Answer: B. Quality function deployment
Explanation:
Quality function deployment is a very useful process to the manufacturing, healthcare and service industry that was introduced in the 1960s in Japan. It refers to the process of converting the needs and requirements of customers for a good generated by market research to actionable plans and specification that engineers can then use to create the product in question and thus satisfy the need of the customer.
Assume ExxonMobil's price dropped to $35 overnight. Given the dividend growth rate of ExxonMobil of 8.00% and the last annual dividend of $1.70, what is the implied required rate of return necessary to justify the new lower market price of $ 35? What is the implied required rate of return necessary to justify the new lower market price of $ 35?
Answer:
Re = 13.26%
Explanation:
we can use the dividend growth model:
P₀ = Div₁ / (Re - g)
P₀ = $35Div₁ = $1.70 x 1.08 = $1.836g = 8%Re = cost of equity or required rate of return = ?$35 = $1.836 / (Re - 0.08)
Re - 0.08 = $1.836 / $35 = 0.0526
Re = 0.0526 + 0.08 = 0.1326 = 13.26%
Which of the following terms refers to the necessary stress that activates and motivates people to achieve goals and change their environments?
a. distress.
b. cognitive dissonance
c. general adaptation syndrome.
d. eustress.
e. emotional dissonance
Answer:
d. eustress
Explanation:
Eustress can be seen or refers to the stress which can be beneficial to the person or individual involved, and this stress can either be psychological or physical such as exercising ,which is why EUSTRESS can tend to be a positive response that a person or an individual has to a stressor and can depend on one's current feelings of control, desirability as well as timing of the stressor .
Therefore EUSTRESS help to produces positive feelings such as excitement, fulfillment, satisfaction that activates and motivates people to achieve goals and change their environments.
Sage Company is operating at 90% of capacity and is currently purchasing a part used in its manufacturing operations for $15.00 per unit. The unit cost for the business to make the part is $22.00, including fixed costs, and $12.00, excluding fixed costs. If 38,423 units of the part are normally purchased during the year but could be manufactured using unused capacity, what would be the amount of differential cost increase or decrease from making the part rather than purchasing it?
Answer:
$115,269 decrease
Explanation:
Below are the following information given in the question.
Purchase price = $15
Variable cost per unit = $12
Fixed cost per unit = $10. i.e $22-$10
Production in units = 38,423
N.B. As in the above scenario, we will need to factor in the variable cost per unit only in order to determine whether it is convenient to make the part in house or purchase it. Also, we will have to ignore fixed costs because of the fact that it is constant in the option of whether to buy or make part in house.
Therefore,
Option at purchasing/Buying
= $38,423 × $15
= $576,345
Option at making the part in house
= $38,423 × $12
= $461,076
Cost difference is therefore = $115,269 decrease
Kate has put a lot of time and effort into streamlining the process to design and produce a greet-ing card. She has documented the entire process in a QuickTime video she produced on her iMac. The video takes the viewer through the step-by-step process of selecting hardware and software, and shows how to design and produce the card. Kate has met many people who would like to get into the production of greeting cards, but are overwhelmed by the process. Kate has decided to sell the entire package (hardware, software, and video tutorial) to aspiring card producers. The cost of the entire package to Kate is $4,500 and she plans to mark it up by $500 and sell it for $5,000. John Stevens, an individual Kate met recently at a greeting card conference, would like to buy the pack-age from Kate. Unfortunately, John does not have this much cash and would like for Kate to extend credit.Kate believes that many of her customers will not be able to pay cash and, therefore, she will need to find some way to provide financing. One option she is exploring is to accept credit cards. She learned that the credit card provider charges a 2.5 percent fee and provides immediate cash upon receiving the sales receipts.Kate would like you to answer the following questions: 1. What are the advantages and disadvantages of offering credit
Answer:
The disadvantage of offering credit would be that Kate loses $125 on the sale of each $5,000 package.
$125 is 2.5% of $5,000
Her expected gain is shortened by $125 and now becomes (500 - 125 = $375).
Explanation:
The advantage of offering credit would be that immediate cash is provided, upon presentation of the sales receipts.
Consider the economies of Hermes and Gobbledigook, both of which produce gobs of goo using only tools and workers. Suppose that, during the course of 20 years, the level of physical capital per worker rises by 4 tools per worker in each economy, but the size of each labor force remains the same. Complete the following tables by entering productivity (in terms of output per worker) for each economy in 2016 and 2036.
