Answer:
$130,000
Explanation:
Calculation for the opportunity cost for four years of college
The first step is to calculate for the cost of education per year
Using this formula
Cost of education per year =Tuition+Text book +Room and board
Let plug in the formula
Cost of education per year =$10,000+$2,500+$12,000
=$24,500
Second step is to calculate the return in a situation were we decided not to go to college
$20,000-$12,000=$8,000
The last step is to calculate for the opportunity cost for 4 years of college:
Using this formula
Opportunity cost =Cost of education per year+ Return * Numbers of year
Where,
Cost of education per year=$24,500
Return =$8,000
Numbers of years =4
Let plug in the Formula
Opportunity cost =($24,500+$8,000)*4
Opportunity cost =$32,500*4
Opportunity cost =$130,000
Therefore the opportunity cost for four years of college will be $130,000
Your company assembles five different models of a motor scooter that is sold in specialty stores in the United States. The company uses the same engine for all five models. You have been given the assignment of choosing a supplier for these engines for the coming year. Due to the size of your warehouse and other administrative restrictions, you must order the engines in lot sizes of 1,100 each. Because of the unique characteristics of the engine, special tooling is needed during the manufacturing process for which you agree to reimburse the supplier. Your assistant has obtained quotes from two reliable engine suppliers and you need to decide which to use. The following data have been collected:
Requirements (annual forecast) 13,200 units
Weight per engine 25 pounds
Order processing cost $230 per order
Inventory carry cost 20 percent of the average value of inventory per year
Note: Assume that half of lot size is in inventory on average (1,100/2 = 550 units).
Two qualified suppliers have submitted the following quotations:
ORDER QUANTITY SUPPLIER 1 SUPPLIER 2
UNIT PRICE UNIT PRICE
1 to 1,499 units/order $ 553 $ 552
1,500 to 2,999 units/order 551 552
3,000 + units/order 543 542
Tooling costs $ 28,300 $ 24,400
Distance 120 miles 100 miles
Your assistant has obtained the following freight rates from your carrier:
Truckload (42,000 lbs. each load): $0.80 per ton-mile
Less-than-truckload: $1.20 per ton-mile
Note: Per ton-mile = 2,000 lbs. per mile.
a-1.Calculate the total cost for each supplier. (Round your answers to the nearest whole number.)
a-2. Which supplier would you select?
b. If you could move the lot size up to ship in truckload quantities, calculate the total cost for each supplier.
Answer:
A)
Sup 1 $7,415,250
Sup 2 $7,394,080
I will pick supplier 2 as their total cost is lower.
With the assumption of point b:
Supplier 1 $ 7,412,612
Supplier 2 $ 7,419,296
Explanation:
We must use the values for 1 to 1,499 units as we are constrained to a maximum of 1,100 lot size.
Weight of the lot:
1,100 x 25 pounds = 27,500 we do not achieve truckload
So we use the 1.20 per ton-mile
27,500 / 2,000 = 13.75 tons
13.75 tons x $1.20 each x 100 miles x 12 per year = $23,760
13.75 tons x $1.20 each x 120 miles x 12 per year = $19,800
Order cost $230 x 12 per year = $ 2,760
[tex]\left[\begin{array}{cccc}&$Supplier 1&$Supplier 2&$Differential\\$Demand&13200&13200&0\\$Unit Cost&553&552&-1\\$Goods cost&7299600&7286400&-13200\\$Tooling Cost&28300&24400&-3900\\$Truckload&23760&19800&-3960\\$Order Cost&2760&2760&0\\$Holding Cost&60830&60720&-110\\$Total Inventory Cost&7415250&7394080&-21170\\\end{array}\right][/tex]
Truckload: 42,000 / 25 = 1,680 units
new logistic cost:
13,200 / 1,680 = 7.85
This will mean 7 full travels and then another travel with less than full-load with As we cannot send "0.85" of a full load truck
13,200 - 1,680 x 7 = 1,440 units
Logistic cost:
42,000 / 2,000 x $0.80 each x 100 miles x 7 travels
+ 1,440 x 25 / 2000 x $1.20 each x 100 miles = 13920
42,000 / 2,000 x $0.80 each x 120 miles x 7 travels
+ 1,440 x 25 / 2000 x $1.20 each x 120 miles = 16,704
Order Cost: 8 orders x 230 = $1,840
Holding Cost: 1,680 untis / 2 x $551 or $552 x 20%
[tex]\left[\begin{array}{cccc}&Supplier 1&Supplier 2&Differential\\$Demand&13200&13200&0\\$Unit Cost&551&552&1\\$Goods cost&7273200&7286400&13200\\$Tooling Cost&28300&24400&-3900\\$logistic cost&16704&13920&-2784\\$Order Cost&1840&1840&0\\$Holding Cost&92568&92736&168\\$Total Inventory Cost&7412612&7419296&6684\\\end{array}\right][/tex]
Sunland Company reported the following information for 2016: October November December Budgeted sales $1300000 $1200000 $1540000 All sales are on credit. Customer amounts on account are collected 50% in the month of sale and 50% in the following month. How much cash will Sunland receive in November?
