Answer: D. All of the above are correct.
Explanation:
The marginal rate of technical substitution (MRTS) refers to the economic theory which explains the rate at which a particular factor of production must reduce in order for the same level of productivity to be maintained when there's another production factor which is increased.
When the capital is plotted on the vertical axis and labor is plotted along the horizontal axis, then the marginal rate of technical substitution of labor for capital along a convex isoquant will reduce as more and more labor is used. Also, the MRTS equals the negative of the slope of the isoquant and equals the marginal product of labor divided by the marginal product of capital that's MRTSL,K=-MPL/MPK
Therefore, the correct option is All of the above.
Stuart Software has 5.7 percent coupon bonds on the market with 11 years to maturity. The bonds make semiannual payments and currently sell for 93 percent of par. What is the current yield on the bonds
Answer:
current yield = 6.13%
Explanation:
Given:
The software has 5.7 percent coupon bonds
maturity=11 years
current sell=93 percent of par
The objective is to find the current yield on the bonds
Formula used:
Current yield = [tex]\frac{Annual Coupon payment}{current selling price}*100[/tex]
Solution:
Current selling price=93% of 1000=930
Annual coupon payment= 5.7% of 1000=57
Then,
On substituting the values in the formula,
Current yield = [tex]\frac{57}{930}[/tex]*100
On Simplifying,
Current yield =6.13%
Therefore,
Current yield =6.13%
_____ feasibility is the measure of how well a proposed solution will work in an organization and how internal and external customers will react to it.
Answer:
Operational
Explanation:
Operational feasibility is a strategic process that typically involves measuring how well a proposed solution to a particular problem will work in an organization while also determining how the organization's internal and external customers will react to the proposed solution.
As a general rule, it's very important and necessary that an organization carry out an operational feasibility so as to have a good knowledge and understanding of its proposed actions.
Answer:
Operational
Explanation:
Operational feasibility is the measure of how well a proposed solution will work in an organization and how internal and external customers will react to it.
Schultz v. Capital International Security, Inc. 460 F.3d 595 (4th Cir. 2006) Facts: The plaintiff-agents provided security services for Schultz and his family at his Virginia residence in twelve-hour shifts. The agents were paid a daily rate for each shift; they received no extra pay for overtime. The agents had a command post at the residence, from which they observed security camera monitors, answered the telephone, and kept a daily log of all arrivals and departures. They also made hourly walks of the property, ensured that members of his family were safe when departing and arriving, sorted mail, and performed various tasks upon request of his family. In addition to their security duties, the agents were responsible for having the household’s vehicles washed and fueled, making wake-up calls, moving furniture, and doing research on the Internet. Schultz's long-time driver and travel agent, Sammy Hebri, formed a company called Capital International Security, Inc. (CIS). Hebri started CIS for the purpose of becoming Schultz's security contractor. Hebri sent a memo (dated July 24, 2002) to the agents directing them to obtain their own private security business licenses from the VDCJS and individual liability insurance so they could be classified as independent contractors. Issue: The issue is whether the bodyguards were considered to be employees or independent contractors for the purpose of the Fair Labor Standards Act. Action: You must respond to all questions below. You must use at least three sources from the class materials and do independent research. Do not combine the five discussion questions and please use the outline below for your paper. Use of the outline will help you organize your research and comments and ensure you do not miss any questions that must be addressed. Your responses to each question must be in narrative format not bullets. Use the headings below to organize your paper.
Question 1A - a. Summarize the relevant facts of the case. What is your opinion on the outcome of this case?
Question 1c - Classification Test: In the above case, what kind of classification test could have been used and what would be the result?
Answer:
Hence the answer is given as follows,
Explanation:
1A) In the given case, the agents who are the plaintiffs were working as security guards for Schultz and his family. There was miscellaneous work that they were required to conduct for the family. The agents were paid a daily wage and weren't paid overtime. Schultz’s driver opened a replacement company called CIS and asked the agents to get their own private security business licenses in order that they will get classified as independent contractors. So, the difficulty arises that whether the agents should be classified as employees or as independent contractors.
The agents were paid a daily wage and not a salary. Moreover, they weren't qualified for overtime pay. Employees usually get salaries and are eligible to urge over time by the overtime work. Hence the agents are independent contractors and can't be considered employees.