Year Hermes
Physical Capital Labor Force Output Productivity
(Tools per worker) (Workers) (Gobs of goo) (Gobs per worker)
2016 11 30 3,000
2036 15 30 3,600
Year Gobbledigook
Physical Capital Labor Force Output Productivity
(Tools per worker) (Workers) (Gobs of goo) (Gobs per worker)
2016 8 30 2,400
2036 12 30 3,600
Initially, the number of tools per worker was higher in Hermes than in Gobbledigook. From 2016 to 2036, capital per worker rises by 4 units in each country. The 4-unit change in capital per worker causes productivity in Hermes to rise by a_______ amount than productivity in Gobbledigook. This illustrates the effect_______which makes it______for countries with low output to catch up to those with higher output.
Answer:
Hermes
Productivity (Gobs per worker)
2016 100
2036 120
Gobbledigook
Productivity
(Gobs per worker)
2016 80
2036 120
Initially, the number of tools per worker was higher in Hermes than in Gobbledigook. From 2016 to 2036, capital per worker rises by 4 units in each country. The 4-unit change in capital per worker causes productivity in Hermes to rise by a SMALLER amount than productivity in Gobbledigook. This illustrates the effect OF CATCH UP which makes it POSSIBLE for countries with low output to catch up to those with higher output.
Explanation:
Hermes
Year Physical Capital Labor Force Output Productivity
(Tools per worker) (Workers) (Gobs of goo) (Gobs per worker)
2016 11 30 3,000 3,000/30=100
2036 15 30 3,600 3,600/30=120
Gobbledigook
Year Physical Capital Labor Force Output Productivity
(Tools per worker) (Workers) (Gobs of goo) (Gobs per worker)
2016 8 30 2,400 2,400/30=80
2036 12 30 3,600 3,600/30=120
Initially, the number of tools per worker was higher in Hermes than in Gobbledigook. From 2016 to 2036, capital per worker rises by 4 units in each country. The 4-unit change in capital per worker causes productivity in Hermes to rise by a SMALLER amount than productivity in Gobbledigook. This illustrates the effect of CATCH UP which makes it POSSIBLE for countries with low output to catch up to those with higher output.
Suppose a seven-year, $ 1 comma 000$1,000 bond with aa 7.7 %7.7% coupon rate and semiannual coupons is trading with a yield to maturity of 6.45 %6.45%. a. Is this bond currently trading at a discount, at par, or at a premium? Explain. b. If the yield to maturity of the bond rises to 7.36 %7.36% (APR with semiannual compounding), what price will the bond trade for?
Answer:
a. Premium
b. $1,018.34
Explanation:
a. For computing the present value we need to apply the formula which is shown in the attachment below:
Given that,
Future value = $1,000
Rate of interest = 6.45% ÷ 2 = 3.225%
NPER = 7 years × 2 = 14 years
PMT = $1,000 × 7.7% ÷2 = $38.50
The formula is shown below:
= -PV(Rate;NPER;PMT;FV;type)
So, after applying the above formula, the present value is $1,069.53
Since the present value is more than the face value so the bond is currently sold at a premium
b. For computing the present value we need to apply the formula which is shown in the attachment below:
Given that,
Future value = $1,000
Rate of interest = 7.36% ÷ 2 = 3.68%
NPER = 7 years × 2 = 14 years
PMT = $1,000 × 7.7% ÷2 = $38.50
The formula is shown below:
= -PV(Rate;NPER;PMT;FV;type)
So, after applying the above formula, the present value is $1,018.34
The Western Capital Growth mutual fund has: Total assets$812,000,000Total liabilities$12,000,000Total number of shares 40,000,000 What is the fund's net asset value (NAV) per share?
Answer:
The fund's net asset value (NAV) per share is $20.
Explanation:
Net Asset Value (NAV) = (Assets - Liabilities) ÷ Number of Shares
= ($812,000,000 - $12,000,000) ÷ 40,000,000
= $20
Conclusion :
The fund's net asset value (NAV) per share is $20.
Carter Co. acquired drilling rights for $18,550,000. The oil deposit is estimated to produce a total of 74,200,000 gallons. During the current year, 6,000,000 gallons were drilled. Record the journal entry on December 31 to recognize the depletion expense for the year. In your journal entry be sure to clearly indicate what accounts/amounts you are debiting and what accounts/amounts you are crediting.
