Suppose that XYZ Company hires labor and capital in competitive input markets. Assume that labor costs $200 per day and that a unit of capital costs $150 per day. At the current level of production, labor's marginal product is 40 units of output produced per day and capital's marginal product is 30 units of output per day.
a) Given the information provided, is the firm minimizing the cost of current production? Explain why or why not.
b) If the daily wages were to increase, explain the long run adjustments that the firm would likely make in response to the wage increase.
Answer:
a) Yes, the firm is minimizing the cost of current production. This is because MRPL / w = MRPC / r = 0.20.
b) The long run adjustments that the firm would likely make in response to the wage increase is to use more labor and less capital until MRPL / w = MRPC / r, which is the condition for the cost minimization of a firm.
Explanation:
a) Given the information provided, is the firm minimizing the cost of current production? Explain why or why not.
The condition for the cost minimization of a firm is as follows:
MRPL / w = MRPC / r ……………………………. (1)
Where:
MRPL = Labor's marginal product = 40
w = Cost of labour = $200
MRPC = Capital's marginal product = 30
r = Cost of capital = 150
Therefore, we have:
MRPL / w = 40 / 200 = 0.20
MRPC / r = 30 / 150 = 0.20
Since MRPL / w = MRPC / r = 0.20, this implies that these conditions are consistent with equation (1). Therefore, the firm is minimizing the cost of current production.
b) If the daily wages were to increase, explain the long run adjustments that the firm would likely make in response to the wage increase.
If the daily wages were to increase, the MRPL / w in equation (1) in part a above will fall and we will have:
MRPL / w < MRPC / r …………………… (2)
Since equation (2) is no longer consistent with equation (1), the firm is NOT minimizing the cost of current production.
Therefore, the long run adjustments that the firm would likely make in response to the wage increase is to use more labor and less capital until MRPL / w = MRPC / r, which is the condition for the cost minimization of a firm.
If a firm has a market beta of 0.9. is subject to an income tax rate of 35 percent, has a risk-free rate of 6 percent, a market risk premium of 7 percent, and has a market value of debt to market value of equity ratio of 60 percent, what does the market expect the firm to generate in terms of equity returns using CAPM?
a) 12.3%
b) 7%
c) 6%
d) 13%
Answer:
A
Explanation:
According to the capital asset price model: Expected rate of return = risk free + beta x (market rate of return - risk free rate of return)
risk free + (beta x market premium)
6 + (0.9 X 7) = 12.3%
Paris Summer 20 Company sells small laptops. Based on the information below, calculate the Break even point in sales dollars for the year.
Selling price per unit $150
Variable cost per unit $60
Fixed Costs per year $21,000
Answer:
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Explanation:
out line four roles played by entrepreneurs in Kenya
Answer:
To be a successful entrepreneur it is necessary for the individual to develop essential communication skills, creativity, innovation and the ability to deal with the risks inherent in the business.
A well-positioned and competitive business is one that manages to create value for consumers by offering products and services that satisfy their wants and needs.
In Kenya, entrepreneurship has stood out as a means for citizens to seek employment and income opportunities, especially in opening up trade in products and services.
Entrepreneurship helps a country to develop by moving the economy and improving the population's quality of life, so it is necessary to have government incentives and information available on the subject.
Chad is the founder of a firm producing self-driving vehicles. Because the industry is so new and chaotic, Chad favors a top-down strategic planning approach in which he exerts strong control over all aspects of the business, from product development and design to manufacturing and marketing. What is wrong with this scenario
Answer:
a. The self-driving vehicle industry is changing too much for the top- down approach to be effective.