1C) In the given case, a hybrid classification test is often wont to check the status of whether the agents were employees or independent contractors. A hybrid classification test has characteristics of right to regulate test also as economic realities test. Schultz and his family weren't controlling the work of the agents. The agents had pre-determined work and that was conducting it in an independent manner. The agents also were paid on a day to day and didn't have a timekeeping requirement. Hence the agents can qualify as independent contractors and not employees as per the hybrid classification test.
Internal control procedures for cash receipts do not require that:_____.
a. Custody over cash is kept separate from its recordkeeping.
b. All collections for sales are received immediately upon making the sales.
c. Clerks having access to cash in a cash register should not have access to the register tape or file.
d. An employee with no access to cash receipts should compare the total cash recorded by the register with the record of cash receipts reported by the cashier.
e. Cash sales should be recorded on a cash register at the time of each sale.
f. All of these.
Answer:
b. All collections for sales are received immediately upon making the sales.
Explanation:
Internal control, regarded as a process used in assuring objective of an organization in operational effectiveness as well as efficiency and reliable financial reporting, it is also used in assuring of compliance with laws as well as regulations and policies. Generally, internal control can be described as everything which is able to controls risks to an organization. It is a way the
resources of an organization are been
measured as well as been directed and monitored.
It should be noted that Internal control procedures for cash receipts require that:.
✓Custody over cash is kept separate from its recordkeeping.
✓Clerks having access to cash in a cash register should not have access to the register tape or file.
✓An employee with no access to cash receipts should compare the total cash recorded by the register with the record of cash receipts reported by the cashier.
✓Cash sales should be recorded on a cash register at the time of each sale
Nabax has an investment that is worth $41,600 and has an expected return of 14.56 percent. The investment is expected to pay her $27,200 in 2 years from today and X in 5 years from today. What is X?
Answer:
The answer is "$41189.19"
Explanation:
Using formula:[tex]\text{Present value=Cash flows} \times \text{Present value of discounting factor(rate \ \%, time period)}[/tex]
[tex]\to 41600=\frac{27200}{1.1456^2}+ \frac{X}{1.1456^5}\\\\\to 41600= (27200 \times 0.761963188)+(X \times 0.506798097)\\\\\to 41600=20725.3987+(X \times 0.506798097)\\\\\\to X=\frac{(41600-20725.3987)}{0.506798097}\\\\[/tex]
[tex]=\$41189.19[/tex]
The Aqua Liquid Assets Money Market Mutual Fund has a NAV of $1 per share. During the year, the assets held by this fund appreciated by 1.4 percent. If you had invested $50,000 in this fund at the start of the year, how many shares would you own at the end of the year
Answer:
Missing word "Final shares=? Net asset value=?"
Final shares is computed as follows:
= (Amount invested / NAV per share) * (1 + Fund appreciation)
= ($50,000 / $ 1) * (1 + 0.014)
= $50,000 * 1.014
= $50,700
As know that this is a Money Market Mutual Fund, hence the Net asset value of this fund at the end of the year will be also $1.
Many business leaders today give up having a private office, and instead work at a desk or cubicle in the middle of the work area to be among other employees. What effect do you think this work area placement has on their power
Answer:
Napoleon once ordered his men on a near suicidal charge against the Austrians and they did exactly what he told them to because they were so inspired by him. This inspiration came from the fact that even though he was their commander, he was on the front lines with them and personally overseeing the artillery bombardment of the enemy.
This is the kind of effect that the business leader staying in the middle of the work area can have. The leader would be amongst their subordinates and by working hard, could inspire them to work hard themselves. This would increase the respect that the employees have of the leader and by extension, the leader's power over them.
Should the leader turn out to be lazy however, an opposite situation could result where the leader's power is diminished as their laziness would be on full display for the workers. who would then lose respect for the leader.
The purpose of a college degree is to give you priority over all professional opportunities.