Journal
Date Description Post. Ref. Debit Credit
Answer:
Depletion expenses Dr $1,500,000
To Accumlated depletion $1,500,000
(Being the depletion expense is recorded)
Explanation:
The journal entry is shown below:
Depletion expenses Dr $1,500,000
To Accumlated depletion $1,500,000
(Being the depletion expense is recorded)
For recording this we debited the depletion expense as it increased the expense and credited the accumulated depletion as it reduced the assets
The computation is shown below:
The purchase price is
= Aquired value ÷ estimated production
= $18,550,000 ÷ 74,200,000
= $0.25 per gallons
Now depletion allowance is
= current year production × purchase price
= 6,000,000 × $0.25
= $1,500,000
The appropriate journal entry to record the transaction is:
Debit Depletion expense $1,500,000
Credit Accumulated depletion $1,500,000
First step is to calculate the depletion rate
Depletion rate = Cost/Estimated size
Depletion rate = $18,550,000/74,200,000
Depletion rate = $0.25 per gallon
Second step is to calculate the depletion expense
Depletion expense = Depletion rate × Quantity extracted
Depletion expense = $0.25 × 6,000,000 gallons
Depletion expense = $1,500,000
Third step is to prepare the journal entry for Carter Co.
December 31
Debit Depletion expense $1,500,000
Credit Accumulated depletion $1,500,000
Learn more here:https://brainly.com/question/16922056
A proposed project has fixed costs of $47,000 per year. The operating cash flow at 11,000 units is $69,000. a. Ignoring the effect of taxes, what is the degree of operating leverage
Answer: 1.68
Explanation:
From the question, we are informed that a proposed project has fixed costs of $47,000 per year and that the operating cash flow at 11,000 units is $69,000.
Ignoring the effect of taxes, the degree of operating leverage will be:
= 1 + ($47,000/$69,000)
= 1 + 0.68
= 1.68
You will require $700 in 5 years. If you earn 5% interest on your funds, how much will you need to invest today in order to reach your savings goal
Answer:
PV= $548.47
Explanation:
Giving the following information:
You will require $700 in 5 years. You earn 5% interest on your funds.
To calculate the initial investment, we need to use the following formula:
PV= FV/(1+i)^n
PV= present value
FV= future value
n= number of years
i= interest rate
PV= 700/(1.05^5)
PV= $548.47
The Atlantic Company sells a product for $150 per unit. The variable cost is $60 per unit, and fixed costs are $270,000. What is the break-even point in sales units?_____________________________________ What is the break-even points in sales units if the company desires a target profit of $36,000?
Answer:
The break even units are 3000 units and when it desires the profit of $36000 then sales unit is 3400 units.
Explanation:
The selling price of a product (SP) = $150 per unit.
Variable cost (VC) = $60 per unit.
Fixed cost of the company = $270000
Break-even units can be calculated by dividing the fixed cost from the difference in selling price and variable cost.
Break even Units = (fixed cost) / ( SP – VC)
= 270000 / (150-60)
= 3000 units.
Break-even units when a company desires a profit of $36000.
Desired units for sales = (Fixed Cost + Profit)/ Contribution per unit
= (270,000 + 36,000) / (150 - 60)
= 3,400 units
Gabriele enterprises has bonds on the market making annual payments, with seven years to maturity, a par value of 1000, and selling for 962. At this price, this price, the bonds yield 6.6 percent.
What must the coupon rate be on the bonds?
Answer:
The answer is =5.91%
Explanation:
N(Number of periods) = 7 years
I/Y(Yield to maturity) = 6.6percent
PV(present value or market price) = $962
PMT( coupon payment) = ?
FV( Future value or par value) = $1,000.
We are using a Financial calculator for this.
N= 7; I/Y = 6.6; PV = -962; FV= $1,000; CPT PMT= $59.05
Therefore, the coupon rate of the bond is of the bond is $59.05/1000
=5.91%
Sales 22160 units Cash, beginning balance $34000 Selling and administrative (of which depreciation, $5,000) $53000 Required minimum cash balance $66480 If necessary, the company will borrow cash from a bank on the first day of March. Assume that the borrowing can be made in any (exact) amount, but bears interest at 3% per month. The March interest will be paid during subsequent months. Q: What is the closest amount of cash that must be borrowed on March 1 to cover all cash disbursements and to obtain the desired March 31 cash balance
Answer:
Loan taken: 58,320
Explanation:
We add up the beginning cash with the receipts and subtract the expenses.
