allocation rates.
Speedboat: $ per unit
Bass boat: $ per unit

Answers

Answer:

Instructions are below.

Explanation:

Giving the following information:

Fabrication, $645,000

Assembly, $393,750.

Speedboats:

Fabrication Direct labor hours= 4

Assembly Direct labor hours= 3

Bassboats:

Fabrication Direct labor hours= 2

Assembly Direct labor hours= 4

Each product is budgeted for 5,000 units of production for the year.

First, we need to calculate the budgeted direct labor hours:

Fabrication= 4*5,000 + 2*5,000= 30,000

Assembly= 3*5,000 + 4*5,000= 35,000

Now, we can determine the predetermined overhead rate using the following formula:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Fabrication= 645,000/30,000= $21.5 per direct labor hour

Assembly= 393,750/35,000= $11.25 per direct labor hour

Finally, we can allocate overhead to each product:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Speedboat= 4*21.5 + 3*11.25= $119.75

Bassboat= 2*21.5 + 4*11.25= $88

In September 2009 a U.S. investor chooses to invest $500,000 in German equity securities at a then current spot rate of $1.30/euro. At the end of one year the spot rate is $1.35/euro.
1. Refer to Instruction, how many euros will the U.S. investor acquire with his initial $500,000 investment?
A) €650,000B) €370,370C) €500,000D) €384,6152. Refer to Instruction, at an average price of €60/share, how many shares of stock will the investor be able to purchase?A) 8333 sharesB) 6410 sharesC) 6173 sharesD) 10,833 shares3. Refer to Instruction, at the end of the year the investor sells his stock that now has an average price per share of €57. What is the investor's average rate of return before converting the stock back into dollars?A) 5.0%B) -3.0%C) -5.0%D) 3.0%
4. Refer to Instruction, at the end of the year the investor sells his stock that now has an average price per share of €57. What is the investor's average rate of return after converting the stock back into dollars?A) -1.35%B) 5.0%C) -5.0%D) -7.24%

Answers

Answer:

1. Refer to Instruction, how many euros will the U.S. investor acquire with his initial $500,000 investment?

D) €384,615

$500,000 / $1.30 = €384,615.38

2. Refer to Instruction, at an average price of €60/share, how many shares of stock will the investor be able to purchase?

B) 6410 shares

€384,615 / €60 = 6,410.25

3. Refer to Instruction, at the end of the year the investor sells his stock that now has an average price per share of €57. What is the investor's average rate of return before converting the stock back into dollars?

C) -5.0%

(€57 - €60) / €60 = -5%

4. Refer to Instruction, at the end of the year the investor sells his stock that now has an average price per share of €57. What is the investor's average rate of return after converting the stock back into dollars?

A) -1.35%

[(6,410 x €57) + €15] x $1.35 = $493,269.75

($493,269.75 - $500,000) / $500,000 = -1.35%

In the basic EOQ model, an annual demand of 40 units, an ordering cost of $5, and a holding cost of $1 per unit per year will result in an EOQ of:

Answers

Answer:

Explanation:

The formula for Economic order quantity ( EOQ ) = √2DS/H,

Where,

D annual demand = 40 units

S Ordering cost = $5

H Holding cost = $1

Hence ,

EOQ = √ 2 × 40 units × $5 / 1$

= √ $400 / $1

= 20

You own a stock that had returns of 12.05 percent, −16.76 percent, 21.64 percent, 25.41 percent, and 9.29 percent over the past five years. What was the arithmetic average return for this stock?

Answers

Answer:Arithmetic average return =10.326%

Explanation:

Year Returns

1 12.05%

2 - 16.76%

3 21.64%

4 25.41%

5 9.29%

Total returns = 51.63%

Arithmetic average is The sum of all of the numbers in a considered list divided by the number of items of the list.

Therefore,

Arithmetic average return = Sum of year 1 to year 5 returns / number of items(year)

= 51.63% / 5

= 10.326%

People decide to save 20 percent of their incomes. The value of the marginal propensity to consume is ________ and the value of the spending multiplier is ________.

Answers

Answer: 0.8; 5

Explanation:

From the question, we are informed that people decide to save 20 percent of their incomes. We should note that the addition of the marginal prospensity to consume(MPC) and the marginal prospensity to save(MPS) will be equal to 1.

