An increase in prices will reduce demand, and not supply. You could have an increase in prices due to a shortage, but price increases could also be from a number of other factors, one of which is demand increasing.
Meanwhile, war, scarcity and extreme weather all are possible factors of a shortage. So we can cross choices A,B,C off the list.
Garison Music Emporium carries a wide variety of musical instruments, sound reproduction equipment, recorded music, and sheet music. Garison uses two sales promotion techniques— warranties and premiums— to attract customers.
Below is the information to answer the required question.
a. Musical instruments and sound equipment are sold with a one- year warranty for replacement of parts and labor. The estimated warranty cost, based on past experience, is 2% of sales.
b. The premium is offered on the recorded and sheet music. Customers receive a coupon for each dollar spent on recorded music or sheet music. Customers may exchange 200 coupons and $ 20 for a CD player. Garison pays $ 32 for each CD player and estimates that 60% of the coupons given to customers will be redeemed.
c. Garison’s total sales for 2010 were $ 7,200,000—$ 5,700,000 from musical instruments and sound reproduction equipment and $ 1,500,000 from recorded music and sheet music.
d. Replacement parts and labor for warranty work totaled $ 164,000 during 2010.
e. A total of 6,500 CD players used in the premium program were purchased during the year and there were 1,200,000 coupons redeemed in 2010.
f. The accrual method is used by Garison to account for the warranty and premium costs for financial reporting purposes.
The balances in the accounts related to warranties and premiums on January 1, 2010, were as shown below.
Inventory of Premium CD Players $ 37,600
Estimated Premium Claims Outstanding 44,800
Estimated Liability from Warranties 136,000
Question:
(a) Garison Music Emporium is preparing its financial statements for the year ended December 31, 2010. Determine the amounts that will be shown on the 2010 financial statements for the following.
(1) Warranty Expense -
(2) Estimated Liability from Warranties -
(3) Premium Expense -
(4) Inventory of Premium CD Players -
(5) Estimated Premium Claims Outstanding -
Answer:
Explanation:
(a)
Given:
Warranty exp = 2% of musical instrument & sound equipment
Calculation:
Warranty exp = Warranty exp * 5,424,000
Warranty exp = 2% * 5,424,000
Warranty exp = 108,480
(b)
Warranty liability as on December 2017 = Opening Balance + Warranty Expense - Warranty Claim
Warranty liability as on December 2017 = 138,000 + 108,480 - 156,400
Warranty liability as on December 2017 = $90,080
(c)
The customer receives one coupon for each dollar spend 2,138,000 only 50% coupon will be redeemed.
Exp provision liability created = 50% * 2,138,000
Exp provision liability created = 1,069,000
Customer can exchange 200 coupon & $30 for MP3 player which is purchase for 42 that mean 200 coupon will be for 12 i.e. (42-30) value of coupon will be
12
200
= 0.06.
Value of 1,069,000 coupon = 1,069,000 * 0.06
Value of 1,069,000 coupon = 64,140
(d)
1,138,000 coupons had been redeemed during the year each MP3 player required 200 coupons.
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Cost = 5,690 * 42
Cost = 238,980
Inventory Premium = Opening Balance + Purchases - Utilized Redeemed Coupon
Inventory Premium = 39,210 + (7,010 * 42) - 238,980
Inventory Premium = 39,210 + 294,420 - 238,980
Inventory Premium = $94,650
(e)
Premium liability balance = Opening Balance + Premium Exp Provision - Coupon Redeemed
Premium liability balance = 41,670 + 64,140 - (1,138,000 * 0.06)
Premium liability balance = 41,670 + 64,140 - 68,280
Premium liability balance = 37,530
Assume price exceeds average variable cost over the relevant range of demand. If a monopolistically competitive firm is producing at an output where marginal revenue is $23 and marginal cost is $19, then to maximize profits the firm should A) shut down. B) continue to produce the same quantity. C) decrease output. D) increase output.
Answer:D) increase output.
Explanation:
The marginal cost for production and marginal revenue are measures that businesses use in determining the amount of output and the price of a product that will enable them to maximize profits.
When the marginal revenues are greater than the marginal cost of production, then the firm is making profit per unit and should increase its production so as to make more output until profit is attained. When Marginal Revenue are lower or less than the marginal cost of production, then the firm is making a loss per unit and should decrease its production.