Explanation:
The top-down strategic planning approach involves the company goals and their subdivisions. The aim is to gradually move from the top to down in a specific hierarchy. This approach lies on higher authority and in contrast the bottom-up strategy favors decision making that gives complete staff a voice.One large bakery still receives flour in 25-pound bags from their own company's warehouse. They use an average of 5500 bags a year. The production step that uses these bags use 35 bags per day while the usage is 16 bags per day. It costs $12.00 to configure the machines for each run. Annual carrying costs are $7.50 per bag. What will be their average number of bags on hand if they request the EPQ bags in each order
Answer:
48.87 bags
Explanation:
First, we need to calculate the EPQ as follow
EPQ = [tex]\sqrt{\frac{2 D S }{H(1-d/p)}}[/tex]
Where
D = Annual Demand = 5500
S = Setup cost = $12
H = Carrying cost = $7.5
d = Daily usage = 16
p = Daily production = 35
Placing value sinthe formula
EPQ = [tex]\sqrt{\frac{2 X 5500 X 12 }{7.5(1-16/35)}}[/tex]
EPQ = [tex]\sqrt{\frac{132000 }{4.07142857}}[/tex]
EPQ = [tex]\sqrt{32421.05}[/tex]
EPQ = 180.06
Now Calculate the average number of bags in hand as follow
Average Number of Bags = [tex]\frac{EPQ}{2} X ( 1 - d/p )\\[/tex]
Placing values in the formula
Average Number of Bags = [tex]\frac{180.06}{2} X ( 1 - 16/35 )\\[/tex]
Average Number of Bags = 48.87
The parts can be purchased from an outside supplier for only $28 each. The space in which the parts are now produced would be idle and fixed production costs would be reduced by one-fourth. If the parts are purchased from the outside supplier, the annual impact on the company's operating income will be:________
a) $24,000 increase
b) $24,000 decrease
c) $56,000 increase
d) $56,000 decrease
Answer:
d) $56,000 decrease
Explanation:
In the case when parts are produced by sharp corporation
Given that
Total cost per unit = $36
Total cost = Total cost per unit × parts
= $36 × 8,000
= $288,000
Now
If the parts are Purchased by the outside supplier, fixed costs decreased by one-fourth.
So, three-fourth fixed costs should be incurred.
Now
Total cost per unit = Purchase Price + three - fourth fixed costs
= $28 + (3 ÷4) × $20
= $28 + $15
= $43
Now
Total cost = $43 × 8,000
= $344,000
So, the operating income is
= $288,000 - $344,000
= $56,000 decrease
Repetitive sequences of activities that express and reinforce the key values of the
organization, identify important goals and people are referred to as
A) rituals.
B) stories.
C) material symbols.
D) cultural typologies.
Repetitive sequences of activities that express and reinforce the key values of the organization, identify important goals and people are referred to as A) rituals.
For an organization, these rituals are called organizational rituals.
Organizational rituals are repetitive activities and behaviors which an employee is expected to undertake in the organization because these activities and behaviors demand clear performance.
As standardized or predictable behaviors and activities, organizational rituals are required to be performed by all employees in order to perpetuate the values that the organization has accepted as means of achieving its goals.
Organizational rituals align an individual employee with others in the organization, thereby creating a shared experience and a sense of common identity that ensure the organization's survival.
Thus, rituals help to ensure that an organization is maintained for its mission.
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price strategy of aquafina
1. Managerial Internal (Inside) accounting information reports are generally prepared for A) Stockholders or Shareholders B) Creditors, Lenders, or Banks C) Managers. D) Regulatory Agencies, like the IRS or SEC
Answer:
C) Managers
Explanation:
Managerial accounting is the accounting that concern with the information received via financial accounting inside the organization. The accouting reports that could be applied for planning, decision making and measuring the performance of the company
So if the managerial accounting information reports are prepared internally so it is for the managers to analyze the overall performance of the organization
Hence, the option c is correct
Why My LinkedIn Lead Generation Is Failing?
Answer:
Your LinkedIn lead generation is failing due to the following mistakes:
Mistake 1. Not Choosing the Right LinkedIn Automation ToolMistake 2. Sending and Sharing Self-Promotional ContentMistake 3. Not Personalizing ContentMistake 4. Not Segmenting LeadsMistake 5. Not sending Follow-UpsMistake 6. Not Paying Attention To StatsThere are tons of big and small mistakes that marketers make when it comes to LinkedIn lead generation. However, the worst thing is to not learn from those mistakes and keep repeating the mistakes.
CONCILIACIONES BANCARIAS
Answer:
ehejejeuywnfwwjwjwhwjegegjshshstehshstejeheteyejuw7yo was a member in its first two seasons of its own and the first team in its history to win the world series 65in 2of 2in 3733333inches the world cup is in its second season as a team that
The three goals of executive compensation are to align management’s interest with the shareholders, to keep management from leaving in bad times, and to refrain from giving too much of shareholder profits to management.
a. True
b. False
provides the following data: 20X920X8 Cash$41,000 $25,000 Accounts Receivable, Net102,000 62,000 Merchandise Inventory72,000 50,000 Property, Plant, and Equipment, Net181,000 120,000 Total Assets$396,000 $257,000 Additional information for the year ending December 31, 20X9: Net Credit Sales$550,000 Cost of Goods Sold150,000 Interest Expense25,000 Net Income181,000 Calculate the rate of return on total assets for 20X9.
