Suppose that the federal government places a binding price floor on chocolate. To help support the price floor, the government purchases all of the leftover chocolate that consumers do not buy. If the price floor remains in place for a number of years, what do you expect to happen to each of the following?a) Quantity of chocolate demanded by consumers.b) Quantity of chocolate supplied by producers.c) Quantity of chocolate purchased by the government.

Answers

Answer 1

Answer And Explanation:

a) Quantity of chocolate demanded by consumers will decrease

This is because there is a minimum price which makes product more expensive. The higher the price, the less the quantity demanded

b) Quantity of chocolate supplied by producers will increase

This is because price has increased with the government's price floor. The higher the price, the higher the quantity supplied.

c) Quantity of chocolate purchased by the government will increase

This is because there is surplus supply and therefore government would need to buy more to support the price floor and buy leftover chocolates in the market


Related Questions

Which of the following is not true about amortization of Limited-Life Intangibles a. Amortize by systematic charge to expense over useful life. b. Credit asset account or accumulated amortization. c. Useful life should reflect the periods over which the asset will contribute to cash flows. d. Amortization should be cost less residual value. e. IFRS requires companies to assess the residual values and useful lives of intangible assets at least annually. f. None of the above

Answers

Answer:

Amortization of Limited-Life Intangibles:

f. None of the above

Explanation:

IFRS requires limited-life intangibles to be systemically amortized throughout their useful lives using either units of activity method or straight-line method.  Intangibles are amortized to reduce their values as per use over their lifespan.  Amortization is like depreciation, but depreciation is a term used for tangible assets, while amortization is used for intangible assets.

A group of elderly men, whose government disability benefits are the sole source of income, is approached to consider an experimental research study for their current colon cancer. The study involves more than minimal risk, but offers substantial financial incentives that are equal to two months of disability benefits. The IRB will be most concerned about the possibility of:

Answers

Answer:

Undue influence on the subjects

Explanation:

An institutional Review Board (IRB) can be said to be a type of committee that uses research ethics by reviewing the   procedures (methods) to be used (proposed) for research a studies  to ensure that they are ethical.

According to federal regulations of expedited review of a new, proposed study can only  be used by the IRB if only the study involves no more than minimal risk and meets one of the allowable categories of expedited review specified in federal regulations. Usually, being involved in the research  studies is voluntary, but if you choose to take part, you waive the right to legal redress for any research-related injuries. IRB will be most concerned about the possibility of Undue influence on the subjects is critical to the research studies.

Suppose Happy Dog Soap Company is evaluating a proposed capital budgeting project (project Beta) that will require an initial investment of $3,225,000. The project is expected to generate the following net cash flows:


Year Cash Flow
Year 1 $275,000
Year 2 $475,000
Year 3 $400,000
Year 4 $500,000

Happy Dog Soap Company's weighted average cost of capital is 8%, and project Beta has the same risk as the firm's average project. Based on the cash flows, what is project Beta's NPV?

a. -$5,056,663
b. -$1,831,663
c -$2,106,412
d. -$2,197,996

Answers

Answer:

-$1,878,086.608

Explanation:

The computation of the net present value is shown below;

             (in dollars)                                         (in dollars)

Year Cash flows Discount factor Present value  

0             -3225000              1                             -3225000  (A)

1              275000           0.9259259259           254629.630

2             475000           0.8573388203           407235.940

3             400000           0.793832241               317532.896

4             500000           0.7350298528          367514.926

Total                                                                   1346913.392  (B)

Net present value                                           -$1,878,086.608 (A - B)

This is the answer but the same is not provided in the given options

light sweet petroleum, inc., is trying to evaluate a generation project with cash flows:________.
year Cash Flow
0 -38,600,000
1 62,600,000
2 - 11,600,000
a-1 What is the NPV for the project if the company requires a return of 11 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
NPV _______
a-2 Should the company accept this project?
A. Yes
B. Nο
b. This project has two IRR's, namely _______ percent and ______ percent, in order from smallest to largest. (Note: If you can only compute one IRR value, you should input that amount into both answer boxes in order to obtain some credit.) (A negative answer should be indicated by a minus sign.

Answers

Answer:

a-1. NPV for the project is $8,381,576.17

a-2. A. Yes. Accept the Project.

b.  40.84 % and  40.84 %

Explanation:

The Net Present Value can be determined using a Financial Calculator as follows :

-38,600,000    CFj

62,600,000    CFj

- 11,600,000     CFj

11 %                   I/YR      

Shift NPV        $8,381,576.17        

A Company should accept projects that have a positive Net Present Value.Therefore, Accept this project.

Calculation of the Internal Rate of Return using a Financial Calculator :

-38,600,000    CFj

62,600,000    CFj

- 11,600,000     CFj

Shift IRR           40.84 %

Debra and Merina sell electronic equipment and supplies through their partnership. They wish to expand their computer lines and decide to admit Wayne to the partnership. Debra's capital is $200,000, Merina's capital is $160,000, and they share income in a ratio of 3:2, respectively.Required:Record Wayne's admission for each of the following independent situations:a. Wayne directly purchases half of Merina's investment in the partnership for $97,000.b. Wayne invests the amount needed to give him a one-third interest in the partnership's capital if no goodwill or bonus is recorded.

