Answer:
Direct material price variance= $2,250 unfavorable
Direct material quantity variance= $1,250 favorable
Total variance= $1,000 unfavorable
Explanation:
To calculate the direct material price and quantity variance, we need to use the following formulas:
Direct material price variance= (standard price - actual price)*actual quantity
Direct material price variance= (2.5 - 3)*4,500
Direct material price variance= $2,250 unfavorable
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Standard quantity= 5*1,000= 5,000
Direct material quantity variance= (5,000 - 4,500)*2.5
Direct material quantity variance= $1,250 favorable
Total variance= 1,250 - 2,250= $1,000 unfavorable
Poulter Corporation will pay a dividend of $4.25 per share next year. The company pledges to increase its dividend by 6.75 percent per year, indefinitely. If you require a return of 10 percent on your investment, how much will you pay for the company’s stock today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
Current price of stock = $130.76(Approx).
Explanation:
Given:
Dividend paid = $4.25
Required return of return = 10%
Growth rate = 6.75%
Find:
Current price of stock = ?
Computation:
Current price of stock = D1 / (Required return of return - Growth rate)
Current price of stock = 4.25 / (0.1 - 0.0675)
Current price of stock = 4.25 / 0.0325
Current price of stock = $130.76(Approx).
Bow-Wow Company manufactures a product with a unit variable cost of $50 and a unit sales price of $88. Fixed manufacturing costs were $240,000 when 10,000 units were produced and sold. The company has a one-time opportunity to sell an additional 1,000 units at $70 each in a foreign market which would not affect its present sales. If the company has sufficient (excess) capacity to produce the additional units, acceptance of the special order would affect net income as follows:
a. Income would decrease by $4,000.
b. Income would increase by $4,000.
c. Income would increase by $70,000.
d. Income would increase by $20,000.
The risk-free rate is 2.3 percent and the market expected return is 12 percent. What is the expected return of a stock that has a beta of .87?
Answer:
The expected return = 10.739.
Explanation:
Given risk-free rate of return = 2.3 per cent
Market expected return = 12 percent
The value of beta = 0.87
Use the below formula to find the expected return.
The expected return = Risk free rate of return + Beta × (Market expected return - risk free rate of return)
The expected return = 2.3 + 0.87 (12 – 2.3)
The expected return = 10.739
Which of the following is not a good example of a marketing-related key success factor?
A. a well-known and well-respected brand name
B. breadth of product line and product selection
C. proven ability to improve production processes
D. clever advertising
E. courteous, personalized customer service
Answer: A. a well-known and well-respected brand name
Explanation:
Good examples of a marketing-related key success factor include breadth of product line and product selection, proven ability to improve production processes, clever advertising and courteous, personalized customer service.
Therefore, a well-known and well-respected brand name is not among the options for Marketing related success factors.
Torrid Romance Publishers has total receivables of $3,000, which represents 20 days’ sales. Total assets are $75,000. The firm’s operating profit margin is 5%. Find the firm's ROA and asset turnover ratio.
Answer:
Assets turnover ratio= 0.73
ROA= 3.65%
Explanation:
Torrid romance publishers have a total receivables of $3,000, it represents a 20 days sales
The total assets is $75,000
The operating profit margin is 5%
= 5/100
= 0.05
The first step is to calculate the total sales
= $3,000×365/20
= $3,000×18.25
= $54,750
The asset turnover ratio can be calculated as follows
= Total sales/Total assets
= $54,750/$75,000
= 0.73
The ROA can be calculated as follows
= Assets turnover ratio×operating profit margin
= 0.73×0.05
= 0.0365×100
= 3.65%
Hence the assets turnover ratio and ROA is 0.73 and 3.65% respectively.
An investment adviser with no place of business in the State is exempt from registration if it renders advice solely to employee benefit plans with assets of at least:
Answer:
$1,000,000
Explanation:
The investment adviser who doesn't have any place of business in the state and offers his services to only employee benefit plans with assets of assets at least $1,000,000 are exempt from registration. If the asset value exceeds this limit then the investment adviser will be required to register itself.
