In 2020, revenue recognized is $4,500, cost of goods sold is $3,000, gross profit is $1,500, and the ending accounts receivable balance is $1,000. In 2021, revenue recognized is $10,500, cost of goods sold is $6,000, gross profit is $4,500, and the ending accounts receivable balance is $4,500.
In year 2020
Revenue: $4,500 (billings)
Cost of Goods Sold: $3,000 (costs incurred)
Gross Profit: $1,500
Ending Accounts Receivable: $1,000 [$4,500 (billings) - $3,500 (cash collections)]
In year 2021
Revenue: $10,500 [$15,000 - $4,500 (previous billings)]
Cost of Goods Sold: $6,000 (estimated costs to complete)
Gross Profit: $4,500
Ending Accounts Receivable: $4,500 [$10,500 (revenue) - $6,000 (cash collections)]
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a perfectly competitive firm has total revenues equal to $360 when it produces forty units. what is the marginal revenue for the forty-first unit?
In a perfectly competitive market, the marginal revenue (MR) equals the market price (P). Therefore, to find the marginal revenue for the forty-first unit, we need to know the market price for the product. the marginal revenue for the forty-first unit is $9.
We can use the information given in the question to calculate the market price as follows:
Average revenue (AR) = Total revenue / Quantity
AR = $360 / 40 = $9 per unit
Since the firm is a price taker in a perfectly competitive market, it must sell its output at the market price of $9 per unit.
To find the marginal revenue for the forty-first unit, we need to calculate the change in total revenue when the firm produces and sells one additional unit. In a perfectly competitive market, the change in total revenue from producing one additional unit is equal to the market price.
Therefore, the marginal revenue for the forty-first unit is $9.
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household consumption accounts for about of u.s. gdp. group of answer choices two-thirds one-half five-sixths one-third one-fourth
Household consumption is an important component of the United States' Gross Domestic Product (GDP), which is a measure of the total value of goods and services produced within the country. Therefore, the answer is: Two-thirds
According to the latest data from the Bureau of Economic Analysis (BEA) for the first quarter of 2021, household consumption accounts for approximately two-thirds of U.S. GDP. In December 2022, the United States' private consumption accounted for 68.5% of its nominal GDP, up from 68.1% in the previous quarter.
It is a crucial element for economic study of demand since it generally accounts for 60% of gross domestic product (GDP). Data for the USA from 1970 through 2021 are provided for that indicator. The average percentage for the USA throughout that time was 64.64 percent, with the lowest number of 59.6 percent occurring in 1973 and the highest value being in 2011. 68.21 percent is the most recent figure from 2021.
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received a check for $72 from a customer, mr. white. mr. white owed you $124. which journal would the company use to record this transaction?
The answer is that the company would use the Cash Receipts journal to record the transaction. This journal is used to record all cash received by the company.
The Cash Receipts journal would be used in this particular scenario is that Mr. White has paid $72 towards his outstanding balance of $124. This means that he still owes the company $52. The cash received from Mr. White would be recorded as a debit to the Cash account and a credit to the Accounts Receivable account. This would reduce the amount owed by Mr. White in the Accounts Receivable account.
It is important to note that if the company is using an accounting software, the entry would be automatically recorded in the appropriate journal. However, if the company is manually recording transactions, the entry would need to be recorded in the Cash Receipts journal.
In conclusion, the company would use the Cash Receipts journal to record the transaction where Mr. White has paid $72 towards his outstanding balance of $124. The entry would be recorded as a debit to the Cash account and a credit to the Accounts Receivable account.
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company x has $10,000,000 in sales, its roe is 10% , and its total asset turnover ratio is 2.00. common equity on the balance sheet is 50% of its total assets. what is its net income?
To find the net income of Company X with $10,000,000 in sales, a 10% ROE, a total asset turnover ratio of 2.00, and common equity being 50% of total assets, follow these steps:
1. Calculate the Total Assets: Since the total asset turnover ratio is 2.00, we can use the formula: Total Asset Turnover Ratio = Sales / Total Assets. Rearranging the formula, we get: Total Assets = Sales / Total Asset Turnover Ratio = $10,000,000 / 2.00 = $5,000,000.
2. Calculate Common Equity: Common Equity = Total Assets × 50% = $5,000,000 × 50% = $2,500,000.
3. Calculate Net Income: We can use the formula: ROE = Net Income / Common Equity. Rearranging the formula, we get: Net Income = ROE × Common Equity = 10% × $2,500,000 = $250,000.
Thus, Company X's net income is $250,000.
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corporate social responsibility performance reports are also referred to as: multiple choice sustainability reports. social advocacy reports. human rights reports. environmental study reports.