Answers

Answer:

a. Merina's captal is $160,000. Half would be $80,000.

Entry;

DR Merina, Capital ..................................................................$80,000

CR Wayne, Capital ....................................................................................$80,000

(To record purchase of half of Merina Capital)

b.

DR Cash......................................................................$180,000

CR Wayne, Capital.........................................................................$180,000

(To record Wayne investment)

Working

The current Capital amount is;

= 200,000 +160,000

= $360,000

If Wayne joins and adds to this such that he owns 1/3 then;

2/3x = 360,000

x = 360,000/2/3

x = $540,000

Wayne's share would be;

= 1/3 * 540,000

= $180,000

The journal entries that would take place will take effect as A- A debit in Merina's capital amount and Cash account as $17000 and a credit effect in Wayne's capital account. The amount of debit and credit will be $97000.

And for B- There will be Debit in Cash account effecting a credit in The Wayne's capital account. The amount effecting the debit and credit side will be $180,000.

The journal entries are added in the images attached to the answer. The entries would take place in the journal entries on the respective date of their occurrence.( Image attached below).

When Wayne is introduced as partner for one third share the calculation of the amount of his capital would be shown as considering the capital as x. The capital by existing partners is $360000. (Image below).

,[tex]\dfrac{2}{3}x\ = 360000[/tex]

[tex]x= \dfrac {360000}{\dfrac{2}{3}}[/tex]

Now the value of x will be calculated as

[tex]x= \dfrac{540000}{3}[/tex]

[tex]x=180000[/tex]

Therefore Wayne's capital will be calculated as $180,000, so he will be required to bring in additional $180,000 capital in the firm for getting one third share in the profits and losses of the company.

Hence, the correct statements for A will be that Wayne pays $97000 which will be divided in Merina's capital and cash accounts in the proportion of $80000 and $17000 respectively.

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Mogul Company ships merchandise to Ski Outfit in a consignment arrangement. The arrangement specifies that Ski Outfit will attempt to sell the merchandise, and in return, Mogul will pay to Ski Outfit a commission of 25% of the selling price on any merchandise sold. During the year, Mogul ships inventory with a cost of $81,000 to Ski Outfit and pays shipping costs of $8,700. By the end of the year, $61,000 of the merchandise has been sold to customers for a total of $86,000. Mogul allocates $6,500 of the shipping costs to inventory sold and the other $2,200 to inventory not sold. Mogul also paid advertising costs during the year of $10,500. What amount of inventory will Mogul report at year end

Answers

Answer:

$22,200

Explanation:

With regards to the above information Mogul company,

Cost of goods

= $81,000 + $8,700

= $89,700

= $61,000 + $6,500

= $67,500

Inventory = Cost of goods - Cost of goods sold

= $89,700 - $67,500

= $22,200

It therefore means that the amount of inventory Magu company will report at the year end is $22,200

Bramble Corp. receives $360,000 when it issues a $360,000, 8%, mortgage note payable to finance the construction of a building at December 31, 2020. The terms provide for annual installment payments of $60,000 on December 31. Prepare the journal entries to record the mortgage loan and the first two payments.

Answers

Answer:

The First Payment occurs on 31 December 2021 as :

Mortgage Payable $31,200 (debit)

Interest Expense $28,800 (debit)

Cash $60,000 (credit)

The Second Payment occurs on 31 December 2022 as :

Mortgage Payable $33,696 (debit)

Interest Expense $26,304 (debit)

Cash $60,000 (credit)

Explanation:

First prepare an amortization schedule using the following data concerning the mortgage note :

Hint : Determine the number of years, N of this bond.

PV = $360,000

PMT = - $60,000

P/Yr = 1

r = 8 %

FV = 0

N = ?

The length of the bond, N is 8.4969 or 9 years

The First Payment occurs on 31 December 2021 as :

Mortgage Payable $31,200 (debit)

Interest Expense $28,800 (debit)

Cash $60,000 (credit)

The Second Payment occurs on 31 December 2022 as :

Mortgage Payable $33,696 (debit)

Interest Expense $26,304 (debit)

Cash $60,000 (credit)

During 2021, Deluxe Leather Goods issued 797,000 coupons which entitles the customer to a $4.50 cash refund when the coupon is submitted at the time of any future purchase. Deluxe estimates that 75% of the coupons will be redeemed. 420,000 coupons had been processed during 2021. Deluxe recognizes coupon expense in the period coupons are issued. At December 31, 2021, Deluxe should report a liability for unredeemed coupons of:

Answers

Answer:

Deluxe should report a liability for un-redeemed coupons of 799,875

Explanation:

Estimated coupons to be redeemed     597,750

(797,000 * 75%)

