Answer:
B. total profit is maximized.
Explanation:
This is explained to be the long run or the short run process in which a firm is seen to determine the cost of sales revenue of the said firm this can be directly explained to be in the duration of a year. Economic models have explained to us that in various forms of market structure such as perfect competition, monopoly, monopolistic competition, microeconomic theory is seen to detail extensively the determination of price and output by assuming that firm’s aim is to maximise current or short run profits. This model of profit maximizing approach also are seen to directly select output on the basis that total output is maximized.
The firm's profit-maximizing output level is \(q = \frac{1}{4}\). The profit-maximizing output level for a monopolistic firm can be determined by setting marginal revenue equal to marginal cost.
To find the firm's marginal revenue, we need to calculate the derivative of the demand function. The derivative of the demand function \(Q(p) = 100 - 2p\) with respect to price \(p\) is \(\frac{dQ}{dp} = -2\). This derivative represents the rate at which quantity demanded changes with respect to price.
Since the monopolistic firm is the sole producer in the market, the market demand is equal to the firm's demand. Thus, the firm's marginal revenue (\(MR\)) is given by \(MR = \frac{dQ}{dp} = -2\).
To find the firm's marginal cost (\(MC\)), we need to calculate the derivative of the cost function. The derivative of the cost function \(C(q) = 100 + 4q^2\) with respect to quantity \(q\) is \(\frac{dC}{dq} = 8q\). This derivative represents the rate at which cost changes with respect to quantity.
Setting \(MR = MC\), we have \(-2 = 8q\). Solving for \(q\), we get \(q = -\frac{2}{8} = -\frac{1}{4}\).
Since quantity cannot be negative, we discard the negative value and take the positive value, \(q = \frac{1}{4}\).
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To develop an effective control system, it must be related to the organizational strategy. Yes or no.
Answer:
yes
Explanation:
because in order for everything to be organized you need to know how the system is running
Chapman Company, a major retailer of bicycles and accessories, operates several stores and is a publicly traded company. The comparative balance sheet and income statement for Chapman as of May 31, 2014, are as follows. The company is preparing its statement of cash flows.
CHAPMAN COMPANY
COMPARATIVE BALANCE SHEET
AS OF MAY 31
2014 2013
Current assets
Cash $28,560 $20,820
Accounts receivable 75,850 58,940
Inventory 220,080 250,770
Prepaid expenses 9,148 7,580
Total current assets 333,638 338,110
Plant assets
Plant assets 600,070 502,460
Less: Accumulated depreciation—plant assets
150,060 125,320
Net plant assets 450,010 377,140
Total assets $783,648 $715,250
Current liabilities
Accounts payable $123,190 $115,200
Salaries and wages payable 47,660 72,420
Interest payable 27,980 25,490
Total current liabilities 198,830 213,110
Long-term debt
Bonds payable 70,770 100,640
Total liabilities 269,600 313,750
Stockholders’ equity
Common stock, $10 par 370,460 280,890
Retained earnings 143,588 120,610
Total stockholders’ equity 514,048 401,500
Total liabilities and stockholders’ equity
$783,648 $715,250
CHAPMAN COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED MAY 31, 2014
Sales revenue $1,255,260
Cost of goods sold 722,590
Gross profit 532,670
Expenses
Salaries and wages expense 252,580
Interest expense 75,830
Depreciation expense 24,740
Other expenses 8,980
Total expenses 362,130
Operating income 170,540
Income tax expense 43,250
Net income $127,290
The following is additional information concerning Chapman’s transactions during the year ended May 31, 2014.