A
True
B) False
Answer:
A) TrueExplanation:
:::::::::::::::::::::::::
When corporate taxes and the cost of financial distress are taken into consideration, the market value of a firm is equal to the value of the all-equity firm _____ the PV of the tax shield _____ the costs of financial distress
Answer:
rise and decrease
Explanation:
Corporate tax is also called as company and is directly imposed by law on the incomes of capital and many countries imposed such taxes at the national levels and on the state level. Financial distress is a condition which the company make sufficient revenue and has higher fixed losses. This takes place due to some downturns.Your first morning in your new office, you reflect on what type of manager and leader you hope to be. Which of the following best reflects what you believe about employees and how they can best be led?
a. Employees are more loyal and productive if they feel that their leader is admirable, caring, and ethical.
b. Employees’ behavior can be shaped and motivated, not only by rewarding good behavior but also by penalizing bad behavior.
c. Employees need to be discouraged from bad behavior.
d. They work harder when they know that failure has consequences.
Answer:
a. Employees are more loyal and productive if they feel that their leader is admirable, caring, and ethical.
Explanation:
Leadership can be defined as a process which typically involves motivating, encouraging and inspiring employees working under an individual to be innovative and create positive changes that will foster growth and enhance the success of a business firm or company in the future.
A leader can be defined as an individual who is saddled with the responsibility of controlling, managing and maintaining a group of people under him or her. Some types of power expressed by leaders are referent power, legitimate power, coercive power, etc.
Generally, leaders use their powers to get other people to follow them. Some forms of power result from a formalized position in the organization while others are derived from personal characteristics or knowledge.
Basically, when a leader possesses and favors referent power (strong interpersonal relationship skills with subordinates), he or she would have a strong and productive working relationship with his subordinates (employees) because it encourages loyalty.
Hence, employees are more loyal and productive if they feel that their leader is admirable, caring, and ethical.
The phone rings in the next room and the assistant answers it. She tells the caller, "Yes, sir, he is here." After a moment she adds: "He has been here for about five or ten minutes, sir." She soon hangs up, and comes in with your coffee. She tells you that it should not be too much longer and again apologizes. She explains that the CEO stopped at a gas station to call in. She then tells you that the CEO is a bit "old fashioned." "He doesn't really use a cell phone," she says. She turns to leave, but you ask her to have a seat. You have an opportunity here. What should you ask the CEO's personal assistant?
Answer:
The best question to ask the CEO's personal assistant while you are waiting for the CEO is:
Could you tell me about your work environment?
Explanation:
This question will enable you to build rapport with the personal assistant and to learn more about the organization. It will expose the personal assistant's job satisfaction level, the job setting, and social features, including physical conditions for a worker at the organization to fulfill her responsibilities. The question will also expose the general employee feelings of wellbeing, workplace relationships, productivity efficiency, and employee health. It will expose the organization culture, which is an important determinant of organizational success.
What is implication for the Government in the tax policy ?
Answer:
ax policy is the choice by a government as to what taxes to levy, in what amounts, and on whom. It has both microeconomic and macroeconomic aspects. The macroeconomic aspects concern the overall quantity of taxes to collect, which can inversely affect the level of economic activity; this is one component of fiscal policy.
Explanation:
......
Answer:
To meet their expenses, government need income, called "revenue," which it raises through taxes. In our country, governments levy several different types of taxes on individuals and businesses. The Federal Government relies mainly on income taxes for its revenue. State governments depend on both income and sales taxes
Explanation:
The ending inventory of Sandie’s Candies is overstated by $75,000 at December 31, 20x8. What is the effect on 20x8’s net income, assuming that no other inventory errors have occurred during 20x8?
a. $150,000 overstated
b. $75,000 understated
c. no effect
d. $75,000 overstated
Answer:
$75,000 overstated
Explanation:
An overstatement of a year's ending inventory, absent any other errors, will lead to a decrease in Cost of Goods Sold (COGS), and an increase in Net Income.