Less: Coupons redeemed                     420,000

Coupons un-redeemed                          177,750

X Cost per Coupon                                   4.50    

Liability for un-redeemed Coupons  799,875  

Luther Corporation
Consolidated Income Statement
Year ended December 31​ (in $millions)
2006 2005
Total sales 610.1 578.8
Cost of sales ​ (500.2) ​(355.3)
Gross profit 109.9 223.5
​Selling, general, and
administrative expenses ​ (40.5) ​(38.7​)
Research and development ​(24.6) (21.8​)
Depreciation and amortization ​(3.6) (3.9​)
Operating income 41.2 159.1
Other income −− −−
Earnings before interest and taxes​ (EBIT) 41.2 159.1
Interest income​ (expense) ​(25.1) ​(15.3​)
Pretax income 16.1 143.8
Taxes ​(5.5) (50.33​)
Net income 10.6 93.47
Price per share $16 $15
Sharing outstanding​ (millions) 10.2 8.0
Stock options outstanding​ (millions) 0.3 0.2
​Stockholders' Equity 126.6 63.6
Total Liabilities and​ Stockholders' Equity 533.1 386.7
Refer to the income statement above. ​ Luther's operating margin for the year ending December​ 31, 2005 is closest​ to:_________.
A. 13.7413.74​%
B. 21.9921.99​%
C. 27.4927.49​%
D. 32.9932.99​%

Answers

Answer:

27.48%

Explanation:

Calculation for Luther's operating margin for the year ending December​ 31, 2005

Using this formula

Operating margin = Operating income / Sales

Let plug in the formula

Operating margin= 159.1/578.8

Operating margin=0.2748*100

Operating margin=27.48%

Therefore Luther's operating margin for the year ending December​ 31, 2005 is 27.48%

A newly formed firm must decide on a plant location. There are two alternatives under consideration: locate near the major raw materials or locate near the major customers. Locating near the raw materials will result in lower fixed and variable costs than locating near the market, but the owners believe there would be a loss in sales volume because customers tend to favor local suppliers. Revenue per unit will be $172 in either case.

Omaha Kansas City
Annual fixed costs ($ millions) $1.0 $1.1
Variable cost per unit $30 $45
Expected annual demand (units) 9800 11,625

Required:
Using the above information, determine what the profit would be for Kansas City.

Answers

Answer:

Profit for Kansas City = $376,375

Explanation:

a) Data and Calculations:

                                                           Omaha               Kansas City

Expected annual demand (units)        9,800                  11,625

Annual fixed costs                         $1,000,000          $1,100,000

Variable cost per unit $30 $45       $294,000             $523,125

Total cost                                       $1,294,000           $1,623,125

Revenue                                        $1,685,600          $1,999,500

Profit                                                 $391,600             $376,375

From the above differential analysis, it appears that locating in Omaha would be better and more profitable than locating in Kansas City for the company.  This is based on the fact that more profit ($15,225) will be generated with Omaha location than locating in Kansas City.

1) Compute cash flows from financing activities using the above company information.
Addtional Short-Term Borrowings $20,000
Purchase of short term investments $5000
Cash Dividends Paid 16000
Interest Paid 8000
2) Compute cash flows from investing activities using the above company information.
Sale of short term investments $6000
Cash Collections from Customers $16,000
Purchase of used equipment $5000
Depreciation Expense $2000

Answers

Answer:

$4,000$1,000

Explanation:

1. Financing Cashflows relate to cash spent or received for the capital used in the company. These include Equity, Long term borrowings and dividends. Interest payments go to the Operating Cashflow and investments go to the Investing cashflow.

Financing Cashflow is;

= Inflow - Outflow

= +20,000 - 16,000

= +$4,000

2. Investing Cashflows related to cash spent or received from fixed assets as well as the securities of other companies. Cash collections does not fall here but rather under Operating cashflows along with depreciation.

Investing Cashflow is;

= Inflow - Outflow

= +6,000 - 5,000

= $1,000

On January 1, 2017, Shay issues $390,000 of 8%, 20-year bonds at a price of 97.00. Six years later, on January 1, 2023, Shay retires 20% of these bonds by buying them on the open market at 104.50. All interest is accounted for and paid through December 31, 2022, the day before the purchase. The straight-line method is used to amortize any bond discount.Required:Prepare the journal entry to record the bond retirement at January 1, 2023.

Answers

Answer:

Journal entry to record the bond retirement at Jan 1, 2023

Bond payable Dr $78,000

Loss on redemption Dr $5,265

Discount on bonds payable Cr $1,755

Cash. Cr 81,510

Explanation:

Bonds issued at 97%

$390,000 × 97%

= $378,300

Discount difference between cash proceeds and face value

= $390,000 -$378,300

= $11,700

If bonds are discounted using straight line,

$11,700 ÷ 20 year

= $585

At 2022, there is 5 amortization

= $585 × 5

= $2,925

Discount value

= $11,700 - $2,925

= $8,775

Carrying value

= $390,000 - $8,775

= $381,225

Therefore, $390,000 bonds payable × 20% × 104.5%

= $81,510

Carrying book value of 20%

$381,225 × 20%

= $76,245

Loss on redemption

= $81,510 - $76,245

= $5,265

Therefore,

20% of the face value

= $390,000 × 20%

= $78,000

20% of the discount

= $8,775 × 20%

= $1,755

Loss on redemption = $5,265

Cash disbursement = $81,510

King Company issued bonds with a face amount of $1,600,000 in 2015. As of January 1, 2020, the balance in Discount on Bonds Payable is $4,800. At that time, King redeemed the bonds at 102.Required:Assuming that no interest is payable, make the entry to record the redemption.