1. All sales during the year were made on account.
2. All merchandise was purchased on account, comprising the total accounts payable account.
3. Plant assets costing $97,610 were purchased by paying $17,610 in cash and issuing 8,000 shares of stock.
4. The "other expenses" are related to prepaid items.
5. All income taxes incurred during the year were paid during the year.
6. In order to supplement its cash, Chapman issued 957 shares of common stock at par value.
7. Cash dividends of $104,312 were declared and paid at the end of the fiscal year.
Prepare a statement of cash flows for Chapman Company for the year ended May 31, 2014, using the direct method. (A reconciliation of net income to net cash provided is not required.) (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Answer:
Chapman Company
Statement of Cash Flows for the year ended May 2014:
Operating activities:
Cash from customers $1,238,350
Cash to suppliers ($683,910)
Salaries & Wages (277,340)
Other expenses (10,548)
Income Tax (43,250)
Net Cash from operating activities 223,302
Investing activities:
Plant (17,610) (17,610)
Financing activities:
Dividends (104,312)
Interest (73,340)
Bonds (29,870)
Issue of stock 9,570
Net cash from financing activities (197,952)
Net cash flows $7,740
Explanation:
a) Data and Calculations:
1. CHAPMAN COMPANY
COMPARATIVE BALANCE SHEET
AS OF MAY 31
2014 2013
Current assets
Cash $28,560 $20,820
Accounts receivable 75,850 58,940
Inventory 220,080 250,770
Prepaid expenses 9,148 7,580
Total current assets 333,638 338,110
Plant assets
Plant assets 600,070 502,460
Less: Accumulated depreciation
—plant assets 150,060 125,320
Net plant assets 450,010 377,140
Total assets $783,648 $715,250
Current liabilities
Accounts payable $123,190 $115,200
Salaries & wages payable 47,660 72,420
Interest payable 27,980 25,490
Total current liabilities 198,830 213,110
Long-term debt
Bonds payable 70,770 100,640
Total liabilities 269,600 313,750
Stockholders’ equity
Common stock, $10 par 370,460 280,890
Retained earnings 143,588 120,610
Total stockholders’ equity 514,048 401,500
Total liabilities and stockholders’
equity $783,648 $715,250
2. CHAPMAN COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED MAY 31, 2014
Sales revenue $1,255,260
Cost of goods sold 722,590
Gross profit 532,670
Expenses
Salaries and wages expense 252,580
Interest expense 75,830
Depreciation expense 24,740
Other expenses 8,980
Total expenses 362,130
Operating income 170,540
Income tax expense 43,250
Net income $127,290
3) Cash Receipts:
Cash from customers $1,238,350
Issue of stock 9,570
4) Cash Payments:
Cash to suppliers $683,910
Plant 17,610
Income Tax 43,250
Dividends 104,312
Salaries & Wages 277,340
Interest 73,340
Other expenses 10,548
Bonds 29,870
5) Prepaid Expenses
Ending balance $9,148
Expenses 8,980
Beginning balance 7,580
Cash paid $10,548
6) Accounts Receivable:
Beginning balance $58,940
Sales 1,255,260
Ending balance 75,850
Cash received $1,238,350
7) Accounts Payable:
Beginning balance $115,200
Purchases 691,900
Ending balance $123,190
Cash paid $693,910
8) Purchases:
Ending inventory $220,080
Cost of goods sold 722,590
Beginning inventory 250,770
Purchases $691,900
9) Salaries and Wages Payable
Beginning balance $72,420
Expenses 252,580
Ending balance 47,660
Cash paid $277,340
10) Interest payable:
Beginning balance $25,490
Expense 75,830
Ending balance 27,980
Cash paid $73,340
It is crucial to understand the various factors contributing to your employees' stress as well as the consequences of it. Categorize the following sources of stress by dragging and dropping each one into its most appropriate category.
1. Task demands
2. Economic uncertalinty
3. Economic problems
4. Interpersonal demands
5. Technological change
6. Family problems
A. Environmental Sources of Stress B. Organizational Sources of Stress C. Personal Sources of Stress
Explanation:
A. Environmental Sources of Stress:
It is the stressors arising from environmental factors that can threaten the employee's work in some way.
2- Economic uncertalinty
5- Technological change
B. Organizational Sources of Stress:
This stress derives from internal or external conflicts that can occur at work, such as personal charges and poor relationships with other employees.
1. Task demands
4. Interpersonal demands
C. Personal Sources of Stress:
These are the stressors arising from the employee's personal life, which can directly impact the quality with which the employee performs his work.