The March 1 inventory of finished units at the Kay Company is 5,000. During March the company plans to sell 40,000 units and desires a March 31 inventory of 10,000 units. The number of units that the company should plan on producing in March is: A. 60,000 units B. 50,000 units C. 45,000 units D. 40,000 units E. 35,000 units
Answer:
C. 45,000 units
Explanation:
Inventory of finished units at March 31
10,000
Add:
Sales units
40,000
Total units
50,000
Less:
Inventory of finished units March 1
(5,000)
Balance
45,000
Therefore, the number of units that the company should plan on producing in March is 45,000 units
The beta coefficient A stock's contribution to the market risk of a well-diversified portfolio is called risk. According to the Capital Asset Pricing Model (CAPM), this risk can be measured by a metric called the beta coefficient, which calculates the degree to which a stock moves with the movements in the market. Based on your understanding of the beta coefficient, indicate whether each statement in the following table is true or false: Statement True False A stock that is more volatile than the market will have a beta of less than 1.0. Over time, a stock with a beta of 1.0 produces a return that goes up and down with a 1:1 relationship with the return on the market Beta measures the volatility in stock movements relative to the market. There are different ways of calculating the beta coefficient for a stock. Using the information given in the following table, calculate the beta coefficient of Stocki: Data 35.00% 32.00% Stock I's standard deviation Market's standard deviation Correlation between Stock i and the market Beta coefficient of Stock i: 0.65 To calculate the beta of another company, using regression analysis, you get the value of Ra as 0.27. Based on your calculation, which of the following interpretations is true? The percentage of variance in the company's stock explained by the market is lower than that of a typical stock. The percentage of variance in the company's stock explained by the market is higher than that of a typical stock.
Solution :
1. The relevant risk is considered as the "unknown unknowns" which may occur due to the risk in everyday life. In all risky investments, it is unavoidable. The contribution of the stock to the market risk in a well diversified portfolio is called as the relevant risk. Diversification is the main strategy for minimizing the relevant risk.
2.
Statement : A stock that is more volatile than the market will have a beta of less than 1.0.
---- False, as it will be more volatile with that of the market.
Statement : Over time, a stock with a beta of 1.0 produces a return that goes up and down with a 1:1 relationship with the return on the market
---- True as beta of the market is 1 and therefore, the stock beta is also 1.
Statement : Beta measures the volatility in stock movements relative to the market.
--- True. The beta measures all the volatility in the stock moments relative to the market.
3. We know that :
[tex]$\text{Beta= Correlation coefficient} \times \frac{\text{SD of stock}}{\text{SD of market}} $[/tex]
[tex]$=0.65 \times \frac{35}{32}$[/tex]
= 0.71
4. The percentage of the variance in the stock of the company that is explained by the market is lower than that of the typical stock.
Which of the following would not occur as a result of a monopolistically competitive firm suffering a short-run economic loss?
A) The firm could exit the industry in the long run.
B) If the firm does not exit the industry in the long run its demand curve will shift to the left.
C) If the firm does not exit the industry in the long run its demand curve will shift to the right.
D) If the firm remains in the industry in the long run it will break even.
choose "A"
choose "B"
choose "C"
choose "D"
Answer:
B) If the firm does not exit the industry in the long run its demand curve will shift to the left.
Explanation:
This is because the statement "If the firm does not exit the industry in the long run its demand curve will shift to the left, " simply means that if the monopolistic competitive firm stays in a particular industry for long, the firm will experience a situation in which less of the good or service is demanded at every price.
However, this cannot be true because a monopolistic competitive firm produces unique products that tend to have its specific customers. These customers, in the long run, will demand more goods and services of the firms which will be affected positively by a lot of reasons including prices of related goods, increase in salary, better economy at large, etc.
The following units of a particular item were available for sale during the calendar year:
Jan. 1 Inventory 4,000 units at $40
Apr. 19 Sale 2,500 units
June 30 Purchase 4,500 units at $44
Sept. 2 Sale 5,000 units
Nov. 15 Purchase 2,000 units at $46
The firm maintains a perpetual inventory system. Determine the cost of goods sold for each sale and the inventory balance after each sale, assuming the last-in, first-out method.
Answer:
The cost of goods sold for eachs ale and the inventory balance after each sale, assuming the LIFO (last-in, first-out) method:
Cost of goods sold Ending Inventory
Apr. 19 Sale $100,000 $60,000
Sept. 2 Sale $218,000 $40,000
Explanation:
a) Data and Calculations:
Date Description Units Unit Cost Total Balance
Jan. 1 Inventory 4,000 $40 $160,000
Apr. 19 Sale (2,500) (100,000) $60,000
June 30 Purchase 4,500 $44 198,000 258,000
Sept. 2 Sale (5,000) (218,000) 40,000
Nov. 15 Purchase 2,000 $46 92,000 132,000
Cost of goods sold: Ending Inventory
April 19: = 2,500 * $40 = $100,000 = 1,500 * $40 = $60,000
Sept 2: = 4,500 * $44 + 500 * $40 = 1,000 * $40 = $40,000
= $198,000 + $20,000
= $218,000
Imagine that the Brazilian aircraft manufacturer Embraer purchases a 10 percent share of a Canadian aircraft distribution company, in order to facilitate the marketing and sales of its aircraft in Canada. This is an example of
Answer: Forward Integration
Explanation:
Forward integration is a process where a company takes over the control of another company that is further along in the value chain so that it might be able to sell or distribute is goods more effectively. For example, an oil company taking over a petroleum products company.