Answers

Answer:

January 1, 2020

Bonds Payable                                          1600000 Dr

Loss on Redemption of bonds                 36800 Cr

     Discount on Bonds Payable                        4800 Cr

     Cash                                                              1632000 Cr

Explanation:

The redemption of bonds before the maturity usually requires a payment for redemption which is a certain percentage of its face value. It is usually higher than the face value. The above bonds are redeemed at 102 which means at 102% of the face value of the bonds. Thus, the cash paid to redeem the bonds is,

Cash = 1600000 * 102%  =  1632000

The bonds have a carrying value, which is the face value less discount or add premium, of,

Carrying value = 1600000 - 4800  =  $1595200

If they are redeemed for an amount in excess of the carrying value, they are redeemed at a loss.

The loss on redemption is,

Loss = 1595200 - 1632000 = $36800

1. The "four Ms" of cause-and-effect diagrams are:______.
a. mentality, motivation, management, and manpower.
b. material, methods, men, and mental attitude.
c. material, machinery/equipment, manpower, and methods.
d. material, management, manpower, and motivation.
e. named after four quality experts.
2. A Systematic Approach to Capacity Decisions includes:A. Evaluate the alternativesB. Identify gapsC. Estimate capacity requirementsD. Develop alternativesE. All are correct

Answers

Answer:

1. C.  c. material, machinery/equipment, manpower, and methods.

2. E. All are correct

Explanation:

1. The cause-and-effect diagram also known as the Ishikawa diagram is used by organizations to find out the likely causes of unwanted problems. This diagram traces the roots of problems and helps managers discover the potential causes of these problems. The four M's that form the bone of the diagram to which other causes are traced include the;

a. material, which is about the products used in the production process and potential problems that can be attributed to them.

b. machinery/equipment, which is about the plant and likely problems that can arise from their use.

c. manpower, which is about the personnel used in the production process, and,

d. methods, which is about the systems adopted by the organization.

2. A systematic approach to capacity decisions include;

a. Estimation of capacity requirements

b. Identification of gaps by comparing the expected requirements with available capacity.

c. Develop alternative plans and methods that would help to reduce the gaps.

d. Evaluate the alternatives taking into consideration their qualitative and quantitative attributes.

1. The "four Ms" of cause-and-effect diagrams are material, machinery/equipment, manpower, and methods. Thus, option C is correct.

2. A Systematic Approach to Capacity Decisions includes all of the options. Thus, option E is correct.

Due to the high demand for a given good or service on the market, firms often employ capacity management as a method to maximize production efficiency. Its objectives include locating and resolving manufacturing process bottlenecks and accelerating output through resource optimization and the removal of time and capacity restrictions.

It aids businesses in overcoming difficulties related to creating long-term organizational strategies, managing supply chain operations, and satisfying short- and medium-term client demand. In order to guarantee that it accomplishes the manufacturing output within the allotted time, an organization must analyze the availability of its resources while doing this. In sectors including manufacturing, retail, services, and information technology, this practice is widespread.

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Hampton Company reports the following information for its recent calendar year.
Income Statement Data Selected Year-End Balance Sheet Data
Sales $ 160,000 Accounts receivable increase 10,000
Expenses Inventory decrease 16,000
Cost of goods sold 100,000 Salaries payable increase 1,000
Salaries expense 24,000
Depreciation expense 12,000
Net income $ 24,000
Required:
Prepare the operating activities section of the statement of cash flows for Hampton Company using the indirect method.

Answers

Answer:

Cash Flow from Operating Activities

Net Income                                                          $24,000

Adjustments for Non-Cash items :

Depreciation expense                                         $12,000

Adjustments for Changes in Working Capital :

Increase in Accounts receivable                       ($10,000)

Decrease in Inventory                                         $16,000

Increase in Salaries payable                                 $1,000

Net Cash from Operating Activities                   $43,000

Explanation:

The Indirect method reconciles the Operating Profit to Operating Cash Flow by adjusting the Operating Cash flow with the following items :

Non-cash items previously deducted or added to Operating Profit.Changes in Working Capital.
The preparation of the  operating activities section of the statement of cash flows for Hampton Company using the indirect method is presented below:

Cash Flow from Operating Activities

Net Income                                                          $24,000  

Adjustments for Non-Cash items :  

Depreciation expense                                         $12,000  

Adjustments for Changes in Working Capital :  

Increase in Accounts receivable                       ($10,000)  

Decrease in Inventory                                         $16,000  

Increase in Salaries payable                                 $1,000  

Net Cash from Operating Activities                   $43,000

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When modeling the right to develop an oil property as a real option, and in the presence of fixed costs, using oil price volatility in the option-pricing model will

Answers

Answer:

overestimate because the value of the option depends on the volatility of revenue

Explanation:

The greater the market volatility, the greater the range that would be needed to determine the option premium. This would end up causing an overestimation of the premium value.