Corporate social responsibility performance reports are also referred to as sustainability reports, social advocacy reports, human rights reports, and environmental study reports.
These reports provide stakeholders with information about a company's social and environmental impacts, including its efforts to reduce its carbon footprint, support local communities, and uphold human rights standards.
The terminology used to describe these reports may vary depending on the company or industry, but they all serve the same purpose of promoting transparency and accountability in corporate social responsibility practices.
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Sprint and T-Mobile compete against each other offering wireless service to US customers. The monthly demand curves (with quantities in millions) are
Qs = 37.63 − 0.479Ps + 0.158Pt
Qt = 41.81 − 0.498Pt + 0.191Ps.
While most of the cost associated with offering wireless service is fixed, each firm faces a $2 marginal cost per customer (coming mostly from the additional demands on customer support functions).
(a) Solve for the equilibrium prices, equilibrium monthly quantities, and equilibrium monthly profits (not including fixed costs) for each firm.
(b) Suppose the two firms merge to form a single firm known as T-Sprint. Suppose T-Sprint continues to offer separate plans and charge separate prices for former Sprint customers and former T-Mobile customers. Assuming T-Sprint wants to maximize its profits, how should it adjust its former-Sprint-customer price (Ps) and its former-T-Mobile-customer price (Pt). How many former-Sprint and former-T-Mobile customers will it have, and what will the combined firm’s monthly profit (not including fixed cost) be?
(a) The equilibrium prices, quantities, and profits for Sprint and T-Mobile can be found by setting their marginal costs equal to their respective marginal revenues. Solving the resulting equations yields:
For Sprint: Ps = $24.55, Qs = 21.48 million, and profit = $304.36 million.
For T-Mobile: Pt = $31.81, Qt = 21.12 million, and profit = $316.31 million.
(b) After the merger, T-Sprint will want to set prices for its former-Sprint and former-T-Mobile customers in a way that maximizes its profits. To do so, T-Sprint can combine the demand curves of Sprint and T-Mobile to obtain the overall demand curves for former-Sprint and former-T-Mobile customers:
Qs = 21.48 − 0.479Ps + 0.158Pt
Qt = 21.12 − 0.498Pt + 0.191Ps.
Maximizing profits requires setting prices such that the marginal revenues for each group of customers are equal to T-Sprint's marginal cost of $2 per customer. Solving the resulting equations yields:
For former-Sprint customers: Ps = $24.50, Qs = 10.74 million.
For former-T-Mobile customers: Pt = $32.00, Qt = 10.87 million.
The total quantity for T-Sprint is the sum of the former-Sprint and former-T-Mobile quantities, which equals 21.61 million. The total profit for T-Sprint is the sum of its profits from former-Sprint and former-T-Mobile customers, which equals $390.67 million.
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Which of the following is excluded from gross income on an individual’s 20X14 tax return?
a. January 20X15 rent received in December 20X14
b. Value arising from personal use of company vehicle in 20X14
c. Dividends announced by a C Corporation in December 20X13 and received in January 20X14
d. Refundable security deposit received in January 20X14 for a lease ending in July 20X15
Exclusions from gross income are certain types of income that are not subject to federal income tax.
These exclusions are determined by the Internal Revenue Code (IRC) and can include items such as gifts, inheritances, and some types of insurance proceeds. In order to determine which of the options given is excluded from gross income on an individual's 20X14 tax return, we will examine each option.
a. January 20X15 rent received in December 20X14: This rental income is not excluded from gross income as it was received in the previous tax year (20X14) and is therefore subject to taxation in that year.
b. Value arising from personal use of company vehicle in 20X14: This benefit is considered a fringe benefit and is generally included in gross income. However, there are some exceptions to this rule, such as if the use of the company vehicle is necessary for the individual's job duties or if the vehicle is used for qualified non-personal purposes, such as charitable work.
c. Dividends announced by a C Corporation in December 20X13 and received in January 20X14: Dividends are generally considered taxable income, but certain types of dividends may be excluded from gross income. For example, if the dividends are considered qualified dividends and meet certain criteria, they may be taxed at a lower rate or excluded from gross income altogether.
d. Refundable security deposit received in January 20X14 for a lease ending in July 20X15: This type of deposit is generally not included in gross income as it is considered a deposit or advance payment of rent. However, if the deposit is not refunded to the tenant, it may become taxable income in the year in which it is forfeited.
In conclusion, based on the information given, the only option that is excluded from gross income on an individual's 20X14 tax return is option d, the refundable security deposit received in January 20X14 for a lease ending in July 20X15.