3. Economic problems
6. Family problems
g A decrease in the basis will __________ a long hedge and __________ a short hedger. Group of answer choices hurt; hurt hurt; benefit benefit; have no effect upon benefit; benefit benefit; hurt
Answer:
1. hurt
2. benefit
Explanation:
Given that a contract and an asset are to be converted in cash early, this implies that, basis risk exists and futures price and spot price should not move in lockstep before delivery date. However, a reduction in the basis will then hurt the long hedger and benefit the short hedger.
Hence, considering the nature of the hypothetical situation, a decrease in the basis will HURT a long hedge and BENEFIT a short hedge.
An 85-year old risk averse investor is not happy about the minimal return she is earning on her current investments. She is stressed about having enough income because her cost of living has been increasing by more than 10% annually. Her current portfolio composition consists of:
40% Money Market Fund
50% Bonds
10% Equities
What changes should you suggest to her portfolio?
A. Reduce the Money Market Fund allocation by 10% (to 30%) and put the released funds in commodities such as gold
B. Reduce the Money Market Fund allocation by 30% (to 10%) and put the released funds in AAA-rated corporate bonds
C. Liquidate the entire Money Market Fund allocation and put the released funds in Equities, bringing that allocation up to 50%
D. Liquidate the entire Money Market Fund allocation and put the released funds in U.S. Treasury securities
Answer:
B. Reduce the Money Market Fund allocation by 30% (to 10%) and put the released funds in AAA-rated corporate bonds
Explanation:
First of all, since the investor is risk averse and cannot afford to lose money on any risky investment, she should change the mix of her investment portfolio but without increasing risks. Corporate bonds that are AAA-rated carry a very low risk and pay a little higher than money market funds. So a small decrease in money market fund assets and an increase in AAA-rated bonds should yield a slightly higher return.
Investing in equities would be too risky and US Treasuries pay even less interests than money market funds.
One of the primary reasons for the failure of quality circles is because management refuses to listen to the quality improvement ideas of subordinates.
A. True
B. False
The failure of quality circles is not because management refuses to listen to the quality improvement ideas of subordinates.
What do you mean by quality circles?Quality circles refer to a method that helps in encouraging group involvement.
The major reason for the failure of quality circles is because of the rejection of the concept by top management, labor turnover, lack of cooperation from middle and first-line managers, etc.
Therefore, the above statement is false.
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Jonas doesn't want to keep his savings in an account because he doesn't want to pay bank fees. Which of the following is an argument against Jonas's thinking? Cash allows people to live in the moment. It is better to have cash for emergencies. Money is safer in the bank. The cost of living is increasing yearly.
The correct answer is C. Money is safer in the bank.
Explanation:
The main point or position of Jonas is that savings should be kept in an account due to the costs associated with this. In this context, the only argument that refutes Jonas' position and it is directly related to the main point of Jonas is "Money is safer in the bank" because even if keeping savings in a bank requires to pay fees this guarantees the money will be safe, which does not occur if Jonas keeps his savings at home. Moreover, the safety factor makes the option of the bank better, which refutes Jonas position.
Answer:
Money is safer in the bank.
Explanation:
Zane, a new employee, is eager to get a promotion soon, and he hopes he can quickly rise through the ranks at the company. He decides to ask his supervisor, Mary, for professional development advice. This is an example of which of the following types of communication?
a. Downward
b. None of these are correct.
c. Upward
d. Horizontal
e. Diagonal
Answer:
C
Explanation:
Upward communication is communication from lower hierarchy in the organisation to higher hierarchy in the organisation
Downward communication is communication from higher hierarchy in the organisation to lower hierarchy in the organisation
Horizontal communication is communication within the same organisation hierarchy
Diagonal communication is cross functional communication between employees at different levels of the organisation
Gabriele Enterprises has bonds on the market making annual payments, with eleven years to maturity, a par value of $1,000, and selling for $982. At this price, the bonds yield 7.6 percent.
Required:
What must the coupon rate be on the bonds?
Answer:
The answer is 7.35 percent
Explanation:
N(Number of periods) = 11years
I/Y(Yield to maturity) = 7.6 percent
PV(present value or market price) = $982
PMT( coupon payment) = ?