Therefore making use of oil price volatility in the option-pricing model will overestimate as value of option is dependent on how volatile the revenue is.

if american auto companies make a breakthrough in automobile technology and are able to produce a car that gets

Answers

Answer: The dollar will appreciate

Explanation:

Here is the complete question:

American auto companies make a breakthrough in automobile technology and are able to produce a car that gets 200 miles to the gallon, what will happen to the U.S. dollar exchange rate?

Appreciation of a currency simply means that the value of a particular currency has risen when compared to another currency. In this situation, the value of the dollar will rise against other currencies.

This.is because the increase in production in the United States will let to an increase in the exchange rate I the future which will lead to a rise in the dollars expected return.

air pollution causes capital to wear out more rapidly, doubling the rate of depreciation. How would this affect economic growth?

Answers

Answer:

The economic growth will be lower.

Explanation:

The rise in pollution and the doubling of the rate of depreciation will affect economic growth adversely. However, rapid wear and tear of capital will cost the person and it will reduce the purchasing power. Thus, lower purchasing power will result in lower economic growth. Moreover, pollution creates three main problems that are reduced labor productivity, rise in health problems, and loss of crop yield. So the reduction in all these factors will also slow down economic growth.

iv. What is the essential tool (and subtypes) for seeing the big picture and revealing large information about the data series

Answers

Answer:

Ms Excel

Explanation:

This software is popular among businesses today, which they use in performing data analysis. Often called a spreadsheet application, Ms (Microsoft) Excel allows businesses to see the bigger picture and revealing large information about the data series.

For example, by using Ms Excel, a business can look up the percentage differences in its revenue turnover for a period time (quarterly, monthly or yearly), by simply imputing their data series.

"In the long-run, monopolistically competitive firms: have excess capacity. produce at the minimum of average total cost. charge prices equal to marginal cost. both B and C are true."

Answers

Answer:

The correct answer is the option D: Both B and C are true.

Explanation:

To begin with, a monopolistically competitive firms is the one that produces in a market in where the other companies sell a pretty similar but different product and there are a lot of buyers so the most important way to difference themself is by the publicity or the identification of the brand in the mind of the consumers. Moreover, in this type of market in the long-run equilibrium the price if equal to the marginal cost and also to the minimun of the average total cost so therefore that it is said that there are zero economic profit

Direct Labor Variances Glacier Bicycle Company manufactures commuter bicycles from recycled materials. The following data for October are available: Quantity of direct labor used 5,000 hrs. Actual rate for direct labor $22.75 per hr. Bicycles completed in October 800 bicycles Standard direct labor per bicycle 6.0 hrs. Standard rate for direct labor $24.00 per hr. a. Determine for October the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Answers

Answer:

a) i. Direct labor rate variance = Quantity of direct labor used * (Actual rate for direct labor - Standard rate for direct labor)

= 5,000*(22.75-24)

= -6,250 (Favorable)

ii. Direct labor time variance =  Standard rate for direct labor * (Quantity of direct labor used - Bicycles completed in October * Standard direct labor per bicycle)

= 24 * (5000 - 800 * 6)

= 4,800 (Unfavorable)

iii. Total Direct labor cost variance =  (Quantity of direct labor used * Actual rate for direct labor) - (Bicycles completed in October * Standard direct labor per bicycle * Standard rate for direct labor)

= (5000 * 22.75) - (800 * 6 * 24)

= -1450 (Favorable)

Answer:

The total cost variance of labor will be "-1,450 (favorable)". The further explanation is given below.

Explanation:

According the question,

Direct labor rate variance will be:

⇒  [tex]5000\times (22.75-24)[/tex]

⇒  [tex]5000\times (-1.25)[/tex]

⇒  [tex]-6,250 \ (favorable)[/tex]

Direct labor time variance will be:

⇒  [tex]24\times (5000-800\times 6)[/tex]

⇒  [tex]24\times 200[/tex]

⇒  [tex]4,800 \ (unfavorable)[/tex]

Now,

The Total Direct labor cost variance will be:

⇒  [tex](5000\times 22.75)-(800\times 6\times 24)[/tex]

⇒  [tex](113,750)-(115,200)[/tex]

⇒  [tex]-1,450 \ (favorable)[/tex]