Martha, who is single, has a main home in Houston. In the current year, she rented it for 10 days, receiving $5,000 in rental income. Martha paid $20,000 in mortgage interest and $10,000 in real estate taxes on her home in the current year. What is the net effect of these items on her adjusted gross income g
Answer:
$5,000 increase
Explanation:
As Martha has the main home in Houston and in the current year she rented it for only 10 days, this means that house is rented for less than 14 days and will be still treated as her personal residence, therefore, no deduction will be available for Martha against her rental income. Martha's Adjusted gross income will be increased by an amount of $5,000.
Richards Corporation uses the FIFO method of process costing. The following information is available for October in its Fabricating Department: Units: Beginning Inventory: 80,000 units, 60% complete as to materials and 20% complete as to conversion. Units started and completed: 250,000. Units completed and transferred out: 330,000. Ending Inventory: 30,000 units, 40% complete as to materials and 10% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $37,200. Costs in beginning Work in Process - Conversion: $79,700. Costs incurred in October - Direct Materials: $646,800. Costs incurred in October - Conversion: $919,300. Calculate the cost per equivalent unit of conversion.
Answer:
$2.90 per equivalent unit of conversion
Explanation:
equivalent units of conversion (under FIFO) = [units in beginning inventory x ( 1 - previous conversion rate)] + units started and completed + (units in ending inventory x conversion rate) = [80,000 x (1 - 20%)] + 250,000 + (30,000 x 10%) = 64,000 + 250,000 + 3,000 = 317,000 units
cost per equivalent unit of conversion = total conversion costs / total equivalent units of conversion = $919,300 / 317,000 units = $2.90 per equivalent unit
The price of a stock call option is __________ correlated with the stock price and __________ correlated with the strike price. Group of answer choices negatively; positively not; not negatively; negatively positively; positively positively; negatively
Answer:
The answer is positively correlated with stock price and negatively correlated with strike price
Explanation:
The holder of a call option expects the price of the underlying asset(the stock) to increase for him to exercise the right while he also hopes the price of the strike price(exercise price) will be lower than the stock price. If this happens the holder (long) of the call option gains. So because of this, the price of stock call option is positively correlated with the price of the underlying (stock price) while it is negatively correlated with the strike price(exercise price).
Beer prices at major league baseball stadiums are usually much higher than prices at a bar or restaurant. This is mainly because
The question is incomplete:
Beer prices at major league baseball stadiums are usually much higher than prices at a bar or restaurant. This is mainly because
a. it costs the owners of the baseball teams more money to buy the beer from distributors
b. demand is much higher at a baseball game than at a bar
c. baseball team owners have market power and can change a higher price when they are the only sellers of beer
d. the government forces the owners of baseball teams to change price.
e. the owner's baseball teams are not profit maximizing
Answer:
c. baseball team owners have market power and can change a higher price when they are the only sellers of beer
Explanation:
The situation at the major league baseball stadiums is that the owner of the team is the only one that sells the beer which means that they have the power to establish the price they want as people won't have another option to buy the beer in the stadium and they will try to get as much benefits as possible by setting a high price. According to this, the answer is that this is mainly because baseball team owners have market power and can change a higher price when they are the only sellers of beer .
The other options are not right because the owners of the teams pay the same price for the beer as everyone else, the demand is not higher at the baseball game, the government doesn't regulate the prices and the owners are trying to get as much profits as possible.
After the initial offering, the bonds are trading in the secondary market at 105, while the stock is trading at $10. Which statements are TRUE?
Answer:
B I and IV
Explanation:
Each bond could be transformed into common stock at $10.50 par value. So the bond should be equivalent to the 95 shares that comes from
= $1,000 ÷ $10.50 per share
= 95 shares
Currently price of the bond is $1,050
Now each share price is
= $1,050 ÷ 95 shares
= $11.05
As the common stock is traded at $10 that represents the stock is less than parity and therefore there is no means to transform the shares
hence, B option is correct
Hannah is the owner of a party store. Last year, her total revenue was $145,000, her rent was $12,000, her labor costs were $65,000, and her overhead expenses were $15,000. If she could earn $53,000 working for another party store nearby, we know that her economic profit was
Answer:
$433,900
Explanation:
The computation of the capitalized cost of the land is shown below:-
Capitalized cost of the land = Purchase price + Demolition of building + Title insurance + Attorney fee + Property taxes covered during the period - Scrap value from the building
= $420,000 + $12,000 + $900 + ($3,000 - $500) - $1,500
= $420,000 + $12,000 + $900 + $2,500 - $1,500
= $435,400 - $1,500
= $433,900
Your friend asked you what a business cycle means. You tell them that a business cycle reflects changes in real GDP. Then you tell them that the stages of a business cycle in correct order are:
Answer:
Growth, Boom, Recession and the Slump
Explanation:
Growth, Boom, Recession and the Slump.