Answer:
Total cash receipts - November = $1250000
Explanation:
The credit sales are collected for in such a manner that the 50% amount of this month's sale and the 50% amount of previous month's sales are collected in the correct month. Thus, when calculating the cash receipts for November, we know that the 50% of collections will be for October's sales and the 50% of collections will be from the November's sales.
Cash receipts in November:
From October's sales = 1300000 * 0.5 = $650000
From November's sales = 1200000 * 0.5 = $60000
Total cash receipts - November = 650000 + 600000
Total cash receipts - November = $1250000
1. Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $84,200. The machine's useful life is estimated at 10 years, or 386,000 units of product, with a $7,000 salvage value. During its second year, the machine produces 32,600 units of product. Determine the machine's second-year depreciation and year end book value under the straight-line method.
2. Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $84,200. The machine's useful life is estimated at 10 years, or 386,000 units of product, with a $7,000 salvage value. During its second year, the machine produces 32,600 units of product. Determine the machine's second-year depreciation using the double-declining-balance method.
Answer:
1) Determine the machine's second-year depreciation and year end book value under the straight-line method.
depreciation expense per year = (purchase cost - salvage value) / useful life
depreciation expense per year = ($84,200 - $7,000) / 10 = $7,720
book value at the end of year 2 = $84,200 - ($7,720 x 2) = $68,760
2) Determine the machine's second-year depreciation using the double-declining-balance method.
depreciation year 1 = 2 x 1/10 x $84,200 = $16,840
depreciation year 2 = 2 x 1/10 x $67,360 = $13,472
book value at end of year 2 = $67,360 - $13,472 = $53,888
Researchers often are particularly interested in the subset of a market that contributes most to sales (for example, heavy beer drinkers or large-volume retailers). What type of sampling might be best to use with such a subset? Why?
Answer:
1122
Explanation:
Stratified Sampling is the type of sampling might be best to use with such a subset.
What is Stratified Sampling?In stratified sampling, respondents are divided into groupings known as strata based on shared traits. A different probability sampling technique is used to randomly sample each subgroup once it has been divided.
When a population has a variety of subgroups, stratified sampling is useful to ensure that every group is represented in the sample. Mere random sample and systematic sampling might not be able to fully represent all of these groupings, especially the relatively uncommon ones.
However, proportional stratified random sampling, where a population is divided into strata and a random sample is subsequently drawn from each in proportion to its size, is arguably the most prevalent variety. For instance, if the population as a whole has 60% females and 40% males.
Thus, Stratified Sampling.
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Which of the following is a characteristic of a firm’s optimal dividend policy? It maximizes the firm’s stock price. It maximizes the firm’s return on equity. It maximizes the firm’s earnings per share. It maximizes the firm’s total assets.
Answer:
It maximizes the firm’s stock price.
Explanation:
The correct answer is “it maximizes the firm’s stock price” because the optimal dividend policy allows the variable risk parameters and it maximizes the firm’s value. Moreover, the dividend policy attracts the shareholders and it maintains the firm’s or the company’s worth in the market. Therefore, the optimal payment of dividend increases or maximizes the stock price.