Answer:
63.09%
Explanation:
Note Missing question is attached as picture below
Average total assets = (Opening total assets+Closing total assets)/2
Average total assets = ($396,000 + $257,000) / 2
Average total assets = $653,000 / 2
Average total assets = $326,500
Return on total assets = (Net income + Interest expense)/Average total assets
Return on total assets = ($181,000 + $25,000) / $326,500
Return on total assets = $206,000 / $326,500
Return on total assets = 0.6309342
Return on total assets = 63.09%
Tell me about time when you made a mistake how did you find it and what did you do to correct it
Answer:
Briefly explain what the mistake was, but don't dwell on it.Quickly switch over to what you learned or how you improved, after making that mistake.You might also explain the steps you took to make sure that the mistake never happened again.Smith Construction,Inc.just paid a $2.78 dividend.The dividend is expected to grow by 4% each year for the next three years.After that the company will never pay another dividend ever again.If your required return on the stock investment is 10%,what should the stock sell for today?
A) $7.46
B) $28.91
C) $46.33
D) $15.63
Answer:
A) $7.46
Explanation:
The computation of the stock sell for today is given below:
D1 = 2.78 × (1.04)
= 2.89
D2 = 2.89 × (1.04)
= 3.01
D3 = 3.01 × (1.04) = 3.13
Now the price of the stock is
= 2.89 ÷ (1.1) + 3.01 ÷ (1.1)^2 + 3.13 ÷ (1.1)^3
= $7.46
hence, the correct option is a.
The same should be considered and relevant
Dobles Corporation has provided the following data from its activity-based costing system:
Activity Cost Pool Total Cost Total Activity
Assembly $228,060 18,000 mahcine hours
Processing orders $34,068 1200 orders
Inspection $125560 1720 inspection hours
The company makes 420 units of product D28K a year, requiring a total of 460 machine-hours, 80 orders, and 10 inspection-hours per year. The product's direct materials cost is $48.96 per unit and its direct labor cost is $25.36 per unit.
According to the activity-based costing system, the unit product cost of product D28K is closest to:
a. $95.34 per unit
b. $93.60 per unit
c. $74.32 per unit
d. $89.93 per unit
Answer:
Hence the correct option is option (a) i.e. $95.34 per unit.
Explanation:
Cost of 420 units of D28K product = 460 machine hour cost + 80 order cost + 10 inspection hour cost + 420 direct materials cost + 420 direct labor cost.
18000 machine hours = 228060
so 460 machine hours = 228060 x 460 /18000 = 5828.2
1200 orders = 34068
80 orders = 80 x 34068 / 1200 = 2271.2
1720 inspection hours = 125560
10 inspection hours = 10 x 125560/1720 = 730
So cost of 420 units of D28 products = 5828.2 + 2271.2 + 730 + 420 x 48.96 + 420 x 25.36
=40043.8
So cost of 1 D28K product = 40043.8 / 420 = 95.34
Long-term disability insurance _____. a. pays for temporary living expenses and moving expenses incurred by disabled employees b. pays a flat fee for a fixed number of hours of legal assistance each month for disabled employees c. provides continuing income protection for employees who become disabled and are unable to work
Answer: c. provides continuing income protection for employees who become disabled and are unable to work
Explanation:
Disability insurance is very helpful to people who get injured on the job and so are unable to work. The insurance would provide them with an income for a time so that they do not become destitute.
There are different types of disability insurance with varying lengths and long-term disability insurance is one of them. This one provides income protection for a longer time period and is very useful when the injury in question is quite serious or permanently disables the affected person.
Nichols Company uses the percentage of receivables method for recording bad debts expense. The month-end accounts receivable balance is $250,000 and credit sales during the month were $1,000,000. Management estimates that 4% of accounts receivable will be uncollectible. The Allowance for Doubtful Accounts has a credit balance of $2,500 before adjustment. The adjusting entry that Nichols must make includes: a. a credit to the allowance for $7,500. b. a credit to the allowance for $30,000. c. a debit to bad debt expense for $10,000. d. a debit to bad debt expense for $40,000.
Answer: a. a credit to the allowance for $7,500
Explanation:
Estimated Bad Debt = Balance on Account receivable x bad Debt loss rate = $250,000 x 4% = $10,000
Allowance for doubtful accounts with a credit balance of $2,500
Allowance for Bad debts expense =Estimated Bad Debt - Credit balance Allowance for doubtful accounts = $10,000 - $2,500 = $7,500
Account titles and explanation Debit Credit
Bad Debt Expense $7,500
Allowance for Doubtful Accounts $7,500
Shanghai Company sells glasses, fine china, and everyday dinnerware. It uses activity-based costing to determine the cost of the shipping and handling activity. The shipping and handling activity has an activity rate of $8 per pound. A box of glasses weighs 2 pounds, a box of fine china weighs 4 pounds, and a box of everyday dinnerware weighs 6 pounds. Round answers to the nearest whole dollar.
a. Determine the shipping and handling activity for each product.