Here, competitive firm is producing at an output where marginal revenue is $23 and marginal cost is $19, then to maximize profits the firm should increase output .
agpie Corporation uses the total cost method of product pricing. Below is cost information for the production and sale of 60,000 units of its sole product. Magpie desires a profit equal to a 25% return on invested assets of $700,000. Fixed factory overhead cost $38,700 Fixed selling and administrative costs 7,500 Variable direct materials cost per unit 4.60 Variable direct labor cost per unit 1.88 Variable factory overhead cost per unit 1.13 Variable selling and administrative cost per unit 4.50 The cost per unit for the production and sale of Magpie's product is
Answer:
$12.88
Explanation:
given information
units sold 60,000
desired profit = 25% x $700,000 = $175,000
fixed factory overhead = $38,700
fixed S&A = $7,500
direct materials per unit = $4.60
direct labor per unit = $1.88
variable overhead per unit = $1.13
variable S&A per unit = $4.50
the cost per unit:
direct materials per unit = $4.60direct labor per unit = $1.88variable overhead per unit = $1.13variable S&A per unit = $4.50fixed factory overhead = $38,700 / 60,000 = $0.645fixed S&A = $7,500 / 60,000 = $0.125total cost per unit = $12.88the desired profit = $2.92, so the selling price to achieve the desired profit should = $15.80
The R-Bar-M Ranch in Montana would like a new mechanized barn, which will require a GH¢600,000 initial cash outlay. The barn is expected to provide after-tax annual cash savings of GH¢90,000 indefinitely (for practical purposes of computation, forever). The ranch, which is incorporated and has a public market for its stock, has a weighted average cost of capital of 14.5 percent. For this project, Mark O. Witz, the president, intends to provide GH¢200,000 from a new debt issue and another GH¢200,000 from a new issue of common stock. The balance of the financing would be provided internally by retaining earnings. The present value of the after-tax flotation costs on the debt issue amount to 2 percent of the total debt raised, whereas flotation costs on the new common stock issue come to 15 percent of the issue. What is the net present value of the project after allowance for flotation costs? Should the ranch invest in the new barn?
Answer:
The Net present value of the project after allowance for flotation costs is - GH¢18,686.10 .
The ranch should not invest in the new barn becuase The NPV is negative.
Explanation:
According to the given data Outflows are as follows:
Initial outlay = GH¢600,000
Flotation cost:
Debt after tax flotation cost in % = 2%
Debt flotation cost = GH¢200,000 / (100% - 2%) * 2% = GH¢4,081.633
Equity flotation cost in % = 15%
Equity flotation cost = GH¢200,000 / (100% - 15%) * 15% =GH¢35,294.118
Total flotation costs = GH¢4,081.633 + GH¢35,294.118 = GH¢39,375.751
According to the given data Inflows are as follows:
Expected to generate perpetual after tax annual cash savings = $90,000
WACC = 14.5%
Present Value of inflows = Perpetual after tax annual cash savings / WACC = GH¢90,000 / 14.5% = GH¢620,689.655
Therefore, to calculate the Net present value of the project after allowance for flotation costs we would have to make the following calculation:
Net present value of the project after allowance for flotation costs = GH¢620,689.655 - GH¢600,000 - GH¢39,375.751 = - GH¢18,686.10
The Net present value of the project after allowance for flotation costs is - GH¢18,686.10
The ranch should not invest in the new barn becuase The NPV is negative.
Fixed expenses are $384,000 per month. The company is currently selling 6,000 units per month. The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $9 per unit. In exchange, the sales staff would accept a decrease in their salaries of $46,000 per month. (This is the company's savings for the entire sales staff.) The marketing manager predicts that introducing this sales incentive would increase monthly sales by 500 units. What should be the overall effect on the company's monthly net operating income of this change?
Answer:
A reduction of $12,500 in net operating income
Explanation:
The net operating income/loss is the difference between the sales and the total costs.
The change in the company's net operating income is the net of the increased commission and the total decrease in salaries. The commission is a variable cost that is dependent on the total number of units sold.
Hence the overall effect on the company's monthly net operating income of this change
= $46,000 - ($9 * 6500)
= ($12,500)
Suire Corporation is considering dropping product D14E. Data from the company's accounting system appear below: Sales $ 600,000 Variable expenses $ 241,000 Fixed manufacturing expenses $ 232,000 Fixed selling and administrative expenses $ 180,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $192,500 of the fixed manufacturing expenses and $107,500 of the fixed selling and administrative expenses are avoidable if product D14E is discontinued. Required: a. According to the company's accounting system, what is the net operating income earned by product D14E
Answer:
$127,000
Explanation:
Suire Corporation Net operating income
Sales $ 600,000
Variable Costs $ 241,000
Contribution Margin $ 359,000
Fixed Expenses $232,000
Net Operating Income $127,000
The Baldwin Company currently has the following balances on their balance sheet: Total Assets $255,213 Total Liabilities $151,328 Retained Earnings $47,588 Suppose next year the Baldwin Company generates $44,200 in net profit, pays $12,000 in dividends, total assets increase by $55,000, and total liabilities remain unchanged. What will ending Baldwins balance in Common Stock be next year? Select: 1 $79,097 $509,129 $381,753 $143,497
Answer:
$79,097
Explanation:
The accounting equation shows the relationship between the elements of a balance sheet which are assets liabilities and equity. This may be expressed mathematically as
Assets = Liabilities + Equity
While assets include fixed assets, cash, inventories, account receivables etc, liabilities include accounts payable, loans payable, accrued expenses etc.