In this scenario, the Brazilian company purchased a huge part of a company further along in distribution in order to facilitate better sales so this is forward integration.
Arisk-neutral consumer is deciding whether to purchase a homogeneousproduct from one of two firms. One firm produces an unreliable product andthe other a reliable product. At the time of the sale, the consumer is unable todistinguish between the two firmsîproducts. From the consumerîs perspec-tive, there is an equal chance that a given firmîs product is reliable or unreli-able. The maximum amount this consumer will pay for an unreliable productis $0, while she will pay $50 for a reliable product.
a. Given this uncertainty, what is the most this consumer will pay to purchaseone unit of this product?
b. How much will this consumer be willing to pay for the product if the firmoffering the reliable product includes a warranty that will protect the con-sumer? Explain
Answer:
Uncertainty over Reliable and Unreliable Product
a. Given this uncertainty, the most this consumer will pay to purchase one unit of this product is $25
b. The amount that this consumer will be willing to pay for the product if the firm offering the reliable product includes a warranty that will protect the consumer is $50.
c. This is because the stated maximum amount that the consumer is willing to pay for the reliable product is $50. She is not prepared to spend more than this amount on the reliable product.
Explanation:
a) Data and Calculations:
Unreliable Reliable
Maximum amount the consumer will pay $0 $50
Probability of reliability 0.5 0.5
Expected amount to pay for either product $0 $25 ($50 * 0.5)
a. Given this uncertainty, the most this consumer will pay to purchase one unit of this product is $25 ($0 + $25)
Liz has been screened for potential group membership. She fits all criteria; however, she seems to lack the desire to participate. In the eyes of the leader Jacque, she just doesn’t seem to "want" it enough. What should be considered?
Answer:
this should be a factor; the desire to make positive change is deemed highly important
Explanation:
Since in the situation it is mentioned that liz has been screened concering for the membership of the group. She have the lack of participation
So here it could be considered as the factor also the desire that makes the positive changed would be considered as very much significant
So, the above statement should be relevant
Hence, the same should be considered
A local distributor for a national tire company expects to sell approximately 9,530 tires of a certain size and tread design next year. Annual carrying cost is $14 per tire and ordering cost is $72. The distributor operates 286 days a year. a. What is the EOQ
Answer:
the economic order quantity is 313 units
Explanation:
The computation of the economic order quantity is shown below:
= sqrt( 2 ×annual demand × ordering cost) (carrying cost)
= sqrt(2 × 95,30 × $72) ÷ $14
= 313 units
hence, the economic order quantity is 313 units
The same should be considered and relevant
There is a phenomena that worker/capital output has not increased in line with the increased performance capabilities of information technology. What is this phenomena called?
Answer:
The productivity paradox
Explanation:
productivity paradox (can be regarded as the peculiar observation which is made in business analyst process when there is more investment as regards information technology.
It should be noted that the productivity paradox is a phenomena that worker/capital output has not increased in line with the increased performance capabilities of information technology. What is this phenomena
Analysis of Receivables Method At the end of the current year, Accounts Receivable has a balance of $440,000; Allowance for Doubtful Accounts has a credit balance of $4,000; and sales for the year total $1,980,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $14,800.
Required:
a. Determine the amount of the adjusting entry for uncollectible accounts.
b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense.
c. Determine the net realizable value of accounts receivable.
Answer: See explanation
Explanation:
a. The amount of the adjusting entry for uncollectible accounts will be:
= Estimated balance required in Allowance account - Unadjusted balance existing in Allowance account
= $14800 - $4000
= $10800
b. The adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense will be:
Account receivables = $440,000
Allowance for Doubtful accounts = $14,800
Bad Debt expense = $10800
c. The net realizable value of accounts receivable will be:
= Account receivables - Allowance for Doubtful accounts
= $440,000 - $14800
= $425200
MC Qu. 114 Lowden Company has an overhead application... Lowden Company has an overhead application rate of 155% and allocates overhead based on direct material cost. During the current period, direct labor cost is $60,000 and direct materials used cost $90,000. Determine the amount of overhead Lowden Company should record in the current period.