Therefore, the value of the marginal propensity to consume will be:

= 1 - 20%

= 1 - 0.2

= 0.8

The value of the spending multiplier will be calculated as:

= 1/MPS

= 1/0.2

= 5

Janitor Supply produces an industrial cleaning powder that requires 31 grams of material at $0.30 per gram and 0.40 direct labor hours at $10.00 per hour. Overhead is applied at the rate of $16 per direct labor hour. What is the total standard cost for one unit of product that would appear on a standard cost card

Answers

Answer:

Total standard cost per unit will be $19.7

Explanation:

The standard cost card of the product will be,

Material (0.3 * 31) 9.3

Direct Labor (0.4 * 10) 4

Overheads (0.4 * 16) 6.4

Total cost per unit 19.7

Thus, the standard cost per unit will be $19.7

Your firm has estimated the following cash flows for two mutually exclusive capital investment projects. The firm's required rate of return is 13%.
Year Project A Cash Flow Project B Cash Flow
0 -$100,000 -$100,000
1 28,900 48,000
2 28,900 40,000
3 28,900 40,000
4 28,900 5 28,900
Which of the following statements best describes projects A and B?
a) Project A should be accepted because it has the highest NPV.
b) Project A should be accepted because it has the highest EAA.
c) Project B should be accepted because it has the highest EAA.
d) Both projects should be accepted because they have positive NPVs and EAAs.
e) Neither project is acceptable.

Answers

Answer:

c) Project B should be accepted because it has the highest EAA.

Explanation:

EAA is the annuity payment that is equal to the value of the NPV

Net present value is the present value of after tax cash flows from an investment less the amount invested.

NPV can be calculated using a financial calculator

NPV for project A

Cash flow in year 0 = -$100,000

Cash flow each year from year 1 to 5 = $28,900

I = 13%

NPV = $1647.98

Please find attached the formula used i calculating EAA = $468.54

NPV for project B

Cash flow in year 0 = -$100,000

Cash flow in year 1 = $48,000

Cash flow in year 2 = $40,000

Cash flow in year 3 = $40,000

I = 13%

NPV = $1,525.75

EAA = $646.19

When comparing projects with unequal lives, choose the project with the higher EAA. This is project B. Only project B can be chosen because the projects are mutually exclusive.

To find the NPV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

Answer:

c) Project B should be accepted because it has the highest EAA.

Explanation:

First determine the Net Present Value of Project A and Project B.

Using a Financial Calculator the Net Present Values will be

Project A

-$100,000 CFj

$28,900 CFj

13% I/YR

Shift NPV - $14,037.78

Project B

-$100,000 CFj

$48,000 CFj

$40,000 CFj

$28,900 CFj

13% I/YR

Shift NPV $19250.66

The only correct statement is that Project B should be accepted because it has the highest EAA.

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.

Answers

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

= 1693.25

According to research, effective leaders at all levels of organizations have high levels of Emotional Intelligence (EI). CEOs with high EI excel in all of the following exceptA) managing relationships.B) influencing people.C) forging alliances inside and outside the firm.D) ability to discourage outside stakeholders.

Answers

Answer:

D) ability to discourage outside stakeholders.

Explanation:

Emotional Intelligence (EI) is important for effective leaders at all levels or organizations including CEO, as it helps in several organizational functions such as managing employee relations, satisfying employees, influencing people and forging alliances inside and outside the firm.

But a CEO with high level of EI will never discourage outside stakeholders, rather they will encourage their employees to perform better.

Hence, the correct answer is "D".

Which of the following is true regarding the value of an option? A) Unlike the Black-Scholes formula, the Put-Call Parity suggests that the volatility of underlying asset is not a factor that affects the value of an option. B) The option premium is greater or equal to its intrinsic value because of the time premium. C) The call and put premiums are unrelated since they depend on different set of variables. D) The writer of the call option pays the same premium as the buyer of the put option. E) When the call option is out-of-the-money and the put option is in-the-money, the call must be more valuable than the put.

Answers

Answer: B) The option premium is greater or equal to its intrinsic value because of the time premium.

Explanation:

The option premium can be calculated by adding the time premium and the intrinsic value. The time premium is the part of the option premium that accounts for the time remaining till the premium matures while the intrinsic value is the difference between the value of underlying asset and the strike price.

As the time premium can be zero but never negative, the option premium can either be greater than its intrinsic value or equal to it. It cannot be lower than it because of the time premium.

Abey Kuruvilla, of Parkside Plumbing, uses 1,210 of a certain spare part that costs $26 for each order, with an annual holding cost of $24. a) Calculate the total cost for order sizes of 25, 40, 50, 60, and 100 (round your responses to two decimal places).

Answers

Answer:

Annual demand(D) = 1,210

Ordering cost(S) = $26

Annual holding cost (H) = $24

With the order quantity(Q) = 25,