Equity which represents the amount owed to the owners of the business includes retained earnings (which is the accumulation of the net income/loss over the years less dividends paid) and common shares.
Hence in current year,
Total equity = $255,213 - $151,328
= $103,885
If retained earnings is $47,588 then common stock
= $103,885 - $47,588
= $56,297
Change to equity next year
= $55,000
Change to retained earnings
= $44,200 - $12,000
= $32,200
Hence change in common stock
= $55,000 - $32,200
= $22,800
Common stock balance
= $56,297 + $22,800
= $79,097
The Donut Stop acquired equipment for $10,000. The company uses straight-line depreciation and estimates a residual value of $2,000 and a four-year service life. At the end of the second year, the company estimates that the equipment will be useful for four additional years, for a total service life of six years rather than the original four. At the same time, the company also changed the estimated residual value to $1,000 from the original estimate of $2,000. Calculate how much The Donut Stop should record each year for depreciation in years 3 to 6.
Answer:
Cost of Equipment: $10,000
Less Accumulated Depreciation ($10,000 - $2,000 / 4*2): $4,000
= Book Value (End of Year 2): $6,000
Less New Residual Value: $-1,000
= New Depreciated Cost: $5,000
Remaining Service Life: 4
Annual Depreciation in Years 3 to 6 ($5,000 / 4): $1,250
A disadvantage of the "few suppliers" sourcing strategy is: Question 20 options: A) the risk of not being ready for technological change. B) the lack of cost savings for customers and suppliers. C) possible violations of the Sherman Antitrust Act. D) the high cost of changing partners. E) the suppliers are less likely to understand the broad objectives of the procuring firm and the end customer.
Answer: D) the high cost of changing partners.
Explanation: The high cost of changing partners is often a disadvantage of the "few suppliers" sourcing strategy. The few suppliers sourcing strategy is one wherein companies rely on few suppliers in order to lower transaction and production costs, to keep materials and processes tightly regulated among others. It offers some advantages, some of which includes that suppliers are more likely to understand the broad objectives of the end customer ; there is creation of value by allowing suppliers to have economies of scale and the suppliers are often willing to provide technological expertise.
Sheffield Corp. issued $7080000 of 11%, ten-year convertible bonds on July 1, 2020 at 96.1 plus accrued interest. The bonds were dated April 1, 2020 with interest payable April 1 and October 1. Bond discount is amortized semiannually on a straight-line basis. On April 1, 2021, $1416000 of these bonds were converted into 600 shares of $20 par value common stock. Accrued interest was paid in cash at the time of conversion. If "interest payable" were credited when the bonds were issued, what should be the amount of the debit to "interest expense" on October 1, 2020
Answer:
The amount of the debit to "interest expense" on October 1, 2020 is $194,700
Explanation:
According to the given data we have the following:
Bond face value=$7,080,000
interest rate=11%
There are 3 months interest recognized from july to september, therefore, to calculate the amount of the debit to "interest expense" on October 1, 2020 we would have to make the following calculation:
amount of the debit to "interest expense" on October 1, 2020=$7,080,000*11%*3 months / 12 months
amount of the debit to "interest expense" on October 1, 2020=$194,700
The amount of the debit to "interest expense" on October 1, 2020 is $194,700
The relationship between recycling, economics, and energy consumption is demonstrated in the case of aluminum, where ________. it costs more than 10 times as much to produce items from recycled aluminum than from virgin ore the U.S. failure to recycle aluminum has caused energy to be lost in mining new ore it requires over 20 times more energy to mine and extract aluminum from bauxite ore than from recycled materials all of the metal recycling industries in the United States went bankrupt by 2009 new cheap mining technologies and huge newly discovered aluminum deposits have made recycling unprofitable
Answer:
It requires over 20 times more energy to mine and extract aluminum from bauxite ore than from recycled materials.
Explanation:
The relationship between recycling, economics, and energy consumption is demonstrated in the case of aluminum, where it requires over 20 times more energy to mine and extract aluminum from bauxite ore than from recycled materials.
Also, the relationship between recycling, economics, and energy consumption is demonstrated in the case of aluminum, where energy expended to mine and produce items from virgin ore is saved by recycling for about 95%.
Recycling is one of the most effective ways of prolonging our supply of mineral resources.