Then, we compare agaisnt the mnimum required balance
Beginning Cash 34,000
Cash Receipts
Sales 22,160
Total cash form operations: 56,160
Cash disbursements
S&A expense (w/o depreciations) 48,000
Ending Cash from operations 8,160
Minimum Balance: 66,480
Loan taken: 58,320
Tri Fecta, a partnership, had revenues of $373,000 in its first year of operations. The partnership has not collected on $45,200 of its sales and still owes $38,700 on $170,000 of merchandise it purchased. There was no inventory on hand at the end of the year. The partnership paid $27,100 in salaries. The partners invested $41,000 in the business and $25,000 was borrowed on a five-year note. The partnership paid $2,250 in interest that was the amount owed for the year and paid $8,000 for a two-year insurance policy on the first day of business. Ignore income taxes. Compute the cash balance at the end of the first year for Tri Fecta.
Answer:
Cash balance = $225,150
Explanation:
Cash balance can be calculated by calculating the difference of cash inflows and cash outflows
Cash inflow
Investment $41,000
Borrowed $25,000
Cash collection(w) $327,800
Total Collection $393,800
Less:
Cash outflow
Merchandise(w) $131,300
Salaries paid $27,100
Interest paid $2,250
Insurance paid $8,000
Total cash paid $168,650
Cash Balance = Total Collection - Total Cash paid
Cash balance = $393,800 - $168,650
Cash balance = $225,150
Working
Cash collection = The partnership has not collected on $45,200 of its sales
Cash collection = Sales - 45,200
Cash collection = $373,000 - $45,200
Cash collection = $327,800
Merchandise = Tri Fecta still owes $38,700 on $170,000 of merchandise it purchased
Merchandise = $170,000 - $38,700
Merchandise = $131,300
Arianna's personal residence has an adjusted basis of $308,150 and a fair market value of $277,335. Arianna converts the personal residence to rental property. What is Arianna's gain basis? What is her loss basis? Arianna's basis for gain is $ and her basis for loss is $
Answer:
Arianna's basis for loss $277,335
Arianna's basis for gain $308,,150
Explanation:
Calculation for Arianna's gain basis and loss basis
Since the original basis for loss on personal use assets that is been converted to either the business or the income producing use is the lower or lesser of the property's adjusted basis or fair market value on the date of conversion which means that the gain basis for the converted property will tend to be the property's adjusted basis on the date of conversion.
Arianna's basis for loss will be $277,335 (lower of $308,150 adjusted basis and fair market value of $277,335).
The amount of $30,815 that was been decline in value is a personal loss whichncan never be recognized for tax purposes this means that Arianna's basis for gain is $308,,150 (adjusted basis).
A citizen group raised funds to establish an endowment for the Eastville City Library. Under the terms of the trust agreement, the principal must be maintained, but the earnings of the fund are to be used to purchase database and periodical subscriptions for the library. A preclosing trial balance of the library permanent fund follows:
Trial Balance-December 31, 2017 Debits Credits
Cash $8,500
Investments 18,000
Additions to permanent endowments $510,000
Investment income 48,000
Expenditures-subscriptions 39,500
Intergovernmental grant 8,000
Net increase in fair value of investments 2,000
Accrued interest receivable 2,000
Accounts payable $568,000 $568,000
Required:
A. Prepare any closing entries necessary at year-end.
B. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the library permanent fund.
C. Prepare a balance sheet for the Library Permanent Fund (Use Assigned to Library for any spendable fund balance).
Answer:
a. Journal entries
Particulars Debit Credit
Revenue: Addition to permanent $510,000
endowment
Revenue investment income $48,000
Revenue : increase in fair value $8,000
of investment
Expenditure - subscription $39,500
Fund balance $526,500
b. Statement of revenue , expenditure , and changes in fund balance
Particulars Amount
Revenue
Addition to permanent endowment $510,000
Investment income $48,000
Increase in fair value of investment $8,000
Total revenue $566,000
Expenditure
Library subscription $-39,500
Net change in fund balance $526,500
Beginning fund balance 0
Ending fund balance $526,500
c. Balance sheet
Assets
Cash $8,500
Investments $5,18,000
Accrued interest receivable $2,000
Total assets $528,500
Liabilities and fund balance
Liabilities
Accounts payable $2,000.00
Fund balance
Non spendable permanent $510,000
fund principal
Assigned to library $16,500
($526,500 - $510,000)
Total fund balance $526,500
Total liabilities and fund balance $528,500
Demron is in serious negotiations to purchase a welding machine that will enable them to perform their own welding. They currently have their welding outsourced at a cost of $1.50 per weld and a fixed cost of $45,000. Their marketing team feels that they can sustain an annual sales volume sufficient to require 35,000 welds. If a fancy new welding rig costs $13,500 what is the maximum variable cost per weld that Demron should be willing to pay in order to bring this process in-house
Answer:
Demron
Outsourcing welding or Purchasing a welding machine for in-house welding:
Cost of outsourcing:
Variable cost = $1.50 x 35,000 = $52,500
Fixed cost 45,000
Total outsourcing costs $97,500
Cost of purchasing a welding machine:
Fixed cost = $13,500
Maximum Variable costs = $84,000
Total in-house cost = $97,500
Maximum variable cost per weld
= $84,000/35,000
= $2.40
Explanation:
This problem of outsourcing welding activities of Demron Company or buying the welding machine to enable in-house welding is like a make or buy decision challenge. The appropriate approach to tackling this challenge is to determine the total costs under each option. The option that yields the greater outcome is chosen. However, for Demron's case, a determination of the maximum variable costs that are acceptable for in-house option to be selected is made. The level required for this determination is the level of costs that makes no difference between outsourcing and in-housing welding.