Sales, Production, Direct Materials Purchases, and Direct Labor Cost Budgets The budget director of Gourmet Grill Company requests estimates of sales, production, and other operating data from the various administrative units every month. Selected information concerning sales and production for July is summarized as follows:
A. Estimated sales for July by sales territory:
Maine:
Backyard Chef 310 units at $700 per unit
Master Chef 150 units at $1,200 per unit
Vermont:
Backyard Chef 240 units at $750 per unit
Master Chef 110 units at $1,300 per unit
New Hampshire:
Backyard Chef 360 units at $750 per unit
Master Chef 180 units at $1,400 per unit
B. Estimated inventories at July 1:
Direct materials:
Grates 290 units
Stainless steel 1,500 lbs.
Burner subassemblies 170 units
Shelves 340 units
Finished products:
Backyard Chef 30 units
Master Chef 32 units
C. Desired inventories at July 31:
Direct materials:
Grates 340 units
Stainless steel 1,800 lbs.
Burner subassemblies 155 units
Shelves 315 units
Finished products:
Backyard Chef 40 units
Master Chef 22 units
D. Direct materials used in production:
In manufacture of Backyard Chef:
Grates 3 units per unit of product
Stainless steel 24 lbs. per unit of product
Burner subassemblies 2 units per unit of product
Shelves 4 units per unit of product
In manufacture of Master Chef:
Grates 6 units per unit of product
Stainless steel 42 lbs. per unit of product
Burner subassemblies 4 units per unit of product
Shelves 5 units per unit of product
E. Anticipated purchase price for direct materials:
Grates $15 per unit
Stainless steel $6 per lb.
Burner subassemblies $110 per unit
Shelves $10 per unit
F. Direct labor requirements:
Backyard Chef:
Stamping Department 0.50 hr. at $17 per hr.
Forming Department 0.60 hr. at $15 per hr.
Assembly Department 1.00 hr. at $14 per hr.
Master Chef:
Stamping Department 0.60 hr. at $17 per hr.
Forming Department 0.80 hr. at $15 per hr.
Assembly Department 1.50 hrs. at $14 per hr.
Required:
1. Prepare a sales budget for July. Gourmet Grill Company Sales Budget For the Month Ending July 31 Product and Area Unit Sales Volume Unit Selling Price Total Sales Backyard Chef: Maine 310 700 217,000 Vermont 240 750 180,000 New Hampshire 360 750 270,000 Total 910 667,000 Master Chef: Maine 150 1,200 180,000 Vermont 110 1,300 143,000 New Hampshire 180 1,400 252,000 Total 440 575,000 Total revenue from sales 1,242,000
2. Prepare a production budget for July. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Gourmet Grill Company Production Budget For the Month Ending July 31 Units Backyard Chef Master Chef Expected units to be sold 910 440 Desired inventory, July 31 40 22 Total units available 950 462 Estimated inventory, July 1 -30 -32 Total units to be produced 920 430
3. Prepare a direct materials purchases budget for July.
Gourmet Grill Company
Direct Labor Cost Budget
For the Month Ending July 31
Stamping Department
Forming Department
Assembly Department
Total Hours required for production:
Backyard Chef
Master Chef
Total Hourly rate
Total direct labor cost

Answers

Answer:

Gourmet Grill Company

1. Sales Budget For the Month Ending July 31

Product             Area Unit               Sales       Unit Selling                 Total

                                                      Volume         Price           Sales

Backyard Chef: Maine                     310              $700      $217,000

                         Vermont                240                750        180,000

                         New Hampshire   360                750        270,000

                         Total                            910                                     667,000

Master Chef:    Maine                    150              1,200         180,000

                         Vermont                110              1,300         143,000

                         New Hampshire   180              1,400       252,000

                         Total                           440                                    575,000

Total revenue from sales                                                         $1,242,000

2. Gourmet Grill Company Production Budget For the Month Ending July 31 Units

Units                                Backyard Chef           Master Chef       Total

Expected units to be sold        910                          440               1,350

Desired inventory, July 31         40                            22                   62

Total units available                950                          462                1,412

Estimated inventory, July 1      -30                           -32                   62

Total units to be produced    920                          430               1,350

3. Gourmet Grill Company

Direct Labor Cost Budget

For the Month Ending July 31

                                                  Stamping        Forming       Assembly

                                Units        Department   Department  Department

Backyard Chef        920            460 hrs           552 hrs         920 hrs            Master Chef            430            258 hrs           344 hrs          645 hrs

Total Hours required

 for production:                          718 hrs           896 hrs      1,565 hrs

Total Hourly rate                        $17                  $15                $14                    

Total direct labor cost           $12,206         $13,440          $21,910

Explanation:

1) Data:

A. Estimated sales for July by sales territory:

Maine:

Backyard Chef 310 units at $700 per unit

Master Chef 150 units at $1,200 per unit

Vermont:

Backyard Chef 240 units at $750 per unit

Master Chef 110 units at $1,300 per unit

New Hampshire:

Backyard Chef 360 units at $750 per unit

Master Chef 180 units at $1,400 per unit

B. Estimated inventories at July 1:

Direct materials:

Grates 290 units

Stainless steel 1,500 lbs.

Burner subassemblies 170 units

Shelves 340 units

Finished products:

Backyard Chef 30 units

Master Chef 32 units

C. Desired inventories at July 31:

Direct materials:

Grates 340 units

Stainless steel 1,800 lbs.