The following data are taken from the management accounting reports of Dulcimer Co.: Div. ADiv. BDiv. C Income from operations$1,900,000$1,450,000$1,450,000 Total service department charges1,700,0001,050,0001,100,000 If an incentive bonus is paid to the manager who achieved the highest income from operations before service department charges, it follows that a.Division C's manager is given the bonus b.Division B's manager is given the bonus c.Divisions B and C's managers divide the bonus d.Division A's manager is given the bonus
Answer:
Option D
Explanation:
In simple words, the bonus in the given question has to be paid to the managers before the service department charges expenditures which are declining the income from operations. Therefore, it is clearly evident that manager A has best performed in respect to gross revenue collection.
However, the total efficiency is particularly maintained mostly by C division manager as his net income is the highest of them all three. Hence the correct option is D.
On January 1, 2020, Martinez Company makes the two following acquisitions. 1. Purchases land having a fair value of $330,000 by issuing a 4-year, zero-interest-bearing promissory note in the face amount of $483,153. 2. Purchases equipment by issuing a 6%, 9-year promissory note having a maturity value of $380,000 (interest payable annually). The company has to pay 10% interest for funds from its bank. (a) Record the two journal entries that should be recorded by Martinez Company for the two purchases on January 1, 2020. (b) Record the interest at the end of the first year on both notes using the effective-interest method.
Answer:
Explanation:
a)
Date Account Titles and Explanation Debit Credit
January 1, 2020 Land $360,000.00
Discount on notes payable $246,621.00
Notes payable $ 606,621.00
(To record purchase of land by issuing note payable)
PV of $606,621 discounted at 11% =606,621/(1.11)^5 = $ 360,000
2.
Computation of the discount on notes payable:
Maturity value $560,000
Present value of $560,000 due in 8 years at 11% = $560,000 * 0.43393 = $ 243,000
Present value of $39,200 payable annually for 8 years at 11% annually—$39,200 * 5.14612 = $ 201,728
Present value of the note = $ 243,000 + $ 201,728 = $ 444,728
Discount = $ 560,000 - $ 444,728 = $ 115,272
Date Account Titles and Explanation Debit Credit
January 1, 2020 Equipment $444,728.00
Discount on notes payable $115,272.00
Notes payable $ 560,000.00
(To record purchase of equipment by issuing note payable)
b)
1.
Date Account Titles and Explanation Debit Credit
December 31, 2020 Interest expense ($ 360,000*11%) $39,600
Discount on notes payable $39,600
(To record the interest expense recorded and discount amortized)
2.
Date Account Titles and Explanation Debit Credit
December 31, 2020 Interest expense ($444,728 * 11%) $48,920
Discount on notes payable $9,720
Interest Payable ( $ 560,000 * 7%) $39,200
(To record the interest expense recorded)
Windsor Co. is building a new hockey arena at a cost of $2,420,000. It received a down payment of $510,000 from local businesses to support the project, and now needs to borrow $1,910,000 to complete the project. It therefore decided to issue $1,910,000 of 10%, 10-year bonds. These bonds were issued on January 1, 2019, and pay interest annually on each January 1. The bonds yield 9%.
Prepare the journal entry to record the issuance of the bonds on January 1, 2019.
Answer:
Dr Cash $2,032,577.26
Cr premium on bonds payable $122,577.26
Cr bonds payable $1,910,000
Explanation:
First and foremost the proceeds received from the bond issuance needs to determine the pv formula in excel as follows:
=-pv(rate,nper,pmt,fv)
rate is the yield to maturity of 9%
nper is the number of annual coupons payable by the bond which is 10
pmt is the amount of annual coupon i.e $1,910,000*10%=$191000
fv is the face value of the bond which is $1,910,000
=-pv(9%,10,191000,1910000)=$2,032,577.26
premium on bonds issuance= 2,032,577.26-1,910,000.00= $122,577.26
Oldham Corporation bases its predetermined overhead rate on a variable manufacturing overhead cost of $4.00 per machine-hour and fixed manufacturing overhead cost of $87,822 per period. If the denominator level of activity is 4,100 machine-hours, what would be the fixed component in the predetermined overhead rate
Answer:
$21.42
Explanation:
The computation of fixed component in the predetermined overhead rate is shown below:-
Fixed component in the predetermined overhead rate = Fixed Overhead ÷ Machine Hours
= $87,822 ÷ 4,100
= $21.42
Therefore for computing the fixed component in the predetermined overhead rate we simply divide the fixed overhead by machine hours.
And all the other information i.e given is not relevant. Hence, ignored it
When China reformed state-owned enterprises, it tried a new approach to choosing managers: it put managerial jobs up for auction. The bids for the jobs consisted of promises of future profit streams that the managers would generate and then deliver to the state. In cases where the incumbent manager was the winning bidder, firm productivity tended to increase dramatically. When outside bidders won, there was little productivity improvement. If incumbent managers were not generally more qualified, how can you explain this result?