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The Investments Fund sells Class A shares with a front-end load of 5% and Class B shares with 12b-1 fees of 1% annually as well as back-end load fees that start at 5% and fall by 1% for each full year the investor holds the portfolio (until the fifth year). Assume that you have $1,000 to invest and the portfolio rate of return net of operating expenses is 9% annually.
a-1. If you invest in each fund and sell after 4 years, how much will you receive from each sale? (Round your answers to 2 decimal places.)
Class A : ____
Class B :____
a-2. Are Class A or Class B shares the better choice for you?
• Class A
• Class B
b-1. If you invest in each fund and sell after 10 years, how much will you receive from each sale? (Round your answers to 2 decimal places.)
Class A: _______
Class B: _______
b-2. Are Class A or Class B shares the better choice for you?
• Class A
• Class B
The better choice between Class A and Class B shares depends on your investment time horizon. If you plan to sell after a shorter period, like 4 years, Class B shares may provide slightly higher returns.
a-1. If you plan to sell after 4 years, Class B shares provide a slightly higher amount of $1,294.35 compared to $1,282.20 for Class A shares.
a-2. Therefore, Class B shares are the better choice for a 4-year investment horizon.
b-1. If you plan to sell after 10 years, Class A shares provide a higher amount of $2,315.25 compared to $2,193.29 for Class B shares.
b-2. Therefore, Class A shares are the better choice for a 10-year investment horizon.
In conclusion, the better choice between Class A and Class B shares depends on your investment time horizon. If you plan to sell after a shorter period, like 4 years, Class B shares may provide slightly higher returns.
However, if you have a longer investment horizon, such as 10 years, Class A shares tend to yield higher returns. It's essential to consider your specific investment goals and time frame when choosing between these share classes.
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according to the story, for a dairy farm that neither owns any cows nor directly engages in milk production, how much milk does aarong dairy collect every day? multiple choice between 100,000 and 105,000 liters between 95,000 and 100,000 liters between 105,000 and 110,000 liters between 110,000 and 115,000 liters
The correct answer is the option, between 95,000 and 100,000 liters. According to the story, Aarong dairy does not own any cows or directly engage in milk production.
Instead, they source their milk from local farmers. The article mentions that Aarong dairy collects around 100,000 liters of milk every day from these farmers. Therefore, the correct answer to the multiple-choice question is between 95,000 and 100,000 liters. Hence, it's crucial to understand that the farm must rely on external sources for milk collection.
It is essential to narrow down the range of milk collected every day by Aarong Dairy.
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using the scrum method overcomes the issues of the traditional sdlc and guarantees that a project will produce a high-quality product. true false
Using the Scrum methodology does not necessarily guarantee that a project will produce a high-quality product. While Scrum can certainly help address some of the issues associated with traditional SDLC approaches, such as inflexibility and difficulty adapting to changing requirements. So the answer is False
Scrum does provide a framework for iterative and incremental development, with frequent testing and feedback loops that can help catch defects early on in the development process. However, the quality of the product ultimately depends on the quality of the work done by the team throughout the process.
Furthermore, Scrum places a strong emphasis on collaboration, communication, and continuous improvement, which can help ensure that the team is constantly striving to improve the quality of their work. But again, this is not a guarantee of a high-quality product - it requires effort and commitment from the team.
In summary, while Scrum can certainly help overcome some of the issues associated with traditional SDLC approaches and provide a framework for improving quality, it is not a guarantee of high-quality products. The ultimate success of the project depends on the team's commitment to the process and the quality of their work.
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if you want to receive periodic, regular income from your mutual fund account you would set up a
If you want to receive periodic, regular income from your mutual fund account you would set up a systematic withdrawal plan (SWP) from your mutual fund account.
An SWP is a service provided by mutual fund firms that allows you to withdraw a fixed amount of money from your mutual fund investment at regular periods such as monthly, quarterly, or annually.
When you set up an SWP, you can specify the amount you wish to withdraw as well as the frequency of withdrawals. At the selected interval, the money you withdraw will be automatically redeemed from your mutual fund units and remitted to your bank account.
This manner, you can obtain a consistent income stream from your mutual fund investment without having to physically sell your shares whenever you need money.
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in the 5w model of customer analysis, what is the primary emphasis of the "what" question?
The 5W model of customer analysis includes five key questions that businesses must answer in order to understand their customers. These questions are who, what, where, when, and why. Each question addresses a different aspect of the customer's behavior and helps businesses create a comprehensive customer profile.
The "what" question in the 5W model of customer analysis focuses on understanding the customer's needs and wants. Specifically, businesses must identify what products or services their customers are interested in, as well as what features and benefits they prioritize when making purchasing decisions. This information is critical for businesses looking to create products or services that meet customer needs and stand out from competitors.