The_____ will solve for the expected return measured in an investor’s domestic currency for a foreign asset denominated its own currency.
Answer:
The Intertemporal Capital Asset Pricing Model (ICAPM)
Explanation:
The Intertemporal Capital Asset Pricing Model (ICAPM) is an useful way to calculate investor returns.
This method which involves predicting model allows an investor to measure their expected return in his own domestic currency. In a sense, It tells the investors the risk to profit gain of an investment.
A country in South America is experiencing high inflation, around 15% annually, and high unemployment, around 25%. According to the AD/AS model, which of the following is most likely to explain this outcome?
a. A positive real shock
b. A positive aggregate demand shock
c. A negative aggregate demand shock
d. A negative real shock
Answer:
The correct answer is the option D: A negative real shock
Explanation:
To begin with, in the case presented where the economy has suffered from high inflation and unemployment rates then the most likely situation that could have happened before to explain this outcome is that the country and its economy were harmed badly by a negative real shock. This tend to happen when the aggregate supply is low and this one tends to decline rapidly affecting the economy in its whole due to the fact that the sellers are now producing less of the products and services and therefore the consumption and the real GDP decreases dramastically.
The faculty member on my study abroad trip to Costa Rica has traveled there many times and is quite knowledgeable about the country and places we visited. She gave us guidance about the country, local culture, and safety issues while we were interning with the local farmers. The faculty member was using
A. Coercive power
B. Expert power
C. Referent power
D. Positional power
Answer:
B. Expert power
Explanation:
Based on the information provided regarding this scenario it can be said that the faculty member was using Expert Power. Expert Power is defined as the use of expert knowledge in order to get a subordinate to follow an instruction or order. Which in this specific scenario, the faculty members unique knowledge and experiences regarding Costa Rica allowed the other faculty members to look to him for guidance when dealing with topics revolving around Costa Rica.
On November 1, Bahama Cruise Lines borrows $3.5 million and issues a six-month, 9% note payable. Interest is payable at maturity. Record the issuance of the note and the appropriate adjustment for interest expense at December 31, the end of the reporting period.
Answer:
Bahama Cruise Lines
Journal Entries:
November 1:
Debit Cash Account $3,500,000
Credit 9% Notes Payable $3,500,000
To record the issue of a six-month note payable.
December 31:
Debit Interest Expense $52,500
Credit Interest Payable $52,500
To record the interest expense for the period.
Explanation:
a) With Bahama Cruise Lines borrowing $3.5 million on November 1 and issuing a six month, 9% note payable, the accounting entries are a debit to the Cash account for the cash received and a credit to the Note Payable account to establish the liability in the accounts.
b) Bahama Cruise Lines will accrue interest on the Note Payable for 2 months for the ending in order to comply with the accrual concept and the matching principle of generally accepted accounting principle. The accrual basis for accounting for transactions requires that expenses are recognized when incurred and not when cash is paid. The amount of the interest for the year is calculated as $52,500 ($3.5 million * 9%)/12 * 2. This also accords with the matching principle which requires that expenses are matched to the revenues of the same period.
OPR finds its cases through all of the following except which one? A. The investigation division of OPR.
Answer:
The investigation division of OPR.
Explanation:
OPR stands for Office of Professional Responsibility. It is a section of department of justice whose task is to monitor any misconduct in the government departments. It is responsibility of OPR to find any allegations that result in misconduct in department of attorney. The OPR finds its cases through all except the own division. There will be chance of familiarity and self review threats in such monitoring.