Answer: The explanation is provided below
Explanation:
An outsider tend to overbid with a eye to get the job while, an insider manager bids a realistic performance that is achievable. An insider manager understands the factors which affect the organization's performance and then tries to take control of the factors.
People make or break organizations and there is a greater chance of the insider getting the support and cooperation of the employees in comparision to outside bidders. Also, an insider manager has a prospective that is long term with regard to his or her association with the enterprise while an outsider may come and then realize that he doesn't like the organization and then leave for a better enterprise.
Therefore internal managers are a better prospect of being given the responsibility to manage the enterprise.
Answer:
Explanation:
A stranger tends to bid excessively to get the job. In contrast, the internal manager offers realistic, achievable performance. The internal manager understands the factors that influence the organization's performance and tries to take control of it. There is a greater chance that an insider will get employee support and cooperation than strangers . Insider manager has been in the organisation for and already know the rules that guide the company, The Dos ans Donts.. A stranger have lilttle or no knowledge about how the company is run and can choose to stay or he will go to a better company. Therefore, internal managers are in good position for taking responsibility for running the welfare and activites of a company.
At the start of the current year, SBC Corp. purchased 25% of Sky Tech Inc. for $47 million. At the time of purchase, the carrying value of Sky Tech's net assets was $80 million. The fair value of Sky Tech's depreciable assets was $12 million in excess of their book value. For this year, Sky Tech reported a net income of $80 million and declared and paid $12 million in dividends. The total amount of additional depreciation to be recognized by SBC over the remaining life of the assets is:
Answer:
$3
Explanation:
SBC Corp
($million)
FV in excess of book value $12
×
Share of ownership 25%
Additional depreciation in total $3
Therefore the total amount of additional depreciation to be recognized by SBC over the remaining life of the assets is: $3
On January 1, 2017, Shamrock Inc. issued $400,000 of 7%, 5-year bonds at par. Interest is payable semiannually on July 1 and January 1. Prepare journal entries to record the following. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.) (a) The issuance of the bonds. (b) The payment of interest on July 1. (c) The accrual of interest on December 31.
Answer and Explanation:
The journal entries are shown below:
On Jan 1
Cash $400,000
To Bonds payable $400,000
(Being the bond is issued for cash)
For recording this we debited the cash as it increased the assets and at the same time it increased the liabilities so the bond payable is credited
On July 1
Interest expense $14,000
To Cash $14,000
(Being the payment of interest is recorded)
The computation is shown below:
= $400,000 × 7% × 6 months ÷ 12 months
= $14,000
For recording this we debited the expenses as it increased the expenses and at the same time it decreased the assets so the cash is credited
On Dec 31
Interest expense $14,000
To Interest payable $14,000
(Being the accrual of interest is recorded)
For recording this we debited the expenses as it increased the expenses and at the same time it increased the liabilities so the interest payable is credited
Depreciation by Two Methods A storage tank acquired at the beginning of the fiscal year at a cost of $80,000 has an estimated residual value of $4,000 and an estimated useful life of 20 years. a. Determine the amount of annual depreciation by the straight-line method. $ b. Determine the amount of depreciation for the first and second years computed by the double-declining-balance method. Do not round the double-declining balance rate. If required, round your answers to the nearest dollar.
Answer:
a. Annual depreciation = $3,800
b. First year depreciation is $8,000' while second year depreciation is $7,200.
Explanation:
a. Determine the amount of annual depreciation by the straight-line method.
Depreciable amount = $80,000 - $4,000 = $76,000
Annual depreciation = $76,000 / 20 = $3,800
b. Determine the amount of depreciation for the first and second years computed by the double-declining-balance method. Do not round the double-declining balance rate. If required, round your answers to the nearest dollar.
Straight line depreciation rate = 1 / 20 = 0.05, or 5%
Double declining depreciation rate = 5% * 2 = 10%
First year depreciation = $80,000 * 10% = $8,000
Second year depreciation = ($80,000 - $8,000) * 10% = $7,200
COST VOLUME PROFIT ANALYSIS Comfort Homeless Inc, a factory that produces beds for homeless shelters, is considering extending its production and introducing a new bed with ungraded features this upcoming spring season. The selling price for the each of the beds is $48. Currently, to produce the beds, Comfort Homeless Inc states it cost $22. The variable cost total $6, whereas month fixed costs are $16,000. Instructions: a. Calculate the breakeven point in units .(20 points) b. Comfort Homeless Inc. increases its selling price from $48 a bed to $49.95 a bed. Calculate the new breakeven points in units. (20 points) c. Find the new breakeven point in units if the cost to produce the beds will decrease to $19 each because a new supplier was found when purchasing the raw materials. (20 points) d. Comfort Homeless Inc. is considering selling mattresses. It only expects to sell one mattress for every bed it sells. Comfort Homeless Inc. can purchase the mattresses for $5 each and sell them for $9 each. Total fixed cost should remain the same at $16,000 per month. Calculate the breakeven point in units for beds and mattresses. (40 points)
Answer:
Instructions are below.