If oligopolistic firms banded together with the intention of acting like a monopoly, it would likely result in their being able to Group of answer choices
Answer:
a. divide up the monopoly level of profit amongst themselves
Explanation:
Here are the options :
a. divide up the monopoly level of profit amongst themselves
b. hold down output in the short-run
c. charge a higher price in the short-run
d. both b and c are correct
An oligopoly is when there are few firms operating in an industry.
characteristics of an oligopoly includes :
1. few large firms operating in the industry
2.high barriers to entry or exit of firms.
when oligopolistic firms banded together with the intention of acting like a monopoly, it is known as a collusion.
when there is a collusion, the firms act like a monopoly, that is they decide on the price or quantity to sell at. the profits they earn is divided among the firms
John Q. Public spends all of his income on gas and burgers. Draw his budget constraint for these products when the following are true:
A. Graph A: his income is $80, the cost of a CD is $2 and a cost of a burger is $2.
B. Graph B: his income is $120, the cost of a CD is $2 and the cost of a burger is S2.
C. Graph C: his income is $80, the cost of a CD is $5 and the cost of a burger is $2.
D. Add an indifference curve into graph A. How many CDs and burgers will he buy to be at equilibrium?
E. Add an indifference curve into graph B. How many CDs and burgers will he buy to be at equilibrium?
F. Add an indifference curve into graph C. How many CDs and burgers will he buy to be at equilibrium?
G. Does the equilibrium level of CDs and burgers change due to the changes in income and costs?
An option is called a derivative security because: Select one: a. its value is derived from that of another asset b. to calculate its worth requires extensive derivations c. it is the basic building block security we use to value all other derivative securities d. its value is derived from the existence of a convex payoff around an exercise value e. none of the above
Answer:
The answer is A.
Explanation:
Firstly, what is a derivative? - A derivative is a financial instrument that derives its value from the value of the underlying asset(bonds, equity etc) or forward rate agreement in the case of interest rate swap. A derivative transforms the value of the underlying.
Examples of derivative are, forward contract, futures, options, swaps etc.
Therefore, option A is the correct option.
On Jan 15th, Mr. White discovered that the net income for the previous year was understated by $60,000. Mr. Black tells Mr. White that this net income of $60,000 should be shared in the proportion of their current capital balances. (Mr. White = 150,000/$250,000 = 60% = $36,000; Mr. Black = $100,000/$250,000 = 40% = $24,000). But Mr. White feels that the additional income should be shared in the ratio of 2:1 ($60,000 x 2/3 = $40,000 Mr. White; $60,000 x 1/3 = $20,000 Mr. Black). Who is correct? Why?
Answer:
Mr. Black is correct. There is a basis established by their current capital balances. Mr. White's ratio of 2 : 1 has not discernible basis, unless that has been their profit sharing ratio.
Explanation:
In the absence of any contrary agreement, partners in a partnership business always share their net income based on their capital contributions. Sometimes, this may not be strictly followed, especially with changes effected over the years, it becomes necessary to adopt home-grown solutions. One of such is the current capital balances, instead of the original capital contributions. This approach takes care of changes and value contributions over a number of years that the business has been in operation, which the current capital accounts will always show.
"A municipality has a tax rate of 18 mills. A piece of real property in the municipality is assessed at $180,000 and has a fair market value of $165,000. The annual tax liability on the property is:"
Answer:
$3,240
Explanation:
Calculation for the annual tax liability on the property
Using this formula
Annual tax liability= (Tax rate× Real property )
Where= Tax rate =18 million
Real property=180,000
Let plug in the formula
Annual tax liability=( .018x180000)
Annual tax liability=$3,240
Therefore the annual tax liability on the property is $3,240
Michelle Townsend owns stock in National Computers. Based on information in its annual report, National Computers reported after-tax earnings of $9,700,000 and has issued 7,000,000 shares of common stock. The stock is currently selling for $32 a share. a. Calculate the earnings per share for National Computers. (Round your answer to 2 decimal places.) b. Calculate the price-earnings (PE) ratio for National Computers. (Use the rounded earnings per share from part a. Round your answer to 2 decimal places.)