FV( Future value or par value) = $1,000.
We are using a Financial calculator for this.
N= 11; I/Y = 7.6; PV = -$982; FV= $1,000; CPT PV= $73.52
Therefore, coupon rate is ($73.52/$1,000) x 100 percent
=7.35 percent
Careco Company and Audaco Inc are identical in size and capital structure. However, the riskiness of their assets and cash flows are somewhat different, resulting in Careco having a WACC of 10% and Audaco a WACC of 12%. Careco is considering Project X, which has an IRR of 10.5% and is of the same risk as a typical Careco project. Audaco is considering Project Y, which has an IRR of 11.5% and is of the same risk as a typical Audaco project. Now assume that the two companies merge and form a new company, Careco/Audaco Inc. Moreover, the new company's market risk is an average of the pre-merger companies' market risks, and the merger has no impact on either the cash flows or the risks of Projects X and Y. Which of the following statements is correct?
A) if evaluated using the correct post-merger wacc, project x would have a negative npv.
B) after the merger, careco/audaco would have a corporate wacc of 11%. therefore, it should reject project x but accept project y.
C) careco/audaco's wacc, as a result of the merger, would be 10%.
D) after the merger, careco/audaco should select project y but reject project x. if the firm does this, its corporate wacc will fall to 10.5%.
E) if the firm evaluates these projects and all other projects at the new overall corporate wacc, it will probably become riskier over time.
Answer:
E) if the firm evaluates these projects and all other projects at the new overall corporate wacc, it will probably become riskier over time.
Explanation:
Before the merger, Audaco would have rejected any project with an IRR of less than 12% (more risky investments) while Careco only required a 10% IRR (less risky projects). But after the merger the combined WACC will be lower than Audaco's, but higher than Careco's. Therefore, the new merged company will start accepting more risky projects and that tendency will continue over time. Eventually, the company's WACC will have to adjust and increase, and the cycle will continue.
Milltown Company specializes in selling used cars. During the month, the dealership sold 26 cars at an average price of $15,400 each. The budget for the month was to sell 24 cars at an average price of $16,400. Compute the dealerships sales volume variance for the month.
Answer:
Sales volume variance = $32,800 favorable
Explanation:
Please refer to the below for Sales Volume Variance formula and calculation.
Sales Volume Variance = (Budgeted sales volume - Actual sales volume) Standard price per unit
= ( 24 units - 26 units) $16,400
= ( 2 units ) $16,400
= $32,800 favorable
Marks Company makes one product, for which it has established the following standards for materials: Average quantity of material per unit of product: 4.5 pounds Price per pound of materials, $16 During March, Marks made 10,000 units of the product, using 50,000 pounds at a total purchase price of $825,000. What is the materials price variance
Answer:
Direct material price variance= $25,000 unfavorable
Explanation:
Giving the following information:
Standard price= $16
During March, Marks made 10,000 units of the product, using 50,000 pounds at a total purchase price of $825,000.
To calculate the direct material price variance, we need to use the following formula:
Direct material price variance= (standard price - actual price)*actual quantity
Actual price= 825,000/50,000= $16.5
Direct material price variance= (16 - 16.5)*50,000
Direct material price variance= $25,000 unfavorable
Suppose that, in a two-year interest rate swap, the floating rate for each year is determined as the one-year rate at the beginning of the year, but payments are made at the end of the year. According to the relevant yield curve for the swap, the one-year spot rate of interest is 6%. Find the appropriate fixed rate for the two-year swap.
Answer:
¿Hablas español porque no entiendo esto? Si lo haces, ¿puedes decirme en español?
Explanation:
Dewyco has preferred stock trading at per share. The next preferred dividend of is due in one year. What is Dewyco's cost of capital for preferred stock?
Answer:
6%
Explanation:
some information is missing:
market price of preferred stock = $50
preferred stock dividend = $3
preferred stocks' cost of capital = preferred stock dividend / market price of preferred stock = $3 / $50 = 0.06 = 6%
Preferred stocks' cost of capital is not affected by any corporate tax rates, since preferred dividends are considered paid in capital and cannot be deducted as interests in the income statement.