Explanation:
Giving the following information:
Selling price per unit= $48
Unitary variable cost= $6
Total fixed costs= $16,000
A)
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= 16,000/ (48 - 6)
Break-even point in units= 381 units
B) Selling price= $49.95 a bedpoints
Break-even point in units= 16,000/ (49.95 - 6)
Break-even point in units= 364 units
C) Unitary variable cost= 6 - 3= 3
Break-even point in units= 16,000 / (48 - 3)
Break-even point in units= 356 units
D) Matresses= 1
Beds= 1
Proportions of sales:
Matreses= 0.5
Beds= 0.5
Selling price per matress= $9
Unitary variable cost= $5
Break-even point (units)= Total fixed costs / Weighted average contribution margin ratio
Weighted average contribution margin ratio= (weighted average selling price - weighted average unitary variable cost)
Weighted average contribution margin ratio= (0.5*9 + 0.5*48) - (0.5*5 + 0.5*6)
Weighted average contribution margin ratio= $23
Break-even point (units)= 16,000/23
Break-even point (units)= 696 units
What are antitrust laws? Laws governing the management of state-owned enterprises. Legislation enacted to prevent the encroachment of government into the private sector. Laws meant to protect businesses from unfair treatment from consumers. Laws meant to eliminate collusion and promote competition among firms. Identify the first antitrust law and its purpose. The Clayton Act of 1950 toughened restrictions on mergers by prohibiting any merger that leads to reduced competition. The Federal Trade Commission Act of 1914 established the FTC. The Robinson-Patman Act of 1936 prohibited anticompetitive price discrimination. The Sherman Act of 1890 prohibits price fixing, collusion, and monopolization. The Clayton Act of 1890 prohibits firms from owning stock in competing firms. The Sherman Act of 1914 established the Federal Trade Commission.
Answer: 1. Laws meant to eliminate collusion and promote competition among firms.
2. The Sherman Act of 1890 prohibits price fixing, collusion, and monopolization.
Explanation:
1. Anti-trust laws are meant to protect the customer from predatory practices by businesses such as collusion hence ensuring that there is competition in the market for the benefit of the consumer.
2. Named after the man who introduced it, Sen. John Sherman, the Sherman Act was passed in 1890 as the first Anti-trust law in the United States of America. It was meant to ensure that competition existed between Enterprises for the benefit of ordinary citizens.
According to the Air Transport Association of America, the average operating cost of an MD-80 jet airliner is $2,087 per hour. Suppose the operating costs of an MD-80 jet airliner are normally distributed with a standard deviation of $174 per hour. (Round the value of z to 2 decimal places. Round your answers to 2 decimal places.) (a) At what operating cost would only 23% of the operating costs be less? $Entry field with correct answer 1958.44 (b) At what operating cost would 65% of the operating costs be more? $Entry field with correct answer 2019.95 (c) What operating cost would be more than 85% of operating costs ?
Answer:
(a)$1955
(b)$2017.19
(c)$2273.16
Explanation:
Check attachment
Offenbach & Son has just made its sales forecasts and its marketing department estimates that the company will sell 232,200 units during the coming year. In the past, management has maintained inventories of finished goods at approximately one month’s sales. The inventory at the start of the budget period is 15,600 units. Sales occur evenly throughout the year. Required: Estimate the production level required for the coming year to meet these objectives.
Answer:
Production= 235,950 units
Explanation:
Giving the following information:
Sales= 232,200 units during the coming year.
Desired ending inventory= one month's sales
Beginning inventory= 15,600 units.
First, we need to calculate the desired ending inventory:
Desired ending inventory= 232,200/12= 19,350
Now, we can determine the production for the year:
Production= sales + desired ending inventory - beginning inventory
Production= 232,200 + 19,350 - 15,600
Production= 235,950 units
Hooper Chemical Company, a major chemical firm that uses such raw materials as carbon and petroleum as part of its production process, is examining a plastics firm to add to its operations. Before the acquisition, the normal expected outcomes for the firm were as follows: Outcomes ($ millions) Probability Recession $ 10 0.3 Normal economy 50 0.5 Strong economy 60 0.2 Compute the expected value, standard deviation, and coefficient of variation prior to the acquisition. (Do not round intermediate calculations. Enter your dollar answers in millions rounded to 2 decimal places (e.g., $12,300,000 should be entered as "12.30"). Round the coefficient of variation to 3 decimal places.)