Answer:
1. Earnings per share = $1.39
2. Price earning ratio = $23.02
Explanation:
1. Earnings per share = After tax income / Number of shares
Earnings per share = $9,700,000 / 7,000,000
Earnings per share = $1.39
2. Price earning ratio = Price per share / Earning per shares
Price earning ratio = $32 / $1.39
Price earning ratio = $23.02
Exhibit 24-4 Price Quantity Demanded Total Fixed Cost Total Variable Cost Total Revenue Total Cost Marginal Revenue Marginal Cost $50 0 $8 $0 (C) (H) 45 1 8 20 (D) (I) (L) (R) 40 2 (A) 30 (E) (J) (M) (S) 35 3 8 55 105 63 (N) (T) 30 4 8 (B) (F) 93 (P) (U) 25 5 8 125 (G) (K) (Q) (V) Refer to Exhibit 24-4. What dollar amounts go in blanks (F), (G), (H), (I), and (J), respectively
Answer:
F = Total Revenue at 4 units
= Price * Quantity demanded
= 30 * 4
= $120
G = Total Revenue at 5 units
= Price * Quantity demanded
= 30 * 5
= $150
H = Total Cost at 0 units
= Fixed Costs + Variable Costs
= 8 + 0
= $8
I = Total Cost at 1 unit
= Fixed Costs + Variable Costs
= 8 + 20
= $28
J = Total Cost at 2 units
= Fixed Costs + Variable Costs
Fixed costs are fixed at $8 so (A) is $8
= 8 + 30
= $38
Suppose the economy is in a recession. The economy needs to expand by at least $300 billion, and the marginal propensity to consume is 0.6. What is the least amount the government can spend to overcome the $300 billion gap
Answer: $120 billion
Explanation:
Fron the question, we are told that an economy is in a recession and needs to expand by at least $300 billion, and the marginal propensity to consume is 0.6.
The least amount the government can spend to overcome the $300 billion gap goes thus:
Since MPC = 0.6, then the multiplier will be:
= 1/(1-MPC)
= 1/(1-0.6)
= 1/0.4
=2.5
We are also informed that the required change in the money supply is $300 billion. Then, the investment needed will be:
= Expansion/Multiplier
= $300 billion/2.5
= $120 billion
Wikipedia's engagement of readers and the public in developing content, with an emphasis on timeliness and the breadth of content, exemplifies this type of value innovation:
Answer: Raise
Explanation:
The options for the question are:
a. Raise
b. Create
c. Reduce
d. Eliminate
Wikipedia is used by people that are involved in academics or anyone that is seeking information as it gives information regarding different topics and issues.
Wikipedia's engagement of readers and the public in developing content, with an emphasis on timeliness and the breadth of content, exemplifies this type of value innovation raise.
Wikipedia is utilized by academicians and anybody looking for knowledge since it provides information from a wide range of topics and situations.
This form of value innovation raising is shown by Wikipedia's participation of users and the public in producing content, with a concentration on immediacy and breadth of material.
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Fortune Enterprises is an all-equity firm that is considering issuing $13.5 million of perpetual debt. The interest rate is 10%. The firm will use the proceeds of the bond sale to repurchase equity. Fortune distributes all earnings available to stockholders immediately as dividends. The firm will generate $3 million of earnings before interest and taxes (EBIT) every year into perpetuity. Fortune is subject to a corporate tax rate of 40%. Suppose the personal tax rate on interest income is 55%, and the personal tax rate on equity income is 20%.
What is the annual after-tax cash flow to debt holders under each plan in Q7?
A. Debt holders get $0 mil. under the unlevered plan vs. 1.2 mil. under the levered plan
B. Debt holders get $1.2 mil. under the unlevered plan vs. 0.66 mil. under the levered plan
C. Debt holders get $0 mil. under the unlevered plan vs. 0.66 mil. under the levered plan
D. Debt holders get $0 mil. under the unlevered plan vs. 0.6075 mil. under the levered plan
Answer:
D. Debt holders get $0 mil. under the unlevered plan vs. 0.6075 mil. under the levered plan
Explanation:
interests paid to debt holders = $13,500,000 x 10% = $1,350,000
generally, interest revenue is taxed as ordinary revenue = corporate income tax rate (if debt holder is a business) or personal income tax (if debt holder is an individual).