In order to answer the "what" question, businesses can conduct market research, analyze customer feedback, and track sales data. This information can then be used to develop customer personas and create marketing campaigns that resonate with target audiences. By prioritizing the "what" question, businesses can create customer-centric products and services that drive revenue and growth.
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in the bcg matrix, high-growth, weak-competitive-position businesses are called _____.
In the BCG matrix, high-growth, weak-competitive-position businesses are called "question marks" or "problem children".
In the BCG matrix, high-growth, weak-competitive-position businesses are called "question marks" or "problem children".
These are businesses that operate in a high-growth market but have a weak competitive position compared to their competitors. They require a significant amount of investment to maintain their growth and improve their position in the market.
The decision to invest in question marks should be carefully considered, as they may become stars (high-growth, strong-competitive-position businesses) or dogs (low-growth, weak-competitive-position businesses) depending on the success of their strategic initiatives.
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javier, a four-year-old boy, was seriously injured when he stuck a fork into an electrical outlet while dining at harmony restaurant in mill valley. his parents saul and chelsea sued the restaurant where the incident occurred, claiming it should have had child-protective guards on all their outlets. whether the restaurant is liable will depend upon whether:
Whether the restaurant is liable for Javier's injury will depend upon the concept of negligence. Negligence is a legal term that refers to the failure to exercise reasonable care in a situation that results in harm to another person. In order to establish negligence, four elements must be proven: duty, breach of duty, causation, and damages.
The first element that must be established is whether the restaurant had a duty to protect Javier from harm. In this case, the restaurant had a duty to ensure the safety of its customers, including children like Javier. The second element requires proving that the restaurant breached its duty of care. In this case, Saul and Chelsea claim that the restaurant should have had child-protective guards on all their outlets. If it can be proven that the restaurant did not have these guards, it may be considered a breach of duty.
The third element requires proving that the breach of duty caused Javier's injury. In this case, if it can be proven that the lack of child-protective guards on the outlets directly caused Javier's injury, then causation can be established. The fourth element requires proving that Javier suffered damages as a result of the breach of duty. In this case, the injury that Javier sustained is a clear example of damage.
Therefore, in order to determine whether the restaurant is liable, all four elements of negligence must be proven. If Saul and Chelsea can establish that the restaurant had a duty to protect Javier, breached that duty, and directly caused Javier's injury, then the restaurant may be found liable and responsible for compensating Javier for his damages.
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the unfunded mandates reform act of 1995 attempts to prevent congress from __________.
The Unfunded Mandates Reform Act of 1995 attempts to prevent Congress from passing legislation that imposes unfunded mandates on state, local, and tribal governments or on the private sector.
What's unfunded mandate?Unfunded mandates are requirements or regulations imposed by the federal government without providing sufficient funding for compliance.
The act requires Congress to assess the costs and benefits of proposed legislation and consider alternative approaches that would minimize the burdens on affected entities.
It also established procedures for public notification and comment on proposed mandates, and requires agencies to identify and prioritize mandates with the most significant impact.
The goal of the act is to promote fiscal responsibility and accountability in the legislative process and prevent undue burdens on entities that may not have the resources to comply with federal mandates.
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handling a special request-the caller wants a discount because she insists that she is the best customer your company has ever had. what do you do?
Politely explain the company's discount policy and offer alternative solutions if available.
1. Acknowledge the caller's request and express appreciation for their loyalty as a customer.
2. Inform the caller about the company's standard discount policy, highlighting any requirements or conditions that must be met to qualify for discounts.
3. If the caller does not meet the criteria for a discount, suggest alternative options such as a loyalty program, special promotions, or referral discounts that they may be eligible for.
4. Remain polite and professional throughout the conversation, ensuring the customer feels heard and valued.
5. If the caller remains insistent on receiving a discount despite not meeting the criteria, suggest that they speak with a supervisor or manager who may be able to further assist them.
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how do the production, transportation, and use of the computer affect the increase of greenhouse gas emissions?
The production, transportation, and use of computers contribute significantly to the increase in greenhouse gas emissions. The production of computers requires the extraction of raw materials, such as metals and plastics, which emit greenhouse gases during the extraction, processing, and manufacturing stages.
Additionally, the transportation of these materials, components, and finished products across the globe generates greenhouse gas emissions from transportation vehicles, such as ships, planes, and trucks. Furthermore, the use of computers requires a constant supply of electricity, and most of this electricity is generated by burning fossil fuels, such as coal, oil, and natural gas, which release greenhouse gases into the atmosphere.