Answer:
Expected Value (EV) = 40
Standard Deviation = 20
Coefficient of Variation = 0.5
Explanation:
Outcomes ($ millions) Probability
Recession $10 0.3
Normal Economy $50 0.5
Strong economy $60 0.2
Expected value, μ = Outcome × probability
= ($10 × 0.3) + ($50 × 0.5) + ($60 × 0.2) = 3 + 25 + 12 = 40
∑(x₁ - μ)²
Standard deviation, σ = √(∑(x₁ - μ)²) / N
X = Outcomes
μ = Expected value
X ( x -μ) (x₁ - μ)² (x₁ - μ)²) × Probability
10 10 - 40 = - 30 900 900 * 0.3 = 270
50 50 - 40 = 10 100 100 * 0.5 = 50
60 60 - 40 = 20 400 400 * 0.2 = 80
Total = 400
Standard deviation = √400 = 20
Coefficient of Variation = Standard deviation / Mean
= 20 / 40
= 0.5
Cybernet Systems is a​ start-up company that makes connectors for​ high-speed Internet connections. The company has budgeted variable costs of $150 for each connector and fixed costs of $ 5,500 per month. Cybernet ​'s static budget predicted production and sales of 100 connectors in​ August, but the company actually produced and sold only 77 connectors at a total cost of $ 28,000. Cybernet Systems flexible budget variance for total costs is:_________
Answer:
$10,950 Unfavorable
Explanation:
For computation of flexible budget variance for total costs first we need to find out the standard cost which is shown below:-
Standard cost = (Sold connectors × budgeted variable costs) + Fixed costs per month
= (77 × $150) + $5,500
= $11,550 + $5,500
= $17,050
Flexible budget variance for total costs = Actual cost - Standard cost
= $28,000 - $17,050
= $10,950 Unfavorable
Zolezzi Inc. is preparing its cash budget for March. The budgeted beginning cash balance is $27,000. Budgeted cash receipts total $104,000 and budgeted cash disbursements total $87,000. The desired ending cash balance is $70,000. The company can borrow up to $90,000 at any time from a local bank, with interest not due until the following month. Required: Prepare the company's cash budget for March in good form. Make sure to indicate what borrowing, if any, would be needed to attain the desired ending cash balance.
Answer:
Zolezzi Inc.
Cash budget for March
Amount in $'000
Opening balance 27
Add;
Cash receipts 104
Less;
Cash disbursements (87)
Ending balance 44
Amount to be borrowed 26
Desired ending balance 70
Explanation:
The cash budget a forecast of the expected movement in cash balance. This is as a result of expected cash receipts and disbursements and may be expressed mathematically as
opening cash balance + cash receipts - Cash disbursed = closing cash balance
27 + 104 - 87 = ending balance
Ending balance = 44
Desired ending balance = 70
Amount to be borrowed = 70 - 44
= 26
Indigo Incorporated factored $135,100 of accounts receivable with Sweet Factors Inc. on a without-recourse basis. Sweet assesses a 3% finance charge of the amount of accounts receivable and retains an amount equal to 7% of accounts receivable for possible adjustments. Prepare the journal entry for Indigo Incorporated and Sweet Factors to record the factoring of the accounts receivable to Sweet.
Answer:
Indigo Incorporated Journal entrie
Dr Cash 121,590
Dr Due from Factor 9,457
Dr Loss on Sale of Receivable 4,053
Cr Accounts Receivable 135,100
Sweet Factors Inc
Dr Account Receivable 135,100
Cr Due to Customer 9,457
Cr Finance Revenue 4,053
Cr Cash 121,590
Explanation:
Indigo Incorporated Journal entries
Dr Cash 121,590
Dr Due from Factor 9,457
Dr Loss on Sale of Receivable 4,053
Cr Accounts Receivable 135,100
Sweet Factors Inc
Dr Account Receivable 135,100
Cr Due to Customer 9,457
Cr Finance Revenue 4,053
Cr Cash 121,590
Due from Factor = 7% x $135,100 = $9,457
Loss on Sale of Receivables = 3% x $135,100= $4,053
Teall Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs). The company has provided the following data for the most recent month: Budgeted level of activity 9,000 MHs Actual level of activity 9,100 MHs Standard variable manufacturing overhead rate $ 6.20 per MH Budgeted fixed manufacturing overhead cost $ 55,000 Actual total variable manufacturing overhead $ 56,600 Actual total fixed manufacturing overhead $ 59,500 What was the fixed manufacturing overhead budget variance for the month?