Glasses $
China $
Everyday dinnerware $
b. Determine the total shipping and receiving costs for the china if 3,500 boxes are shipped.
$
Answer and Explanation:
The computation is shown below:
a. For shipping and handling activity for each product is
For Glasses
= $8 × 2
= $12
For China
= $8 × 4
= $32
And, for Everyday dinner ware
= $8 × 6
= $48
b. the total shipping and receiving costs for the china is
= 3,500 × $32
= $112,000
Hence, in this way the parts could be determined
The following information is available for a company's cost of sales over the last five months. Month Units sold Cost of sales January 470 $ 33,800 February 870 $ 40,500 March 1,950 $ 52,500 April 2,470 $ 64,500 Using the high-low method, the estimated total fixed cost is: Multiple Choice $26,586. $106,344. $53,172. $17,533. $30,700.
TC Units
$64,500 (High) 2,470
} $30,700 } 2000
$33,800( Low) 470
VC per Unit = 30 700 ÷ 2000 = $15.35
when 470 units are sold,( substitute vc per unit = 15.35)
TC = FC + VC
33, 800 = FC + ( 15.35× 470)
FC = $ 26 586
Acoma Co. has identified one of its cost pools to be quality control and has assigned $140,400 to that pool. Number of inspections has been chosen as the cost driver for this pool; Acoma performs 30,000 inspections annually. Suppose Acoma manufactures two products that consume 12,600 (Product 1) and 17,400 (Product 2) inspections each.
Assume that Acoma manufacturers only the two products mentioned and they consume 100 percent of the company’s quality inspections. Using activity proportions, determine how much quality control cost will be assigned to each of Acoma’s product lines.
Answer:
Acoma Co.
Product 1 Product 2
Quality control cost assigned $58,968 $81,432
Explanation:
a) Data and Calculations:
Cost of quality control = $140,400
Number of annual inspections = 30,000
Cost per inspection = $4.68 ($140,400/30,000)
Product 1 Product 2 Total
Number of inspections 12,600 17,400 30,000
Proportion of inspections 42% 58% 100%
Quality control cost assigned $58,968 $81,432 $140,400
($4.68 * 12,600) ($4.68 * 17,400)
(42% * $140,400) (52% * $140,400)
explain how the looting of shops and malls will affect businesses in terms of the relationship between social responsibility and triple bottom line
When people loot shops it shows that they are irresponsible and it goes on to destroy the image of the society they live, destroys a business by taking away their means of making profit.
Social responsibility can be described as the civic and ethical duties that citizens of a country owe to the nation they live.
The three bottom principle has the profit, people and the planet. The looting of shops draws a line between consumers relationships and their social responsibility.
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A business school has 15 full-time faculty and seven of them have tenure. A random sample of six faculty are randomly selected to form a committee. What is the probability that exactly three of the faculty on the committee have tenure?
The probability where exactly three of the faculty have tenure is 0.3916.
The computation of the probability where exactly three of the faculty have tenure is given below:
Since there are 6 faculty from 15 should be chosen so it should be [tex]^{15}C_6[/tex]
Now there are 3 faculty from 7 should be chosen so it should be [tex]^{7}C_3[/tex]
Now the probability is
[tex]= \frac{^7C_3 \times ^8C_3}{^{15}C_6}[/tex]
= 0.3916
Therefore we can conclude that the probability where exactly three of the faculty have tenure is 0.3916.
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The primary responsibility for establishing and maintaining internal control rests with
А
The controller
В.
The internal auditor
С
The treasurer
D
Management
Answer:
D
Explanation:
Management is responsible for establishing and maintaining internal control to achieve the objectives of effective and efficient operations, reliable financial reporting, and compliance with applicable laws and regulations.
An oligopolistic market structure is distinguished by several characteristics, one of which is either similar or identical products. Which of the following are other characteristics of this market structure?
a. Market control by many small firms
b. Difficult entry
c. Mutual interdependence
d. Market control by a few large firms
e. Mutual dependence
Answer:
The correct option is d. Market control by a few large firms.
Explanation:
An oligopolistic market structure can be described as a market structure in which there is a small number of large firms, and none of the large firms can prevent the other large firms in the market from wielding great power.
An oligopolistic market structure is there a market that is dominated and controlled by by a few large firms.
Therefore, the correct option is d. Market control by a few large firms.