Answer:
the overhead amount recorded is $139,500
Explanation:
The computation of the overhead amount recorded is shown below:
= Overhead application rate × direct material cost
= 155% × $90,000
= $139,500
Hence, the overhead amount recorded is $139,500
We simply applied the above formula so that the correct value could come
____________ is a performance assessment in which companies identify which customers are leaving and measuring the rate at which they are leaving.
Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $350,000 per quarter. The company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows:
Product Selling Price Quarterly Output
A $16 per pound 15,000 pounds
B $8 per pound 20,000 pounds
C $25 per gallon 4,000 gallons
Each product can be processed further after the split-off point. Additional processing requires no special facilities. The additional processing costs (per quarter) and unit selling prices after further processing are given below:
Product Additional Processing Costs Selling Price
A $63,000 $20 per pound
B $80,000 $13 per pound
C $36,000 $32 per gallon
Required:
Which product or products should be sold at the split-off point and which product or products should be processed further?
Answer:
The incremental selling price for product 1 is 60,000, product 2 is 100000 and product 3 is 28,000.
Sell at split off for product 1 is Yes and product 2 is No and product 3 is Yes.
Explanation:
Here,
XYZ Company manufactures a unique device that is used by internet users to boost Wi-fi signals. The following data relates to the first month of operation:
Beginning inventory 0 units
Units produced 40,000 units
Units sold 35,000 units
Selling price $120 per unit
Marketing and administrative expenses
Variable marketing and administrative expenses per unit $4
Fixed marketing and administrative expenses per month $1,120,000
Manufacturing costs
Direct materials cost per unit $30
Direct labor cost per unit $14
Variable manufacturing overhead cost per unit $4
Fixed manufacturing overhead cost per month $1,280,000
Using the information given, above:
a. Calculate unit product cost under the variable costing method and the absorption costing method.
b. Prepare an Income Statement under the variable costing method, as well as the absorption costing method.
c. Prepare a schedule to reconcile the net operating income under the variable and absorption costing methods
Answer:
XYZ Company
a. Unit product cost under:
1. variable costing method
Direct materials cost per unit $30
Direct labor cost per unit $14
Variable manufacturing overhead cost per unit $4
Variable marketing and administrative expenses per unit $4
Total variable cost $52
2. absorption costing method:
Direct materials cost per unit $30
Direct labor cost per unit $14
Variable manufacturing overhead cost per unit $4
Fixed manufacturing overhead cost $32 ($1,280,000/40,000)
Total product cost per unit $80
b1. Income Statement under the variable costing method
Sales revenue $4,200,000 ($120 * 35,000)
Cost of goods sold:
Variable cost of goods sold 1,680,000 ($48 * 35,000)
Variable marketing and admin 140,000 ($4 * 35,000)
Total cost of goods sold 1,820,000
Contribution margin $2,380,000
Fixed expenses:
Fixed marketing and
administrative expenses $1,120,000
Fixed manufacturing overhead 1,280,000
Total fixed expenses $2,400,000
Net operating loss $20,000
b2. Income Statement under the absorption costing method
Sales revenue $4,200,000 ($120 * 35,000)
Cost of goods sold:
Variable cost of goods sold 1,920,000 ($48 * 40,000)
Fixed manufacturing overhead 1,280,000
Less Ending inventory (400,000)
Total cost of goods sold 2,800,000
Contribution margin $1,400,000
Period expenses:
Marketing and Administrative:
Fixed $1,120,000
Variable 140,000 $1,260,000
Net operating income $140,000
c. Schedule to reconcile the net operating income under the variable and absorption costing methods:
Net operating income under absorption = $140,000
Fixed cost absorbed in ending inventory = 160,000 ($32 * 5,000)
Net operating loss under variable = ($20,000)
Explanation:
a) Data and Calculations:
Beginning inventory 0 units
Units produced 40,000 units
Units sold 35,000 units
Ending inventory 5,000 units
Selling price $120 per unit
Marketing and administrative expenses:
Variable marketing and administrative expenses per unit $4
Fixed marketing and administrative expenses per month $1,120,000
Manufacturing costs:
Direct materials cost per unit $30
Direct labor cost per unit $14
Variable manufacturing overhead cost per unit $4
Fixed manufacturing overhead cost per month $1,280,000
Global institutions are needed to _____. Multiple choice question. shift economic power away from national governments prevent firms from offshoring their production activities stabilize and monitor the global marketplace promote the raising of barriers to cross-trade and investment
Answer:
stabilize and monitor the global marketplace
Explanation:
In simple words, global institutions are the organisations that work for the regulation and monitoring of certain activities all around the world. International monetary fund and International labor authority are two of the prime examples of such institutions.