Burner subassemblies 155 units

Shelves 315 units

Finished products:

Backyard Chef 40 units

Master Chef 22 units

D. Direct materials used in production:

In manufacture of Backyard Chef:

Grates 3 units per unit of product

Stainless steel 24 lbs. per unit of product

Burner subassemblies 2 units per unit of product

Shelves 4 units per unit of product

In manufacture of Master Chef:

Grates 6 units per unit of product

Stainless steel 42 lbs. per unit of product

Burner subassemblies 4 units per unit of product

Shelves 5 units per unit of product

E. Anticipated purchase price for direct materials:

Grates $15 per unit

Stainless steel $6 per lb.

Burner subassemblies $110 per unit

Shelves $10 per unit

F. Direct labor requirements:

Backyard Chef:

Stamping Department 0.50 hr. at $17 per hr.

Forming Department 0.60 hr. at $15 per hr.

Assembly Department 1.00 hr. at $14 per hr.

Master Chef:

Stamping Department 0.60 hr. at $17 per hr.

Forming Department 0.80 hr. at $15 per hr.

Assembly Department 1.50 hrs. at $14 per hr.

b) Calculations:

                                                  Stamping        Forming       Assembly

                                Units        Department   Department  Department

Backyard Chef           1                  0.50 hr             0.60 hr       1.00 hr

Total hours required  920            460 hrs            552 hrs      920 hrs                               

Master Chef                1                0.60 hr             0.80 hr         1.50 hrs

Total hours required  430            258 hrs            344 hrs        645 hrs

Total Hours required

 for production:                             718 hrs            896 hrs     1,565 hrs

c) Gourmet Grill Company's Sales, Production, and Direct Labor Budgets for July detail the sales units under different product categories and areas.  They will guide the management of Gourmet Grill company to make relevant decisions with regard to inventories, production, and sales volume that must be achieved in order to realize the budgets and attin company's objectives.  They are very essential in planning, decision making, and control.  Based on these budgets, performances will be reviewed, analyzed, and accordingly rewarded.

What is the annual real estate tax on a property valued at $135,000 and assessed for tax purposes at $47,250, with an equalization factor of 125%, when the tax rate is 25 mills

Answers

Answer:

$1,477

Explanation:

The annual real estate tax = assessed tax × equalization factor × tax rate

= $47,250 × 125% × 25 mills

= $47,250 × 125% × 2.5%(25 mills)

= $47,250 × 1.25 × 0.025

= $1,477

Burpee Company sells seeds to garden stores. Sales are expected to be $2,038,635 in January, $2,581,891 in February and $2,913,307 in March. Burpee sets their prices so that they earn an average 32% gross profit on sales revenue. What is budgeted cost of goods sold for the first quarter (January, February and March)?

Answers

Answer:

Total COGS= $5,123,006.44

Explanation:

Giving the following information:

Sales:

January= $2,038,635

February= $2,581,891

March= $2,913,307

Burpee sets their prices so that they earn an average 32% gross profit on sales revenue.

We need to calculate the cost of goods sold:

January= 2,038,635*0.68= 1,386,271.8

February= 2,581,891*0.68= 1,755,685.88

March= 2,913,307*0.68= 1,981,048.76

Total COGS= $5,123,006.44

Deliberately selling a product below its customary price, not to increase sales, but to attract customers' attention in hopes that they will buy other products as well, is referred to as

Answers

Answer:

loss leader pricing strategy

Explanation:

The type of strategy that is being described is known as a loss leader pricing strategy. This is a pricing strategy in which a product is sold at a price below its market cost in order to be able to stimulate other sales of more profitable goods or services. In such a scenario, the "leader" product is any popular item that the company is selling, and this item is the one that receives the price cut in order to attract customers that were already interested in it to the other products.

Wayne, Inc., wishes to expand its facilities. The company currently has 5 million shares outstanding and no debt. The stock sells for $40 per share, but the book value per share is $10. Net income is currently $4 million. The new facility will cost $50 million, and it will increase net income by $820,000. Assume a constant price-earnings ratio.
a-1. Calculate the new book value per share. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
a-2. Calculate the new EPS. (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.)
a-3. Calculate the new stock price. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
a-4. Calculate the new market-to-book ratio. (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.)
b. What would the new net income for the company have to be for the stock price to remain unchanged? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole dollar amount, e.g., 1,234,567.)

Answers

Answer:

a-1. Calculate the new book value per share.

current book value = stocks outstanding x book value = 5,000,000 x $10 = $50,000,000

new book value = $50,000,000 + $50,000,000 = $100,000,000

new stocks issued = $50,000,000 / $40 = 1,250,000

total stocks outstanding = 5,000,000 + 1,250,000 = 6,250,000

new book value per stock = $100,000,000 / 6,250,000 = $16

a-2. Calculate the new EPS.

old EPS = $4,000,000 / 5,000,000 = $0.80 per stock

new EPS = $4,850,000 / 6,250,000 = $0.776 per stock

a-3. Calculate the new stock price.

price to earnings ratio = $40 / $0.80 = 50

new stock price:

50 = new stock price / $0.776

new stock price = 50 x $0.776 = $38.80

a-4. Calculate the new market-to-book ratio.

market to book ratio = market capitalization / book value = $242,500,000 / $100,000,000 = 2.425

b. What would the new net income for the company have to be for the stock price to remain unchanged?