under the first plan, debt holders get nothing because there is no outstanding debt since the company is an all equity firm.
under the second plan, if the personal tax rate on interest income is 55%, which is really high, the debt holders will earn $1,350,000 x (1 - 55%) = $607,500
Exercise C The marketing department of Specialty Coffees estimates the following monthly demand for espresso in these four price-quantity relationships: Demand 1 9,000 cups at $1.00 per cup 2 8,000 cups at $1.25 per cup 3 6,000 cups at $1.50 per cup 4 4,000 cups at $1.75 per cup The fixed costs of $3,000 per month are not affected by the different price-volume alternatives. Variable costs are $0.25 per cup. What price should Specialty Coffees set for espresso
Answer:
It should price the espresso at $1.25
Explanation:
[tex]\left[\begin{array}{ccccc}&D1&D2&D3&D4\\$Sales Price&1&1.25&1.5&1.75\\$Variable Cost&0.25&0.25&0.25&0.25\\$Margin&0.75&1&1.25&1.5\\$Quantity&9,000&8,000&6,000&4,000\\$Contribution&6,750&8,000&7500&6,000\\$Fixed Cost&3,000&3,000&3,000&3,000\\$Income&3,750&5,000&4,500&3,000\\\end{array}\right][/tex]
The best Income is generated at the price of 1.25 dollar
Therefore, this is the amount to Specialty Coffees set for espresso.
Goods that are specifically made for the buyer and are of such an unusual nature that they are not suitable for trade in the ordinary course of the seller's business are called _____.
Answer:
non-resellable goods
Explanation:
Sometimes goods that are so uniquely customized in order to fit or serve only one client, cannot be sold to anyone else. This type of goods are considered non-resellable since it is very difficult or very unusual for another customer to purchase such a good.
E.g. suppose that you have a lot of money but at the same time like rainbows and decide that you are going to purchase a Porsche, but you are going to customize with a rainbow like paint and interior. This car would be so unique that only you would buy it and drive it.
An investor purchases a put option with a strike price of $100 for $3. This option is considered "in the money" if the underlying is trading:
Answer: a.below $100
Explanation:
When a Put option is considered "in the money", it means that the underlying stock is trading at a value less than the strike price.
This is because with Put options, a person makes a profit if the underlying stock decreases to a value lower than the Strike Price because the Put option gives them to right to sell at the Strike price which means they would be selling at a value higher than the Market.
The above Put is therefore "in the money" if the underlying is selling less than the Strike price of $100.
a) While excavating, the Contractor hits a rock layer. Since the plans and soil report did not mention such rock, the contractor files a claim under: i. Force majeure. ii. Differing site conditions. iii. Design errors/omissions. iv. Unusual weather conditions. v. Changes in owner’s requirements.
Answer:
Differing site conditions
Explanation:
A differing site condition is a condition that has been changed. Since the plan did not mention this rock, the contractor can file a claim under this.
It is a hidden physical condition that is discovered at a site which is actually different from what was expected. It can also be regarded as unforeseen site condition.
Suppose the 2017 financial statements of 3M Company report net sales of $21.7 billion. Accounts receivable (net) are $3.40 billion at the beginning of the year and $3.42 billion at the end of the year.
1. Compute 3M’s receivable turnover.
2. Compute 3M’s average collection period for accounts receivable in days.
Answer:
A.Receivable turnover 6.36
B. Average collection period 57.38
Explanation:
A. Computation of 3M Company’s receivable turnover
Using this formula
Receivable turnover= Net annual credit sale / (beginning accounts receivable+ending accounts receivable)/2
Let plug in the formula
Receivable turnover=21.7/ ((3.40 +3.42)/2)
Receivable turnover= 21.7/(6.82/2)
Receivable turnover=21.7/3.41
Receivable turnover=6.36
B. Computation of 3M Company’s average collection period for accounts receivable in days
Using this formula
Average collection period = Number of days in a year/Receivable Turnover
Let plug in the formula
Average collection period=365 /6.36
Average collection period= 57.38
Therefore Receivable turnover will be 6.36 and the Average collection period will be 57.38.