You are the manager of Black Spot Computers, which competes directly with Condensed Computers to sell high-powered computers to businesses. From the two businesses’ perspectives, the two products are indistinguishable. The large investment required to build production facilities prohibits other firms from entering this market, and existing firms operate under the assumption that the rival will hold output constant. The inverse market demand for computers is P = 5,900 − Q, and both firms produce at a marginal cost of $800 per computer. Currently, BlackSpot earns revenues of $4.25 million and profits (net of investment, R&D, and other fixed costs) of $890,000. The engineering department at Black Spot has been steadily working on developing an assembly method that would dramatically reduce the marginal cost of producing these high-powered computers and has found a process that allows it to manufacture each computer at a marginal cost of $500. How will this technological advance impact your production and pricing plans? How will it impact Black Spot’s bottom
Brian lives in San Francisco and runs a business that sells guitars. In an average year, he receives $704,000 from selling guitars. Of this sales revenue, he must pay the manufacturer a wholesale cost of $404,000; he also pays wages and utility bills totaling $286,000. He owns his showroom; if he chooses to rent it out, he will receive $3,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Brian does not operate this guitar business, he can work as an accountant, receive an annual salary of $20,000 with no additional monetary costs, and rent out his showroom at the $3,000 per year rate. No other costs are incurred in running this guitar business.
Identify each of Jake's costs in the following table as either an implicit cost or an explicit cost of selling guitars.
Implicit Cost Explicit Cost
The wholesale cost for the guitars that Charles pays
the manufacturer.
The wages and utility bills that Charles pays.
The salary Charles could earn if he worked as an accountant.
The rental income Charles could receive if he chose to rent
out his showroom .
Complete the following table by determining Jake's accounting and economic profit of his guitar business.
Profit (Dollars)
Accounting Profit
Economic Profit
If Jake's goal is to maximize his economic profit, he___stay in the guitar business because the economic profit he would earn as an accountant would be___.
Answer:
The wholesale cost for the guitars that Charles pays the manufacturer - Explicit Cost
The wages and utility bills that Charles pays. - Explicit Cost
The salary Charles could earn if he worked as an accountant. - Implicit Cost
The rental income Charles could receive if he chose to rent
out his showroom - Implicit Cost
$14000
$-9000
should not
$6,000
Explanation:
Accounting profit= total revenue - explicit cost
Total revenue =price x quantity sold
Explicit cost includes the amount expended in running the business.
They include rent , salary and cost of raw materials
$704,000 - ($404,000 + $286,000) = $14000
Economic profit = accounting profit - implicit cost
Implicit cost is the cost of the next best option forgone when one alternative is chosen over other alternatives.
Implicit costs = 20,000 + 3000 = 23,000
14,000 - 23,000 = -9000
Sheridan Company just began business and made the following four inventory purchases in June: June 1 144 units $ 952 June 10 184 units 1472 June 15 184 units 1564 June 28 144 units 1296 $ 5284 A physical count of merchandise inventory on June 30 reveals that there are 194 units on hand. Using the FIFO inventory method, the amount allocated to ending inventory for June is
Answer:
$210,688
Explanation:
The LIFO method of accounting for inventory involves issuing the last items purchased first and those purchased first are issued last hence the acronym LIFO which means last in first out
Given that June 1 144 units $ 952 June 10 184 units 1472 June 15 184 units 1564 June 28 144 units 1296 $ 5284 A physical count of merchandise inventory on June 30 reveals that there are 194 units on hand
Total number purchased during the month
= 144 + 184 + 184 + 144
= 656 units
Using the last in first out method, the 194 units left at the end would be made up of the 144 units purchased on June 1 and 50 units purchased on 10 June hence the amount allocated to ending inventory for June is
= 144 * $952 + 50 * $1472
= $210,688
In 2012, Wingen Inc. sold 325,000 units at $8 each .Sales volume is expected to increase by 15 percent in 2013 while the price of each unit is expected to decrease by 15 percent. the expected sales revenue for 2013 is a. $373,750 b.$2,541,500 c.$1,878,500 d.$2,990,000
Answer:
$2541500
Explanation:
Given :
2012 :
Units sold = 325,000
Price per unit = $8
2013 :
Projected increase in volume = 15%
Projected decrease in price = 15%
Expected revenue = sales price * volume sold
Volume in 2013:
Projected Unit sold in 2013 = (1 + 0.15) * 325000 = 373750
units
Projected Price in 2013 = (1 - 0.15) * Price in 2012 = (1 - 0.15) * $8 = $6.80
Expected revenue = $6.80 * 373750 = $2541500