True or False:
Transactions that result in significant investing and financing activities bu that do not involve cash are reported either directly after the statement of cash flows or in a note to the financial statements
Answer: True
Explanation:
Transactions that do not increase or decrease cash, but that result in significant investing and financing activities, are reported as noncash activities either directly after the cash flow statement or in a note to the financial statements.
It is true that In cash-flow statement, any transaction that do not involve cash are reported directly after the statement or in a note to the financial statements
Non-cash activities includes depreciation amortization, unrealized gain, unrealized loss etc
In accounting, non-cash investing or financing activities are required to be disclosed in the footnotes to the financial statements or within the cash flow statement.
Therefore, It is true that In cash-flow statement, any transaction that do not involve cash are reported directly after the statement or in a note to the financial statements.
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Wilson Dover Inc. The total value (debt plus equity) of Wilson Dover Inc. is $500 million and the face value of its 1-year coupon debt is $200 million. The volatility (σ) of Wilson Dover's total value is 0.60, and the risk-free rate is 5%. Assume that N(d1) = 0.9720 and N(d2) = 0.9050. Refer to the data for Wilson Dover Inc. What is the yield on Wilson Dover's debt? a. 7.05% b. 6.04% c. 6.70% d. 7.42% e. 6.36%
Answer:
7.42%
Explanation:
Value = 500 million
Amount of debt = 200 million
Time = year
Volatility = 6%
Risk free rate = 0.05
Nd1 = 0.9720
Nd2 = 0.9050
We have to calculate the value =
500 - (500 x 0.9720 - 200 x e^-0.05 x 0.9050)
= 186.17 million
We now calculate the yield
(200/186.17)^1 - 1
= 0.0742
= 7.42%
Identify whether the following paragraph uses a direct, indirect, or semi-indirect organizational pattern.
Due to budgetary restraints, departmental charge cards will no longer be valid for purchasing supplies. Departments will now order all supplies through central purchasing in Accounting. The new procedure for ordering supplies will be effective March 1. Improved company intranet functionality will make this process easy and effective. The electronic Supply Request Form can be found on the intranet in the "Orders" folder. Supply requests submitted via the intranet will be processed within 24 hours.
Put the sentences in order for a paragraph using an indirect organizational pattern.
After considering cost-saving proposals, such as eliminating the internal Parts Shipping division and tertiary quality control measures, the executive team determined that staff furloughs would have the least impact on company morale.
Due to projected second quarter revenue short falls, the CEO has decided to take precautionary measures to protect the long-term viability of the company.
A mandatory staff furlough will be instituted July 1–6 of this year.
Due to projected second quarter revenue short falls, the CEO has decided to take precautionary measures to protect the long-term viability of the company.
After considering cost-saving proposals, such as eliminating the internal Parts Shipping division and tertiary quality control measures, the executive team determined that staff furloughs would have the least impact on company morale.
A mandatory staff furlough will be instituted July 1–6 of this year.
Due to projected second quarter revenue short falls, the CEO has decided to take precautionary measures to protect the long-term viability of the company.
A mandatory staff furlough will be instituted July 1–6 of this year.
After considering cost-saving proposals, such as eliminating the internal Parts Shipping division and tertiary quality control measures, the executive team determined that staff furloughs would have the least impact on company morale.
Answer:
a. Identification as direct, indirect, or semi-indirect organizational patterns:
Direct organizational pattern
b. Putting sentences in order for a paragraph using an indirect organizational pattern:
Due to projected second quarter revenue shortfalls, the CEO has decided to take precautionary measures to protect the long-term viability of the company.
A mandatory staff furlough will be instituted July 1–6 of this year.
After considering cost-saving proposals, such as eliminating the internal Parts Shipping division and tertiary quality control measures, the executive team determined that staff furloughs would have the least impact on company morale.