Mr. White contracts with his wife Ms. White to watch their kids, Joe and Jimmy, one night for $50. What is the status of the contract between Mr. White and Ms. White?
Answer:
There is no any form of contract between Mr. Smith and Ms. White
Explanation:
Based on the information given there is no contract between Mr. Smith and Ms. White reason been that Ms. White gave inadequate consideration .
Based on this inadequate consideration is not void because it can tend to make a contract between two parties unenforceable because of lack procedure defect when bargaining between two parties .
An organization should integrate security awareness education into a new hire’s ongoing job orientation and make it a part of every employee’s on-the-job security training.
a) true
b) false
Answer:
a) true
Explanation:
Security awareness is the knowledge of risks and attitude of the members of the organization regarding the protection of physical and informative assets and it consists of trade secrets, private and classified information, etc. It helps people to become aware of the damages and the damage of crimes and criminal activity.A company's income before interest expense and income taxes is $350,000 and its interest expense is $100,000. Its times interest earned ratio is:
Answer:
Times interest earned ratio is 3.5 times.
Explanation:
The times interest earned (TIE) ratio refers to a measure of the ability of company to honor its debt obligation form the current income of the company. TIE is also refereed to as interest coverage ratio and it can be calculated using the following formula:
TIE = EBIT / Interest expense .......................... (1)
Where;
EBIT = Earnings before interest and taxes = $350,000
Interest expense = $100,000
Substituting the values into equation (1), we have:
TIE = $350,000 / $100,000 = 3.5 times
This indicates that the income of the company is 3.5 times greater than its interest expense.
True or False: Firms operating in more price-competitive industries, or exhibiting lower levels of market power, generally exhibit lower levels of business risk, all other things being equal. This statement is: True False
Answer:
The statement is false
Explanation:
Determining the profitability depends on market power. At a higher market power, the level of profitability will be high.
Conversely, a company operating in a system where its market power is low which results into inability to compete with other companies will cause a low probability.
Justin hires Miguel to sell his baseball glove for $560. As part of their contract, Justin will pay him $100 to conduct the sale. Justin is a _______________________. Group of answer choices
Answer: Factee
Explanation:
This is a factorage transaction in which Justin will pay Miguel to act as an intermediary who will sell the baseball glove and receive a commission. That commission is known as a Factorage.
In a Factorage transaction, the intermediary being paid to sell the product is considered to be the Factor and the person who will pay for the product to be sold is the Factee. Justin in this scenario is paying for the baseball glove to be sold and so is the Factee.
intext:"Pelcher Co. maintains a $400 petty cash fund. On January 31, the fund is replenished. The accumulated receipts on that date represent $110 for office supplies, $140 for merchandise inventory, and $70 for miscellaneous expenses. There is a cash overage of $4. Based on this information, the amount of cash in the fund before the replenishment is"
Answer:
$84
Explanation:
Calculation for the amount of cash in the fund before the replenishment for Pelcher Co.
Petty Cash $400
Less : Office Supplies ($110)
Less: Merchandise Inventory ($140)
Less :Miscellaneous ($70)
Add Cash Overage $4
Cash in Fund $84
Therefore the amount of cash in the fund before the replenishment for Pelcher Co will be $84
Max Company uses 20,000 units of Part A in producing its products. A supplier offers to make Part A for $7. Max Company has relevant costs of $8 a unit to manufacture Part A. If there is excess capacity, the opportunity cost of not buying Part A from the supplier is:________
a) $20,000.
b) $0.
c) $160,000.
d) $140,000.
Answer:
$20,000
Explanation:
Max company makes use of 20,000 units of part A to manufacture its product
A supplier offers to produce part A for $7
Max company has relevant costs to $8 per unit to produce part A
Therefore, the opportunity cost of not buying part A from the supplier can be calculated as follows
Opportunity cost= 20,000 units of part A($8-$7)
= 20,000 units×$1
= 20,000×$1
= $20,000
Hence the opportunity cost of not buying part A from the supplier when there is excess capacity is $20,000
Ownership in a corporation:_______.
a. is difficult to transfer.
b. is more easily transferable than ownership in other forms of organization.
c. is transferred in much the same way as stock in a partnership.
d. noticeably affects the operation of the business.
Answer:
B
Explanation:
Ownership in a corporation is more easily transferable than ownership in other forms of organization.
A corporation is owned and managed by all the members of the corporation. Each of the members are regarded as shareholders and the amount of shares they own in the corporation is what determines the ownership, control, and profits of the corporation. The corporation is distinct from the owners.