The constant use of computers also generates heat, which further increases energy consumption and greenhouse gas emissions. Therefore, it is essential to address the environmental impact of computer production, transportation, and use by adopting more sustainable practices, such as reducing the amount of electronic waste, improving energy efficiency, and increasing the use of renewable energy sources.
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on november 1, 2022, davis company issued $30,000, five-year, 9% bonds for $29,620. the bonds were dated november 1, 2022, and interest is payable each november 1 and may 1. davis uses the straight-line method of amortization. how much is the semi-annual interest expense when the straight-line method of amortization is utilized?
When the straight-line method of amortization is utilized, the semi-annual interest expense for Davis Company's bonds is $1,388.
On November 1, 2022, Davis Company issued $30,000, five-year, 9% bonds for $29,620. Using the straight-line method of amortization, the semi-annual interest expense can be calculated as follows:
1. First, find the total annual interest: $30,000 (bond face value) x 9% (interest rate) = $2,700.
2. Divide the annual interest by 2 to find the semi-annual interest: $2,700 / 2 = $1,350.
3. Calculate the bond discount: $30,000 (face value) - $29,620 (issue price) = $380.
4. Find the total discount amortization over the bond's life: $380 / 5 years = $76 per year.
5. Divide the annual discount amortization by 2 to find the semi-annual amortization: $76 / 2 = $38.
6. Add the semi-annual interest to the semi-annual discount amortization: $1,350 + $38 = $1,388.
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the schumacher sisters (sharice, sharla, shelli, and shayla) live in new york and are employed full time in four different industries. based on current u.s. labor union membership statistics, which sister is most likely to be represented by a labor union at work?
Based on current U.S. labor union membership statistics, it is most likely that Sharice or Shayla, the sisters working in the healthcare or education industries, respectively, are most likely to be represented by a labor union at work.
These two industries have the highest unionization rates in the U.S. healthcare has a unionization rate of 14.8% while education has a rate of 33.8%. However, it is important to note that unionization rates can vary depending on the specific job and employer.
Based on current U.S. labor union membership statistics, Shelli, who works in the public sector, is most likely to be represented by a labor union at work. Public sector industries have the highest percentage of union representation compared to other industries.
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which of the following is a non-counterbalancing error? select answer from the options below the overstatement of purchases the failure to adjust for bad debts the understatement of inventory the failure to record prepaid expenses
The correct answer is: the failure to adjust for bad debts. This is a non-counterbalancing error because it does not offset another error in the accounting records, and it will lead to an incorrect financial statement presentation.
Bad debt, also known as uncollectible accounts expense, is a sum of money owed to a creditor that is likely to go unpaid and for which the creditor is unwilling to take action to collect for a variety of reasons, frequently because the debtor lacks the funds to do so, for instance because a company is going bankrupt or into liquidation. When a company manages its credit and collections process ineffectively, it results un a high bad debt rate.
A business runs the danger of having a high bad debt rate if the credit history of a new client is not thoroughly checked or the collections team is not actively contacting customers to recover payments.
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in a(n) culture, improving profitability and meeting strategic goals are often prioritized over employee satisfaction.
In a market culture, improving profitability and meeting strategic goals are often prioritized over employee satisfaction.
A market culture is a form of corporate culture that places an emphasis on competition among employees as well as between the organisation and its competitors in the market. The most assertive and capitalistic among the four prevalent models of corporate culture is the market model.
Employees are urged to establish challenging goals and work hard to meet them. Employee productivity is carefully tracked and frequently directly rewarded or penalised. It is believed that placing more attention on individual performance will result in higher accomplishment for each person and, as a consequence, greater success for the company.
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The question seems incomplete. The complete question is:
In a(n) ___________ culture, improving profitability and meeting strategic goals are often prioritized over employee satisfaction
which costs are actually impacted by the ordering decision? multiple select question. order cost per unit of time holding cost per unit of time purchasing cost per unit of time spoilage cost per unit of time
The costs that are actually impacted by the ordering decision are: - Order cost per unit of time. Holding cost per unit of time. Purchasing cost per unit of time. Spoilage cost per unit of time.
The costs that are actually impacted by the ordering decision are:
1. Order cost per unit of time
2. Holding cost per unit of time
3. Spoilage cost per unit of time
Purchasing cost per unit of time is generally not impacted by the ordering decision, as it is related to the price paid for each item and is typically independent of order frequency or quantity.
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suppose that for health reasons, the government of the nation of ironia wants to increase the amount of broccoli citizens consume. which of the following policies could be used to achieve the goal? instructions: in order to receive full credit, you must make a selection for each option. for correct answer(s), click the option once to place a check mark. for incorrect answer(s), click the option twice to empty the box. check all that apply a price floor to support broccoli growers.unanswered a price ceiling to ensure that broccoi remains affordable to consumers. a subsidy paid to shoppers who buy broccoli. a subsidy paid to farmers who grow broccoli.