Some books include the recovery but it is just counted included in the growth.
HOPE THIS HELPED
You, as the team leader, were not aware of the concerns of the Marketing Department, although certain members of your team have known about the concerns for some time. Which symptom of Groupthink (Irving Janis) may your team be displaying
Answer:
Self-Appointed Mindguards
Explanation:
This is an incomplete information
Irving Janis identified eight symptoms of Groupthink: Illusion of Invulnerability, Belief of Inherent Morality of the Group, Collective Rationalization, Out-group Stereotypes, Self-Censorship, Illusion of Unanimity, Direct Pressure on Dissenters, and Self-Appointed Mindguards. You are leading a Decision Making Team and suspect that your team may be suffering from Groupthink. Identify which symptom your team may be displaying.Group of answer choices Self-Appointed Mindguards. Belief in Inherent Morality of the Group. Illusion of Unanimity. Self-Censorship.
The self-appointed mind guards refer to the actions where the company or community members or both secure their group that contains the contradicting views and decisions
here, in the given situation, as a team leader, you dont know the concerns but your team is known about the concerns
So this symptom reflects the self-appointed mind guards
Sam has contracted with Dave to purchase Dave's racing bike, with payment and delivery of the bicycle to be made 10 days after the contract was made. Three days later Sam hears that Dave is going to sell the bike to Gene in three days at a higher price. If Sam really wants the bike, what should he do? Multiple Choice Immediately seek injunctive relief. Immediately sue for specific performance. Immediately sue for compensatory damages. Immediately sue for consequential damages.
Answer: Immediately seek injunctive relief.
Explanation:
An injunctive relief is an order by the court stopping an action from taking place. From the question, we are told that Sam has contracted with Dave to buy Dave's racing bike, with payment and delivery of the bicycle to be made 10 days after the contract was made.
We are further told that three days later Sam hears that Dave is going to sell the bike to Gene in three days at a higher price. If Sam really wants the bike, he should seek injunctive relief. By doing so, the court will stop Dave from selling the bike to Gene.
Double West Suppliers (DWS) reported sales for the year of $400,000, all on credit. The average gross profit percentage was 35 percent on sales. Account balances follow:
Beginning Ending
Accounts receivable (net) $ 51,000 $ 61,000
Inventory 67,000 46,000
Required:
1. Compute the following turnover ratios. (Round your answers to 1 decimal place.)
2. By dividing 365 by your ratios from requirement 1, calculate the average days to collect receivables and the average days to sell inventory. (Use 365 days in a year. Do not round intermediate calculations. Round turnover ratio calculation and final answers to 1 decimal place.)
Answer:
1. Accounts Receivables Turnover Ratio = Net Credit Sales/Average Accounts Receivables = 400,000 / (51000 + 61000)/2
= 400,000/56,000
= 7.1 times
Inventory Turnover Ratio = Cost of Goods Sold/Average Inventory = (Sales-Gross Profit)/Average Inventory = (400,000 - 35% * 400,000) / (67000 + 46000)/2
=400,000 - 140,000 / 56,500
= 260,000 / 56,500
= 4.6 times
2. Average Days to Collect Receivables = 365/7.1 = 51.40 or 52 days
Average Days to Collect Inventory = 365/4.6 = 79.34 days
Systemic barriers to change occur because of conflicts between departments, conflicts arising from power relationships, and refusal to share information.
a. True
b. False
Answer:
a. True
Explanation:
This statement is true, as systemic barriers can occur in an organization whose information flow does not occur efficiently and effectively, which causes information noises that prevent departments or teams from receiving organizational information.
This barrier can be eliminated by establishing a more direct and integrated communication with all organizational sectors, in the form of announcements, murals, e-mail, etc.
Another way to solve this problem is by analyzing the design of the organizational structure and making adjustments if it is found that there are flaws that prevent the flow of information to flow normally.
Barry Cuda is considering the purchase of the following Builtrite bond: $1000 par, 3 1/4% coupon rate, 10 year maturity that is currently selling for $940. If Barry purchases this bond, what would his approximate yield to maturity be?