Explanation:
Organizational paragraph patterns refer to how paragraphs are organized in order to deliver intended messages. The direct organizational pattern delivers the bad news first before giving reasons, and then closes on a positive note. The indirect pattern starts with a buffer, the reasons, then delivers the bad news, before finally closing on a positive note. The semi-indirect pattern is a mixture of the two.
If the IRS intends to close a Taxpayer Assistance Center, they must notify the public at least _____ days in advance of the closure date.
Answer: 90 days
Explanation:
The Internal Revenue Service is typically known as the revenue service of the federal government as it is in charge of tax collection and enforcing tax laws.
If the IRS intends to close a Taxpayer Assistance Center, they must notify the public at least 90 days in advance of the closure date.
"Industry A has 10 firms. The five largest firms have 21%, 20%, 19%, 18%, and 17% of the market. The remaining five firms each have 1% of the market. The four-firm concentration ratio for Industry A is 78%. What is the HHI for Industry A
Answer:
1820
Explanation:
The HHI is calculated by squaring the market share of each firm in the industry.
21% ²+ 20%² + 19%² + 18%² + 17%² + 1%² +1%² +1%² +1%² +1%² = 1820
In March, Coronado Company completes Jobs 10 and 11. Job 10 cost $29,900 and Job 11 $40,300. On March 31, Job 10 is sold to the customer for $40,300 in cash. Journalize the entries for the completion of the two jobs and the sale of Job 10. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Answer:
Mar. 31
Dr Finished Goods Inventory 70,200
Cr Work in Process 70,200
Mar. 31
Dr Cash 40,300
Cr Sales 40,300
Mar. 31
Dr Cost of Goods Sold 29,900
Cr Finish Goods in Inventory 29,900
Explanation:
Preparation of the Journal entries for the completion of the two jobs and the sale of Job 10
1.Based on the information given we were told that Job 10 cost the amount of $29,900 while Job 11 cost the amount of $40,300 , this means that the Journal entry will be:
Mar. 31
Dr Finished Goods Inventory 70,200
Cr Work in Process 70,200
($29,900 + 40,300)
(To record completion of jobs.)
2. Based on the information given we were told that On March 31, Job 10 was sold to the customer for the amount of $40,300 in cash, this means that the Journal entry will be
Mar. 31
Dr Cash 40,300
Cr Sales 40,300
(To record sale of job.)
3. Based on the information given we were told that the sales of Job 10 cost the amount of $29,900, this means that the transaction will be recorded as:
Mar. 31
Dr Cost of Goods Sold 29,900
Cr Finish Goods in Inventory 29,900
(To record cost of job.)
Discuss why Measuring relationship is relevant to outsourcing
Explanation:
Outsourcing initiatives are complex undertakings requiring careful management of the client/vendor relationship. While monitoring the vendor’s performance is a common practice, insight into the status of the ‘soft’ aspects of the relationship, such as trust, is often not available, although research highlights the social aspects as a critical success factor. However, monitoring the softer facets’ quality is difficult: Vendor managers track the status of the soft aspects, if at all, using survey tools among involved staff. This has shortcomings because it does not only capture subjective perceptions, but also interrupts the daily business of the participants. To develop a more objective instrument that collects data without interfering daily business, we draw on social network analysis. We suggest an approach that will eventually allow managers to monitor relationship quality in an efficient and objective way. The results suggest metrics to measure the soft factors of a relationship, such as trust and commitment.
Identify the type of cash flow activity for each of the following events (operating, investing, or financing): a. Redeemed bonds be. Issued preferred stock c. Paid cash dividends d. Net income e. Sold equipment f. Purchased treasury stock go. Purchased patents h. Purchased buildings i. Sold long-term investments j. Issued bonds k. Issued common stock
Answer is given below
Explanation:
type of cash flow activity
a. Redeemed bonds ---------------Fiancing
b Issued preferred stock -----------Fiancing
c. Paid cash dividends --------------Fiancing
d. Net income --------------------------Operating
e. Sold equipment --------------------Investing
f. Purchased treasury stock -------Fiancing
g. Purchased patents ----------------Investing
h. Purchased buildings -------------Investing
i. Sold long-term investments ----Investing
j. Issued bonds ------------------------Fiancing
k. Issued common stock -----------Fiancing
A firm is currently producing 3,000 units of output daily by employing 20 units of labor at a price of $100 per unit and 40 units of capital at a price of $40 per unit. The marginal product of the last unit of labor employed is 50, and the marginal product of the last unit of capital employed is 30. In order to minimize its production costs, the firm should do which of the following?