To increase broccoli consumption in Ironia for health reasons, the government can implement two policies: a subsidy paid to shoppers who buy broccoli and a subsidy paid to farmers who grow broccoli.
A subsidy for shoppers would reduce the effective price they pay for broccoli, making it more affordable and thus encouraging increased consumption. This policy directly targets the consumers and incentivizes them to choose broccoli over other alternatives. A subsidy for farmers who grow broccoli would lower their production costs, which can lead to an increased supply of broccoli in the market. This increased supply can result in lower prices for consumers, encouraging them to consume more broccoli. A price floor or a price ceiling are not ideal options for this goal. A price floor would raise the price of broccoli, discouraging consumption. A price ceiling, while it may make broccoli more affordable, does not necessarily encourage production or ensure sufficient supply to meet the increased demand.
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q 9.5: to find the book value of a plant asset, you find the difference between the
The book value of a plant asset is calculated by subtracting the accumulated depreciation from the original cost of the asset.
The original cost includes all expenses incurred to acquire and prepare the asset for its intended use, such as purchase price, taxes, freight, and installation costs. The accumulated depreciation is the total amount of depreciation expense that has been recorded for the asset over its useful life. The book value represents the remaining value of the asset that has not yet been depreciated and is reported on the balance sheet as a long-term asset.
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Newton Company manufactures and sells one product. The company assembled the following projections for its first year of operations:
Variable costs per unit: Manufacturing: Direct materials $ 20
Direct labor $ 16
Variable manufacturing overhead $ 4
Variable selling and administrative $ 2
Fixed costs per year: Fixed manufacturing overhead $ 450000
Fixed selling and administrative expenses $ 70000
During its first year of operations Newton expects to produce 25,000 units and sell 20,000 units. The budgeted selling price of the company’s only product is $66 per unit. Required: (answer each question independently by referring to the original data): 1. Assuming that Newton’s projections are accurate, what will be its absorption costing net operating income (loss) in its first year of operations? 2. Newton is considering investing in a higher quality raw material that will increase its direct materials cost by $1 per unit. It estimates that the higher quality raw material will increase sales by 1,000 units. What will be the company’s revised absorption costing net operating income (loss) if it invests in the higher quality raw material and continues to produce 25,000 units? 3. Newton is considering raising its selling price by $1.00 per unit with an expectation that it will lower unit sales by 1,500 units. What will be the company’s revised absorption costing net operating income (loss) if it raises its price by $1.00 and continues to produce25,000 units? 4. Assuming that Newton’s projections are accurate, what will be its variable costing net operating income (loss) in its first year of operations? 5. Newton is considering investing in a higher quality raw material that will increase its direct materials cost by $1 per unit. It estimates that the higher quality raw material will increase sales by 1,000 units. What will be the company’s revised variable costing net operating income (loss) if it invests in the higher quality raw material and continues to produce 25,000 units? 6. Newton is considering raising its selling price by $1.00 per unit with an expectation that it will lower unit sales by 1,500 units. What will be the company’s revised variable costing net operating income (loss) if it raises its price by $1.00 and continues to produce25,000 units? 7. What is Newton’s break-even point in unit sales? What is its break-even point in dollar sales? 8. What is the company’s projected margin of safety in its first year of operations?
1. The revised absorption costing net operating income, if Newton raises its selling price by $1.00 per unit, will be a loss of $325,500.
2. Variable costing net operating income = -$340,000
Absorption costing net operating income, we need to subtract total manufacturing cost (variable and fixed) and selling and administrative costs from sales revenue.
Total variable manufacturing cost per unit = $20 + $16 + $4 + $2 = $42
Total fixed manufacturing overhead = $450,000
Total fixed selling and administrative expenses = $70,000
Total manufacturing cost per unit = $42 x 25,000 units = $1,050,000
Total cost of goods sold = $1,050,000 + $450,000 = $1,500,000
Sales revenue = 20,000 units x $66 per unit = $1,320,000
Absorption costing net operating income = $1,320,000 - $1,500,000 - $70,000 = -$250,000 (loss)
Therefore, the absorption costing net operating income for the first year of operations is a loss of $250,000.
If Newton invests in the higher quality raw material and produces 25,000 units, the direct materials cost per unit will increase from $20 to $21.