You are preparing a presentation on networking for a professional development seminar that your company is hosting for its employees. You look at the attendance list and see that you have good relationships with all of the registered seminar participants. Additionally, this presentation is a follow-up presentation that was requested by previous participants. You know you will have a friendly audience. What organizational pattern would be best for this situation
Answer:
any pattern.
Explanation:
When preparing a presentation for an organizational seminar, it is ideal to pre-analyze the audience for whom you will be presenting, the common characteristics of the audience will be essential for choosing the best organizational pattern.
In the scenario above, it is possible to perceive that the public is known and friendly, therefore any organizational pattern can be used, the focus in this case should be the use of a pattern that increases the involvement of the participants.
The essential thing is for the presenter to convey confidence by passing on important information, preparing beforehand, maintaining a friendly and cordial posture and being open to interaction with the public.
To answer this question, refer to the crossover chart. For high volume production process, Process A would most likely be the best option. Group of answer choices True False
Answer: False
Explanation:
For a high volume Process, Process C would be the best option because it has the lowest cost at higher volumes.
Process A would be the best option if the company was looking for a low volume production process because at that point, it has the lowest cost. When it comes to high volume production though, Option A is the worst option as it is the most expensive.
When using the equity method, receipt of cash dividends increases the carrying (book) value of an investment in equity securities.
A. True
B. False
7. What is the advantage of binding things as early as possible? What is the advantage of delaying bindings?
Answer:
1. early binding enhances performance
2. late binding gives flexibility
Explanation:
this is generally the advantage of early binding. early binding gives room for better efficiency
.This is because it would be needless to reanalyze every time whenever something is declared. Early binding is for performance.
meanwhile late binding is known to have better flexibility and gives room for more polymorphism. this binding gives extension to runtime.
MONTGOMERY INC.
Comparative Balance Sheets
December 31
Current Year Prior Year
Assets
Cash $ 30,800 $ 31,000
Accounts receivable, net 8,900 10,900
Inventory 79,800 63,000
Total current assets 119,500 104,900
Equipment 44,200 37,300
Accum. depreciation—Equipment (19,900) (13,800)
Total assets $ 143,800 $ 128,400
Liabilities and Equity
Accounts payable $ 21,200 $ 22,900
Salaries payable 400 500
Total current liabilities 21,600 23,400
Equity
Common stock, no par value 102,400 94,100
Retained earnings 19,800 10,900
Total liabilities and equity $ 143,800 $ 128,400
MONTGOMERY INC.
Income Statement
For Current Year Ended December 31
Sales $ 38,500
Cost of goods sold (16,000)
Gross profit 22,500
Operating expenses
Depreciation expense $ 6,100
Other expenses 4,700
Total operating expense 10,800
Income before taxes 11,700
Income tax expense 2,800
Net income $ 8,900
Additional Information on Current-Year Transactions
1. No dividends are declared or paid.
2. Issued additional stock for $8,300 cash.
3. Purchased equipment for cash; no equipment was sold.
Use the above information to prepare a statement of cash flows for the current year using the indirect method. (A
Answer:
Montgomery Inc.
Statement of Cash Flow, using the indirect method:
Net income $ 8,900
adjusting non-cash expense:
Depreciation 6,100
Net Cash from operations $15,000
Add: Working Capital:
Accounts receivable (2,000)
Inventory (16,800)
Accounts Payable (1,700)
Salaries payable (100)
Cash from operating activities ($5,600)
Investing Activities:
Purchase of Equipment (6,900)
Financing Activities:
Issue of additional stock 8,300
Net cash flow $4,200
Explanation:
MONTGOMERY INC. Comparative Balance Sheets
December 31
Current Year Prior Year
Assets
Cash $ 30,800 $ 31,000
Accounts receivable, net 8,900 10,900
Inventory 79,800 63,000
Total current assets 119,500 104,900
Equipment 44,200 37,300
Accum. depreciation: Equipment (19,900) (13,800)
Total assets $ 143,800 $ 128,400
Liabilities and Equity
Accounts payable $ 21,200 $ 22,900
Salaries payable 400 500
Total current liabilities 21,600 23,400
Equity
Common stock, no par value 102,400 94,100
Retained earnings 19,800 10,900
Total liabilities and equity $ 143,800 $ 128,400
MONTGOMERY INC.