Answer:
$4,500 U
Explanation:
Teall Corporation
Budget variance = Actual fixed overhead cost − Budgeted fixed overhead cost
Actual total fixed manufacturing overhead $ 59,500
Less Budgeted fixed manufacturing overhead cost $ 55,000
Fixed manufacturing overhead budget variance for the month $4,500 U
Therefore the fixed manufacturing overhead budget variance for the month is $4,500 U
Financial Crisis
Suppose that banks are less able to raise funds and so lend less. Consequently, because people and households are less able to borrow, they spend less at any given price level than they would otherwise. The crisis is persistent so lending should remain depressed for some time. Refer to Financial Crisis. In the long run, if the Fed does not respond, the change in price expectations created by the crisis shifts:
a. short-run aggregate supply right.
b. aggregate demand right.
c. aggregate demand left.
d. short-run aggregate supply left.
Answer:
The correct answer to the given question is “D – Short-Run Aggregate Supply Left”
Explanation:
While the problem is there for offering and deriving, less asset is being completed on the budget. Thus due to the lack of capital. The investment standard growing will decrease and therefore as an outcome, short run cumulative source curve will move to the left.
For the cost and price functions below, find
a. the number, q, of units that produces maximum profit
b. the price, p, per unit that produces maximum profit
c. the maximum profit, P.
C(q) = 70 + 17q
p = 77 - 2q
Answer:
a) The number, q, of units that produces maximum profit = 15
b) The price, p, per unit that produces maximum profit = 47 (currency not giben in the question)
c) Maximum Profit = P = 380 (currency not given in the question).
Explanation:
The cost function and price per unit function are given respectively as
C(q) = 70 + 17q
p = 77 - 2q
where q = quantity or number of units
a.) the number, q, of units that produces maximum profit
Total cost = C(q) = 70 + 17q
Revenue = (price per unit) × (Number of units) = p × q = (77 - 2q) × q = (77q - 2q²)
Profits = P(q) = (Revenue) - (Total Cost)
P(q) = (77q - 2q²) - (70 + 17q)
P(q) = -2q² + 60q - 70
To maximize the profits, we just obtain the point where the profit function reaches a Maximum.
At the maximum of a function, (dP/dq) = 0 and (d²P/dq²) < 0
Profit = P(q) = -2q² + 60q - 70
(dP/dq) = -4q + 60
At maximum point,
(dP/dq) = -4q + 60 = 0
q = (60/4) = 15
(d²P/dQ²) = -4 < 0 (hence, showing that the this point corresponds to a maximum point truly)
Hence, the number, q, of units that produces maximum profit = 15.
b.) the price, p, per unit that produces maximum profit
The price per unit is given as
p = 77 - 2q
Maximum profit occurs at q = 15
p = 77 - (2×15) = 47
Hence, the price, p, per unit that produces maximum profit = 47 (currency not given in the question)
c.) the maximum profit, P.
The Profit function is given as
Profit = P(q) = -2q² + 60q - 70
At maximum Profit, q = 15
Maximum Profit = P(15)
= -2(15²) + 60(15) - 70
= 380 (currency not given in the question).
Hope this Helps!!!
A) The number, q, of units that produce maximum profit is = 15
B) The price, p, per unit that creates maximum profit is = 47
C) Maximum Profit is = P = 380
What is the cost and price function?
When The cost procedure and price per unit procedure are presented respectively as:
C(q) is = 70 + 17q
p is = 77 - 2q
where that q is = quantity or number of units
a.) When the number, q, of units that produce maximum profit
The Total cost is = C(q) = 70 + 17q
When the Revenue is = (price per unit) × (Number of units) that is = p × q = (77 - 2q) × q is = (77q - 2q²)
After that Profits is = P(q) = (Revenue) - (Total Cost)
Then P(q) is = (77q - 2q²) - (70 + 17q)
Now, P(q) is = -2q² + 60q - 70
When To maximize the profits, Then we just obtain the point where the profit function reaches a Maximum.
When At the maximum of a function, (dP/dq) is = 0 and (d²P/dq²) < 0
Profit is = P(q) = -2q² + 60q - 70
(dP/dq) is = -4q + 60
Then At maximum point are:
(dP/dq) is = -4q + 60 = 0
After that, q = (60/4) = 15
Then (d²P/dQ²) = -4 < 0 (hence, showing that this point corresponds to a maximum point truly)
Therefore, the number, q, of units that produce maximum profit is = 15.
b.) When the price, p, per unit that produces maximum profit
The price per unit is given as
p is = 77 - 2q
Then Maximum profit occurs at q is = 15
p is = 77 - (2×15) = 47
Therefore, the price, p, per unit that produces maximum profit is = 47 (currency not provided in the question)
c.) When the maximum profit, P.
The Profit function is given as
Profit is = P(q) = -2q² + 60q - 70
Then At maximum Profit, q = 15
So, The Maximum Profit is = P(15)
Then = -2(15²) + 60(15) - 70
Therefore, = 380 (currency not given in the question).
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