Answer:
Yield to Maturity = 3.97%
Explanation:
The yield to maturity is the discount rate that equates the price of the bond to the present value of its future cash flow receivable from it.
The yield on the bond can be determined as follows using the formula below:
YM = C + F-P/n) ÷ 1/2 (F+P)
YM-Yield to maturity-
C- annual coupon
F- Face Value
P- Current Price
DATA
Coupon = coupon rate × Nominal value = 1,000 × 3 1/4%= 32.5
Face Value = 1000
YM-?, C- 32.5, Face Value - 1,000, P-940
YM = (32.5+ (1000-940)/10) ÷ ( 1/2× (1000 + 940) )
YM = 0.0397 × 100 = 3.97%
Yield to Maturity = 3.97%
Salah’s net income for the year ended December 31, Year 2 was $191,000. Information from Salah’s comparative balance sheets is given below. Compute the cash paid for dividends during Year 2. At December 31 Year 2 Year 1 Common Stock, $5 par value $ 506,000 $ 455,400 Paid-in capital in excess of par 954,000 858,400 Retained earnings 694,000 587,400
Answer:
Cash Dividends - Year 2 = $84400
Explanation:
The net income of the business is usually appropriated or used for two purposes at the end of the year. It is either used to pay dividends or is retained in the business and is added to the retained earnings or both.
Thus, to calculate the dividends paid by the business in a particular year, we can calculate the change in retained earnings and deduct it from the net income.
Change in retained earnings = Ending balance of retained earnings - Beginning balance of retained earnings
Change in retained earnings = 694000 - 587400
Change in retained earnings = $106600
Thus, out of the net income of $191000, $106600 were transferred to retained earnings. So, the amount of dividends paid for the year is,
Cash Dividends - Year 2 = 191000 - 106600 = $84400
Sheffield Corp. budgeted costs for 45000 linear feet of block are: Fixed manufacturing costs$24000 per month Variable manufacturing costs$16 per linear foot Sheffield installed 30000 linear feet of block during March. How much is budgeted total manufacturing costs in March
Answer:
Manufacturing cost =$744,000
Explanation:
The total manufacturing cost is the sum of the variable manufacturing cost and the fixed manufacturing cost.
Manufacturing cost = variable cost + Fixed cost
This can be represent using the formula below
Y = bx + a
Y -Manufacturing cost
b- Variable cost per unit
a- Fixed cost
X- number of units
Y = (45,000× 16) + 24,000 = $744000
Budgeted Manufacturing cost =$744,000
Answer:
The answer is $504,000
Explanation:
Budgeted total manufacturing cost is the total variable cost and fixed cost the company had calculated for the production of a particular product.
Budgeted total manufacturing costs in March is:
(Variable manufacturing cost x Linear feet installed) + Fixed manufacturing cost
($16 x 30,000 linear feet) + $24,000
= $480,000 + $24,000
=$504,000
Improvements in labor productivity: A. affect the level of wages, but do not affect the rate of economic growth. B. affect the level of profit, but do not affect the rate of economic growth. C. contribute to economic growth. D. hinder economic growth, because they cause unemployment.
Answer:
C. contribute to economic growth
Explanation:
Economic growth is an increase in the the production of goods and services produced in an economy.
Improvements in labor productivity increases the output of labour and as a result contributes to economic growth.
Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows:
Sales in Units
April 54,000
May 75,000
June 94,000
July 82,000
The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-of-month inventory levels must equal 20% of the following month’s sales. The inventory at the end of March was 10,800 units. Required: Prepare a production budget for the second quarter; in your budget, show the number of units to be produced each month and for the quarter in total.
down under products Ltd.
prodcution budget
april may june other
budgeted unit sales
total needs
required production in units
Answer:
Results are below.
Explanation:
Giving the following information:
Sales in Units
April 54,000
May 75,000
June 94,000
July 82,000
Desired ending inventory= 20% of the following month’s sales.
The inventory at the end of March was 10,800 units.