Income Statement
For Current Year Ended December 31
Sales $ 38,500
Cost of goods sold (16,000)
Gross profit 22,500
Operating expenses
Depreciation expense $ 6,100
Other expenses 4,700
Total operating expense 10,800
Income before taxes 11,700
Income tax expense 2,800
Net income $ 8,900
b) The indirect method of preparing the statement of cash flows starts with the net income and uses the balances in the balance sheet to determine if they are net cash outflows or inflows.
Rustafson Corporation is a diversified manufacturer of consumer goods. The company's activity-based costing system has the following seven activity cost pools
Activity Cost Pool Estimated Overhead Cost Expected Activity
Labor-related $ 52,000 8,000 direct labor-hours
Machine-related $ 15,000 20,000 machine-hours
Machine setups 42,000 1,000 setups
Production orders 18,000 500 orders
Product testing $48,000 2,000 tests
Packaging $ 75,000 5,000 packages
General factory 108,800 8,000 direct labor-hours
a. Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.)
b. Compute the company's predetermined overhead rate, assuming that the company uses a single plantwide predetermined overhead rate based on direct labor-hours. (Round your answer to 2 decimal places.)"
Answer and Explanation:
a. The computation of the activity rate is shown below:
(a) (b) (a ÷ b)
Activity Estimated Expected Activity rate
Cost Pool Overhead Cost Activity
Labor-related $52,000 8,000 $6.50
direct labor-hours
Machine-related $15,000 20,000 $0.75
machine-hours
Machine setups 42,000 1,000 setups $42
Production orders 18,000 500 orders $36
Product testing $48,000 2,000 tests $24
Packaging $75,000 5,000 packages $15
General factory 108,800 8,000 $13.60
direct labor-hours
Total $358,800
b. The company predetermined overhead rate is shown below:
= Total estimated overhead cost ÷ direct labor hours
= $358,800 ÷ 8,000 direct labor hours
= $44.85
From past records it is known that 10% of items from a production line are defective. If two items are selected at random, what is the probability that only one is defective?
Answer:
0.2
Explanation:
The Probability distribution is the function which describes the likelihood of possible values assuming a random variable. The 10% of the items from the production line are assumed to be defective. There is a sample selection of 2 items. The probability that one of the item among the selected sample of two items is found defective is 0.2 (2 items sample *10%)
Charlie Plumbing Supplies has a return on assets (ROA) of 24%, while the industry average of similar companies is 13%. This means that Charlie Plumbing Supplies' asset turnover is higher than the industry average.
a. True
b. False
A clothing manufacturer produces clothing in five locations in the U. S. In a move to vertical integration, the company is planning a new fabric production plant that will supply fabric to all five clothing plants. The clothing plants have been located on a coordinate system as follows:
Location (X,Y)
A 7,2
B 4,7
C 5,5
D 2,2
E 9,4
Shipments of fabric to each plant vary per week as follows: plant A, 200 units; plant B, 400 units; plant C, 300 units; plant D, 300 units; and plant E, 200 units. What is the optimal location of X for the fabric plant?
Answer:
The optimal location of X for the fabric plant is 4.9
Explanation:
X Y W X.W Y.W
A 7 2 200 1400 400
B 4 7 400 1600 2800
C 5 5 300 1500 1500
D 2 2 300 600 600
E 9 4 200 1800 800
Total = 1,400 6,900 6,100
X= 6,900 / 1,400 = 4.9
Y= 6,100 / 1,400 = 4.4
InstaTrack is a newly emerging athletic shoe manufacturing company. After extensive market research, InstaTrack divides its market into professional athletes, "hobbyists" or amateur players, and people who wear shoes as part of their casual attire. Each category has its own needs, traits, and marketing goals. In this scenario, which of the following most accurately reflects Insta Track's marketing strategy?
a) diversification
b) development
c) positioning
d) segmentation
Answer:
The answer is D
Explanation:
Market segmentation is the process of dividing a larger consumers or market into a smaller group(segments) based on some criteria.
One of the importances is that it allows a business to know what their customers' demands, or needs are.
Customers in the same segment respond similarly to market strategies.