0.8 = net income / 6,250,000

net income = 6,250,000 x 0.8 = $5,000,000

A producer can produce a product at a variable cost per unit of $7. The producer can sell the product for $10 each. If the fixed cost is $60,000.

Required:
a. How many units must the producer sell to break-even?
b. What is revenue at 35,000 units?
c. What is total cost at 35,000 units?
d. How many units must the producer sell in order to earn a profit of $60,000?

Answers

Answer:

a.

Break even in units = 20000 units

b.

Revenue at 35000 units = $350000

c.

Total cost (35000 units) = $305000

d.

Units required for target profit = 40000 units

Explanation:

a.

The break even in units is the number of units that must be sold in order to earn enough total revenue as to cover total costs. The break even in units can be calculated as follows,

Break even in units = Fixed cost / Contribution margin per unit

Where,

Contribution margin per unit = Selling price per unit - Variable cost per unit

Contribution margin per unit = 10 - 7 =$3

Break even in units = 60000 / 3

Break even in units = 20000 units

b.

Revenue = Price * Quantity

Revenue at 35000 units = 10 * 35000

Revenue at 35000 units = $350000

c.

Total cost = Variable cost + Fixed cost

Total cost (35000 units) = 7 * 35000 + 60000

Total cost (35000 units) = $305000

d.

To calculate the units required to earn a target profit, we simply add the target profit amount to the fixed costs in the break even in units equation.

Thus, the number of units required to earn a target profit of $60000 is,

Units required for target profit = (60000 + 60000) / 3

Units required for target profit = 40000 units

A monopolist that practices perfect price discrimination has the same deadweight loss triangle as the single-price monopolist.
a) true
b) false

Answers

Answer:

The correct answer is the option B: False.

Explanation:

To begin with, the price discrimination strategy refers to a technique used by the companies in order to charge different prices to the different consumers regarding the fact of how much would they be able to pay for the product. When it comes to monopolies, a perfect price discrimination strategy would try as best as possible to capture the majority of the zone known as the "consumer surplus". And that is why that a company with a perfect price discrimination would face a small deadweight loss area due to the fact that with that strategy of price the monopolist will absorve as much as possible of that area becuase the triangle is half consumer surplus and half producer surplus.

The Atlantic Division of Stark Productions Company reported the following results for 2019:
Sales $4,000,000
Variable costs 3,200,000
Controllable fixed costs 300,000
Average operating assets 2,500,000
Management is considering the following independent alternative courses of action in 2020 in order to maximize the return on investment for the division.
1. Reduce controllable fixed costs by 10% with no change in sales or variable costs.
2. Reduce average operating assets by 10% with no change in controllable margin.
3. Increase sales $500,000 with no change in the contribution margin percentage.
Compute the return on investment for 2019.

Answers

Answer:

The Atlantic Division of Stark Productions Company

Return on Investment = Net Income/Average operating assets x 100

1. Reduced controllable fixed costs by 10% with no change in sales or variable costs:

Net Income = $530,000 ($500,000 + 30,000)

Return on investment = $530,000/$2,500,000 x 100

= 21.2%

2. Reduced average operating assets by 10% with no change in controllable margin:

Net Income = $500,000 and average operating assets = $2,250,000

Return on Investment = $500,000/$2,250,000 x 100

= 22.22%

3. Increased sales to $4,500,000 with no change in the contribution margin percentage:

Sales                                  $4,500,000

Variable costs                     3,600,000

Contribution                        $900,000

Controllable fixed costs        300,000

Net operating income        $600,000

Average operating assets 2,500,000

Return on Investment = $600,000/$2,500,000 x 100

= 24%

Explanation:

a) Data and Calculations:

Sales                                  $4,000,000

Variable costs                     3,200,000

Contribution                        $800,000

Controllable fixed costs        300,000

Net operating income        $500,000

Average operating assets 2,500,000

Return on investment = Net Income/Average operating assets x 100 = $500,000/$2,500,000 x 100 = 20%

Contribution margin ratio = $800,000/$4,000,000 x 100 = 20%

The Atlantic Division's Return on Investment, as a performance measure, evaluates the efficiency of the investment in Atlantic Division.  This ratio is obtained by dividing the returns or benefits of the investment by the cost of the investment, and then multiplying by 100.

A 25-year old single client has just started his own small business and is not covered by a retirement plan. He has $5,000 to invest and currently has a low level of income. He wishes to start saving for retirement. The BEST recommendation is a:

Answers

Answer:

Roth IRA

Explanation:

Based on this scenario, it can be said that the best recommendation would be a Roth IRA. This is an individual retirement account that non-deductible tax-free growth for retirement at age 59 1/2. As of 2018, the yearly limit for a Roth IRA account is $5,500 meaning that the client in this scenario would not have any problem investing the entire $5000 as soon as they open the account. And since he is in a low tax bracket he should not have any problem opening an Account.

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