a. Employ more labor and less capital because the marginal product of labor is greater than the marginal product of capital.
b. Employ less labor and more capital because the firm is currently spending $2,000 on labor and only $1,600 on capital.
c. Employ more labor and less capital because the firm already employs 40 units of capital and only 20 units of labor.
d. Employ less labor and more capital because the marginal product per dollar spent on labor is less than the marginal product per dollar spent on capital.
e. Employ less labor and more capital because a unit of labor costs $100 while a unit of capital costs only $40.
Answer:
e. Employ less labor and more capital because a unit of labor costs $100 while a unit of capital costs only $40.
Explanation:
By employing less labor and more capital, the firm can produce the 3,000 units of daily output at lower production costs since 40 units of capital cost $40 per unit, than it can with 20 units of labor priced $100 per unit. Capital can, therefore, minimize the total production costs, as less labor is used. Capital resources are often in the form of equipment and technological advancement that make work easier, faster, and more efficient with the highest quality possible.
Based on the marginal products of labor and capital, the company should d. Employ less labor and more capital because the marginal product per dollar spent on labor is less than the marginal product per dollar spent on capital.
The company should invest more in the method of production that gives it more marginal product per unit.
Marginal product per unit of labor:
= Marginal product of labor / cost of labor
= 50 / 100
= 0.5 per unit
Marginal product per unit of capital:
= 30 / 40
= 0.75 per unit
Capital has more marginal product per unit and so should be invested in more than labor.
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you decided to get a summer job since you were 14 as a lifeguard. you have made 2000 each summer. you placed all your earning in your savings account each year. It's 5 years later and you want to determine how much interest you have made. use the calculator to determine this
Answer:
Determine of interest made by placing $2,000 earnings each summer in savings account each year:
Total Interest $1,265.95
at 4% interest per annum.
Explanation:
a) Data and Calculations:
1. Data:
Earnings each summer = $2,000
Period = 5 years
Interest Rate = 4%
2. Using online calculator:
V (Future Value) $11,265.95
PV (Present Value) $9,259.79
N (Number of Periods) 5.000
I/Y (Interest Rate) 4.000%
PMT (Periodic Payment) $2,000.00
Starting Investment $0.00
Total Principal $10,000.00
Total Interest $1,265.95
3. By placing all your earning in your savings account each year after 5 years, you will get an interest of $1,265.95 and a total future value of $11,265.95, having deposited $10,000 ($2,000 each for 5 years).
1. Chang Industries has 1,900 defective units of product that have already cost $13.90 each to produce. A salvage company will purchase the defective units as they are for $4.90 each. Chang's production manager reports that the defects can be corrected for $6.10 per unit, enabling them to be sold at their regular market price of $20.80. The incremental income or loss on reworking the units is:_______.
a. $18,620 income.
b. $30,210 income.
c. $27,930 income.
2. Poe Company is considering the purchase of new equipment costing $85,500. The projected net cash flows are $40,500 for the first two years and $35,500 for years three and four. The revenue is to be received at the end of each year. The machine has a useful life of 4 years and no salvage value. Poe requires a 10% return on its investments. The present value of an annuity of 1 and present value of an annuity for different periods is presented below. Compute the net present value of the machine.
Periods Present Value of 1 at 10% Present Value of anAnnuity of 1 at 10%
1 0.9091 0.9091
2 0.8264 1.7355
3 0.7513 2.4869
4 0.6830 3.1699
a. $(27,665).
b. $(14,857).
c. $27,665.
d. $35,709.
Answer:
1. $18620
2. $35709
Explanation:
1.we are required to find incremental loss.