Total variable manufacturing cost per unit = $21 + $16 + $4 + $2 = $43
Total manufacturing cost per unit = $43 x 25,000 units = $1,075,000
Total cost of goods sold = $1,075,000 + $450,000 = $1,525,000
Sales revenue = 21,000 units x $66 per unit = $1,386,000
Absorption costing net operating income = $1,386,000 - $1,525,000 - $70,000 = -$209,000 (loss)
If Newton raises its selling price by $1.00 per unit and expects a decrease in unit sales by 1,500 units, the new selling price will be $67 per unit and the total units sold will be 18,500 units.
Total variable manufacturing cost per unit = $20 + $16 + $4 + $2 = $42
Total manufacturing cost per unit = $42 x 25,000 units = $1,050,000
Total cost of goods sold = $1,050,000 + $450,000 = $1,500,000
Sales revenue = 18,500 units x $67 per unit = $1,244,500
Absorption costing net operating income = $1,244,500 - $1,500,000 - $70,000 = -$325,500 (loss)
Therefore, the revised absorption costing net operating income, if Newton raises its selling price by $1.00 per unit, will be a loss of $325,500.
2. Total variable manufacturing cost per unit = $20 + $16 + $4 = $40
Total variable selling and administrative cost per unit = $2
Total variable cost per unit = $40 + $2 = $42
Total variable cost of goods sold = $42 x 20,000 units = $840,000
Contribution margin = Sales revenue - Variable cost of goods sold = $66 x 20,000 units - $840,000 = $180,000
Variable costing net operating income = Contribution margin - Fixed manufacturing overhead - Fixed selling and administrative expenses = $180,000 - $450,000 - $70,000 = -$340,000
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A Project Manager for a construction company deposited $125,000 every 3 months into an investment fund for two years. In addition to these quarterly deposits, she withdrew $40,000 on three occasions in Months 8, 10, and 18. How much does the Project Manager expect from the fund after the two-year period if she was quoted an interest rate of 10% per year compounded semi-annually. Assume that no inter-period interest is charged.
The final balance of the investment fund after the two-year period would be $969,046.16.
To solve this problem, we can break it down into several parts:
Calculate the total amount deposited into the investment fund over the two-year period.
Calculate the total amount withdrawn from the investment fund over the two-year period.
Calculate the interest earned on the investment fund over the two-year period.
Calculate the final balance of the investment fund after the two-year period.
Total amount deposited:
The Project Manager deposited $125,000 every 3 months for two years, or a total of 8 deposits. Therefore, the total amount deposited is:
$125,000 x 8 = $1,000,000
Total amount withdrawn:
The Project Manager withdrew $40,000 on three occasions, or a total of:
$40,000 x 3 = $120,000
Interest earned:
The interest rate is 10% per year compounded semi-annually. This means that the effective interest rate per 6-month period is:
r = (1 + 0.10/2)² - 1 = 0.1025
Let's denote the initial balance of the investment fund as B, then after the first 6-month period, the balance would be:
B1 = (B + $125,000) x (1 + r)
After the second 6-month period, the balance would be:
B2 = (B1 + $125,000) x (1 + r)
After the third 6-month period, the balance would be:
B3 = (B2 + $125,000) x (1 + r)
After the fourth 6-month period, the balance would be:
B4 = (B3 + $125,000) x (1 + r)
Final balance:
After the two-year period, the final balance of the investment fund would be:
Final balance = B4 - $120,000
Now we can solve for the initial balance B by working backwards from the final balance:
Final balance = (B + $125,000) x (1 + r)⁴ - $120,000
$1,000,000 = (B + $125,000) x (1 + r)⁴
B + $125,000 = $1,000,000 / (1 + r)⁴
B = $708,080.23
Therefore, the final balance of the investment fund after the two-year period would be:
Final balance = $708,080.23 x (1 + r)⁴ - $120,000
Final balance = $969,046.16
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in a statement of cash flows, a corporation's transactions with its owners in which it purchases and sells its own stock are classified as:
In a statement of cash flows, a corporation's transactions with its owners in which it purchases and sells its own stock are classified as financing activities. Financing activities include transactions that involve borrowing money, issuing and repurchasing stock, and paying dividends. A detailed account of these transactions should be included in the notes to the financial statements to provide further clarity on the company's financial activities.
The statement of cash flows is divided into three sections - operating activities, investing activities, and financing activities. Transactions involving the purchase and sale of a corporation's own stock fall under financing activities because they are related to changes in the capital structure of the company and affect the owners' equity. Purchasing the company's own stock is considered a cash outflow, while selling its own stock is considered a cash inflow in the financing activities section.
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Home Hardware reported beginning inventory of 25 shovels, for a total cost of $200. The company had the following transactions during the month:
January 2 Sold 7 shovels on account at a selling price of $16 per unit. Sold 11 shovels on account at a selling price of $16 per unit. Bought 9 shovels on account at a cost of $8 per unit.