To calculate the production for each month, we need to use the following formula:
Production= sales + desired ending inventory - beginning inventory
April:
Sales= 54,000
Ending inventory= 75,000*0.2= 15,000
Beginning inventory= (10,800)
Total= 58,200 units
May:
Sales= 75,000
Ending inventory= 94,000*0.2= 18,800
Beginning inventory= (15,000)
Total= 78,800 units
June:
Sales= 94,000
Ending inventory= 82,000*0.2= 16,400
Beginning inventory= (18,800)
Total= 91,600 units
Total for the quarter= 228,600 units
In the above case, Sales in Units in the month of April is 54,000, in the month of May is 75,000, in the month of June is 94,000 and in the month of July is 82,000.
What is sales?A sale is defined as a transaction between the parties in which the purchaser acquires goods, services, or assets in return for money. In some cases, other assets are pay off to a seller.
Computation of production:
According to the available information,
Desirable closing inventory= 20% of the following month’s sales.
The inventory at the end of March was 10,800 units.
To calculate the production in each month, the formula is:
[tex]\text{Production= Sales + Desired Ending Inventory - Beginning Inventory}[/tex]
Production in the month of April:
According to the given information,
Sales= 54,000
Ending inventory:
[tex]=75,000\times \dfrac{20}{100}\\= 15,000[/tex]
Beginning inventory= 10,800
Now, apply the given values in the above formula:
[tex]\text{Production= Sales + Desired Ending Inventory - Beginning Inventory}\\\\\text{Production} =54,000+15,000-10,800\\\\\text{Production}=58,200\text{Units}[/tex]
Production in the month of May:
Sales= 75,000
Ending inventory:
[tex]=94,000\times \frac{20}{100}\\\\= 18,800[/tex]
Beginning inventory= 15,000
Now, apply the given values in the above formula:
[tex]\text{Production= Sales + Desired Ending Inventory - Beginning Inventory}\\\\\text{Production} =75,000+18,800-15,000\\\\\text{Production}=78,800\text{Units}[/tex]
Production in the month of June:
Sales= 94,000
Ending inventory:
[tex]872,000\times\dfrac{20}{100}= 16,400[/tex]
Beginning inventory= 18,800
Now, apply the given values in the above formula:
[tex]\text{Production= Sales + Desired Ending Inventory - Beginning Inventory}\\\\\text{Production} =94,000+16,400-18,800\\\\\text{Production}=91,600\text{Units}[/tex]
Therefore, the Total for the quarter :
[tex]=\text{May's Production + June's Production+Juily's Production}\\\\=58,200+78,800+91,600 \text{Units}\\= 228,600 \text{Units}[/tex]
Learn more about sales, refer to:
https://brainly.com/question/16911495
Crane Corporation has 2,000 shares of stock outstanding. It redeems 500 shares for $370,000 when it has paid-in capital of $300,000 and E & P of $1,200,000. The redemption qualifies for sale or exchange treatment for the shareholder. Crane incurred $13,000 of accounting and legal fees in connection with the redemption transaction and $18,500 of interest expense on debt incurred to finance the redemption. What is the effect of the distribution on Crane Corporation's E & P? Also, what is the proper tax treatment of the redemption expenditures?
Answer:
E&P $1,200,000 × 25%= $300,000 reduction
Crane Corporation would reduce its E & P in the amount of $300,000 as a result of the redemption.
This represents a 25% decrease in the amount of the E & P corresponding to the 25% stock redemption.
When a stock redemption results in sale or exchange treatment for the shareholder, the E & P account of a corporation is reduced in an amount not in excess of the ratable share of the E & P of the distributing corporation attributable to the stock redeemed.
As such, none of the expense of $13,000 of accounting and legal fees or other is deductible.
Turnbull Corp. is in the process of constructing a new plant at a cost of $30 million. It expects the project to generate cash flows of $13,000,000, $23,000,000, and 29,000,000 over the next three years. The cost of capital is 20 percent. What is the internal rate of return that Turnbull can earn on this project? (Do not round intermediate computations. Round final answer to the nearest percent.)
Answer:
44%
Explanation:
Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested
Internal rate of return can be determined using a financial calculator
Cash flow in year 0 = $-30 million
Cash flow in year 1 = $13 million
Cash flow in year 2 = $23 million
Cash flow in year 3 = $29 million
IRR = 44%
To find the IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
If the Fed carries out an open market operation and buys U.S. government securities, the federal funds rate ________ and the quantity of reserves ________.