= Defect(market price - price per unit - correction per unit)
Defect product = 900
Market price = 20.8
Price for each defect unit = 4.9
Price for defect correction = 6.1
1900(20.8-4.9-6.1)
= $18600
2. Present value of cash flow =
40500*0.9091 = 36818.55
40500*0.8264 = 33469.2
35500*0.7513 = 26671.15
35500*0.683 = 24246.5
Total = 121209
We subtract cost of new equipment from this value
121209-85500
= $35709
A disadvantage of bonds is: Group of answer choices Bonds require payment of periodic interest Bonds require payment of principal Bonds can decrease return on equity Bond payments can be burdensome when income and cash flow are low All of the above
Answer:
All of the above.
Explanation:
A bond can be defined as a debt or fixed investment security, in which a bondholder (investor or creditor) loans an amount of money to the bond issuer (government or corporations) for a specific period of time. The bond issuer are expected to return the principal (face value) at maturity with an agreed upon interest (coupon), which are paid at fixed intervals.
The disadvantages of bonds are listed below as;
1. Bonds require payment of periodic interest.
2. Bonds require payment of principal.
3. Bonds can decrease return on equity.
4. Bond payments can be burdensome when income and cash flow are low.
The following data is given for the Bahia Company: Budgeted production 1,049 units Actual production 971 units Materials: Standard price per pound $1.971 Standard pounds per completed unit 12 Actual pounds purchased and used in production 11,302 Actual price paid for materials $23,169 Labor: Standard hourly labor rate $15.00 per hour Standard hours allowed per completed unit 4.3 Actual labor hours worked 5,000.65 Actual total labor costs $76,260 Overhead: Actual and budgeted fixed overhead $1,014,000 Standard variable overhead rate $27.00 per standard labor hour Actual variable overhead costs $140,018 Overhead is applied on standard labor hours. The variable factory overhead controllable variance is a.$75,397.52 unfavorable b.$75,397.52 favorable c.$27,284.90 unfavorable d.$27,284.90 favorable
Answer:
c.$27,284.90 unfavorable
Explanation:
Standard variable overhead rate =$27.00
Standard hours allowed per completed unit =4.3
Actual production unit =971
Actual variable overhead costs =$140,018
Variable factory overhead controllable variance = (Standard variable overhead rate * Standard hours allowed per completed unit * Actual production unit) - Actual variable overhead costs
Variable factory overhead controllable variance = ($27 * 4.3 * 971) - $140,018
Variable factory overhead controllable variance = $112,733.1 - $140,018
Variable factory overhead controllable variance = $27,284.9 (Unfavorable)
Attributes of a company's competitive advantage, including land, capital, technological knowhow, and physical infrastructure, are known as:
Answer: Factor endowments
Explanation:
Factor endowment is amount of land, capital, labor, and entrepreneurship that is possessed by a country and which the country can use for production purpose.
Therefore, Attributes of a company's competitive advantage, including land, capital, technological knowhow, and physical infrastructure, are factor endowments.
Some towns limit the number of hours that liquor stores can sell alcohol on Sundays. This restriction could actually help liquor stores by
Answer: decreasing sales and increasing prices.
Explanation:
From the question, we are informed that some towns limit the number of hours that liquor stores can sell alcohol on Sundays. This restriction could actually help liquor stores reduce their sales and thereby lead to the increment of prices.
Since there has been a reduction I the number of hours, it means lesser alcohol will be sold and this can invariably lead to price increase.
At Jacobson Company, indirect labor is a variable cost that varies with direct labor-hours. Last month’s performance report showed that actual indirect labor cost totaled $5,780 for the month and that the associated spending variance was $245 Favorable. If 24,100 direct labor-hours were actually worked last month, then the flexible budget cost formula for indirect labor must be (per direct labor-hour):
Answer:
Flexible budget cost formula for indirect labor is $0.25 per DL hours
Explanation:
Flexible budget cost for indirect labor = Actual indirect labor cost + Associated spending variance
= $5,780 + $245
= $6,025
Flexible budget cost formula for indirect labor= Flexible budget cost for indirect labor / Direct labor-hours
= $6,025 / 24,100 DL hours
= $0.25 per DL hours