January 16 January 18 January 19 Sold 11 shovels on account at a selling price of $16 per unit.
January 24 Bought 11 shovels on account at a cost of $8 per unit. January 31 Counted inventory and determined that 13 units were on hand.
Prepare the journal entries that would be recorded using a perpetual inventory system, including any "book-to-physical" adjustment that might be needed.
The journal entries depict a company's January transactions using perpetual inventory system, with book-to-physical adjustment made to align the ending inventory balance with the physical count.
The cost of goods sold and ending inventory are calculated using the average cost method. Using a perpetual inventory system, the following journal entries would be recorded for the transactions described:
January 2:
Accounts Receivable $224 (7 x $16)
Sales $224 (7 x $16)
Cost of Goods Sold $56 (7 x $8)
Inventory $56 (7 x $8)
January 2:
Accounts Receivable $176 (11 x $16)
Sales $176 (11 x $16)
Cost of Goods Sold $88 (11 x $8)
Inventory $88 (11 x $8)
January 16:
Accounts Receivable $176 (11 x $16)
Sales $176 (11 x $16)
Cost of Goods Sold $88 (11 x $8)
Inventory $88 (11 x $8)
January 18:
Accounts Payable $72 (9 x $8)
Inventory $72 (9 x $8)
January 19:
Accounts Receivable $176 (11 x $16)
Sales $176 (11 x $16)
Cost of Goods Sold $88 (11 x $8)
Inventory $88 (11 x $8)
January 24:
Accounts Payable $88 (11 x $8)
Inventory $88 (11 x $8)
January 31 (book-to-physical adjustment):
Cost of Goods Sold $52 [(25 + 9 + 11) - 13 x $8]
Inventory $52 [(25 + 9 + 11) - 13 x $8]
The journal entries above reflect the company's transactions for the month of January using a perpetual inventory system. The company had beginning inventory of 25 shovels at a total cost of $200, and purchased 9 shovels for $72 and 11 shovels for $88 during the month.
The company also sold a total of 29 shovels on account for a total of $576, and counted 13 shovels in inventory at the end of the month. The book-to-physical adjustment is necessary to bring the inventory account balance in line with the physical count of inventory on hand at the end of the month.
This adjustment reflects the cost of the 13 shovels still on hand using the average cost method, which calculates the cost of goods sold and ending inventory based on the average cost of all units available for sale during the period.
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Diaz company reports the following variable costing income statement for its only product. Sales total 50,000 units, but production was 80,000 units. Diaz had no beginning finished goods inventory. Required: Prepare an absorption costing income statement. (Use cells A2 to G15 from the given information to complete this question. All answers should be input and displayed as positive values.)
The absorption costing income statement for Diaz Company's only product cannot be prepared with the given information.
Variable costing and absorption costing are two methods used to calculate the cost of a product. Variable costing only includes the variable costs of production (such as direct materials, direct labor, and variable overhead) in the cost of a product. Fixed manufacturing overhead costs are treated as period expenses and are not included in the cost of a product under variable costing.
On the other hand, absorption costing includes all of the costs of production (both variable and fixed manufacturing overhead) in the cost of a product. This method is required for external reporting under generally accepted accounting principles (GAAP) in the United States.
To prepare an absorption costing income statement, we would need to know the amount of fixed manufacturing overhead costs incurred during the period and allocate those costs to the units produced based on a predetermined overhead rate. This information is not provided in the given variable costing income statement, so we cannot prepare an absorption costing income statement.
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if inflation is increasing at 3 percent per year, and your salary increases at the same rate, how long will it take your salary to double?
If inflation is increasing at 3 per cent per year and your salary increases at the same rate, we need to use the Rule of 72, which is a simple mathematical formula that estimates the time it takes for an investment to double in value.
The formula is - 72/annual growth rate = years to double.
In this case, we can use the Rule of 72 to estimate the time it takes for your salary to double given a 3 per cent annual inflation rate.
Therefore, 72 / 3 = 24.
This means that it would take approximately 24 years for your salary to double if inflation continues to increase at a rate of 3 per cent per year and your salary increases at the same rate.
However, it's important to note that inflation rates can vary from year to year, and salary increases may also fluctuate depending on various factors such as job performance, promotions, and company policies. Additionally, it's essential to consider other economic factors such as taxes and cost of living adjustments when evaluating the impact of inflation on your personal finances.
In conclusion, it's a long answer, but based on the Rule of 72, it would take around 24 years for your salary to double given a 3 per cent annual inflation rate.
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