Answer:
decreases, increases
Explanation:
An open market operation where the government buys securities increases the money supply so the Federal funds rates increases. Because of the increase in money supply, the reserves held by banks would increase.
the federal funds rate is the interest rate at which banks can borrow or lend excess reserves overnight
The NYSE Specialist (DMM) and Floor Trader system is the model for trading used by which of the following markets?
I NASDAQ
II AMEX (NYSE American)
III PHLX
IV BATS
a. I and III
b. I and IV
c. II and III
d. II and IV
Answer:
c. II and III
Explanation:
The New York Stock Exchange, NYSE Specialist (DMM) and Floor Trader system is the model for trading used by American Stock Exchange, AMEX (NYSE American) and Philadelphia Stock Exchange (PHLX).
However, National Association of Securities Dealers Automated Quotations (NASDAQ) isn't modeled after the NYSE Specialist (DMM) and Floor Trader system, rather it is based on an all electronic market. Also, Better Alternative Trading System (BATS) started as an Electronic Communications Network (ECN) and as such is typically an all electronic market, which has transformed magnificently into an exchange according to the Securities and Exchange Commission (SEC).
Hence, the American Stock Exchange, AMEX (NYSE American) and Philadelphia Stock Exchange (PHLX) uses a designated market maker (DMM) and Floor Trader system just like the New York Stock Exchange as their primary market maker.
Sand Key Development Company estimates that it will generate an operating income of $7.25 million. Which financing option should Sand Key use?
Answer: debt financing option
Explanation:
Debt financing is a way by which an economic agent such as the individual, firm or the government gets enough money in order to meet a particular need.
Debt financing can be through loans from family and friends, personal loans, bank loans, credit cards etc. Since Sand Key Development Company estimates that it will generate an operating income of $7.25 million, the company can use debt financing.
Eakins Inc.'s common stock currently sells for $15.00 per share, the company expects to earn $2.75 per share during the current year, its expected payout ratio is 70%, and its expected constant growth rate is 6.00%. New stock can be sold to the public at the current price, but a flotation cost of 8% would be incurred. By how much would the cost of new stock exceed the cost of retained earnings
Answer:
1.12%
Explanation:
By how much would the cost of new stock exceed the cost of retained earnings = Cost of new equity - Cost of retained earnings
Cost of retained earnings = ((2.75 * 70%) / 15) + 6.00%
Cost of retained earnings = ((2.75 * 0.7) / 15) + 0.06
Cost of retained earnings = 0.1283 + 0.06
Cost of retained earnings =0.1883
Cost of retained earnings = 18.83%
Cost of new equity= ((2.75 * 70%) / (15 * (1 - 8%) ) + 6.00%
Cost of new equity= 19.95%
Hence, Cost of new equity - Cost of retained earnings
= 19.95% - 18.83%
= 1.12%
If an applicant is not hired because the applicant has previously claimed overtime which they were owed, they are likely to be covered under the
Answer: Fair Labor Standards Act
Explanation:
The Fair Labor Act which is enforced by the US Department of Labor is meant to govern issues of remuneration in labor such as minimum wages and overtime pay. This Act applies to private workers at the Federal, State and Local levels of Government.
This Act stipulates that Overtime should be paid to an employee with certain conditions attached and if those conditions are fulfilled, the company ought to pay the employee that Overtime. If the Employee demands their overtime and is subsequently treated unfairly in hiring, the Department of Labor will be able to protect the Employee under this Act.
A midyear burst of minimum-wage increases starts on July 1
On July 1, 2016, the minimum wage will increase in 14 U.S. cities, states and counties, and in the District of Columbia. In SanFrancisco, the minimum wage will rise to $13.00 by 2018.
Source: The Wall Street Journal, July 1, 2016
The rise in the minimum wage _______.
A. increases aggregate supply because when workers receive a higher wage rate, they work harder
B. decreases aggregate supply because firms' costs increase
C. creates a movement up along the aggregate supply curve because the price level rises
D. does not change aggregate supply because most people earn more than the minimum wage
Answer: B. decreases aggregate supply because firms' costs increase
Explanation:
The rise in the the minimum wage rate raise the production cost .
This tends to shift the aggregate supply curve leftwards because the profit margins of firm will decrease and that tends to decrease the production.( at each unite of production.)
Hence, the rise in the minimum wage decreases aggregate supply because firms' costs increase .
Therefore , the correct option is 'B'.