In respect of market place, the primary goal of such institutions is to stabilize the market place so that it can run more efficiently.
On January 1, 2017, ARC Inc. issued 100 5-year bonds, with a face value of $1,000 each and a coupon rate of 10%, payable semiannually. The interest is paid on June 30 and December 31 of each year. The market rate of interest at the time that the bonds were issued was 13%, so that the bonds were sold for $892 each.1. Interest expense for the January 1–June 30 period was $_____.
2. Interest expense for the July1–December 31 period was $_____.
3. Book value of Bonds on June 30 was $_____.
4. Book value of Bonds on December 31 was $_____.
5. Interest payment on June 30 was $_____.
Answer:
ARC Inc.
1. Interest expense for the January 1–June 30 period was $__5,798___.
2. Interest expense for the July 1–December 31 period was $__5,850___.
3. Book value of Bonds on June 30 was $__89,998___.
4. Book value of Bonds on December 31 was $__90,848___.
5. Interest payment on June 30 was $__5,000___.
Explanation:
a) Data and Calculations:
January 1, 2017:
Face value of issued bonds = $100,000 ($1,000 * 100)
Coupon rate of interest = 10%
Effective rate of interest = 13%
Price of issued bonds = $89,200 ($892 * 100)
Discount on bonds = $10,800 ($100,000 - $89,200)
Interest payment = June 30 and December 31 (semiannually)
June 30:
Interest expense = $5,798 ($89,200 * 6.5%)
Cash payment = $5,000 ($100,000 * 5%)
Amortization of discount = $798
Value of bonds = $89,998 ($89,200 + $798)
December 31, 2017:
Interest expense = $5,850 ($89,998 * 6.5%)
Cash payment = $5,000 ($100,000 * 5%)
Amortization of discount = $850
Value of bonds = $90,848 ($89,998 + $850)
Eric receives a portion of his income from his holdings of interest-bearing U.S. government bonds. The bonds offer a real interest rate of 4.5% per year. The nominal interest rate on the bonds adjusts automatically to account for the inflation rate. The government taxes nominal interest income at a rate of 10%. The following table shows two scenarios: A low-inflation scenario and a high- inflation scenario. Given the real interest rate of 4.5% per year, find the nominal interest rate on Eric's bonds, the after-tax nominal interest rate, and the after-tax real interest rate under each inflation scenario. Inflation Rate Real Interest Nominal Interest After-Tax After-Tax (Percent) Rate Rate Nominal Interest Rate Real Interest (Percent) (Percent) (Percent) (Percent)2.0 4.5 7.0 4.5Compared with higher inflation rates, a lower inflation rate will_________ nominal interest income. This tends to_________ the after-tax real interest rate when the government taxes saving, thereby________ the quantity of investment in the economy and________ the economy's long-run growth rate.
Solution :
Given :
The bonds offer a [tex]\text{real interest rate}[/tex] of 4.5% per year
Tax rate = 10% = 0.10
Inflation rate = 2
[tex]\text{Nominal interest rate}[/tex] = [tex]\text{real interest rate}[/tex] + [tex]\text{inflation rate}[/tex]
[tex]\text{Nominal interest rate}[/tex] = 2 + 4.5
= 6.5
[tex]\text{After tax nominal rate}[/tex] = [tex]\text{Nominal interest rate}[/tex] [tex]$\times (1-\text{tax rate})$[/tex]
[tex]\text{After tax nominal interest rate}[/tex] = [tex]$6.5 \times (1-0.10)$[/tex]
[tex]$=6.5 \times 0.90$[/tex]
= 5.85
After tax real interest rate = [tex]\text{after tax nominal rate}[/tex] - [tex]\text{inflation rate}[/tex]
= 5.85 - 2.0
= 3.85
[tex]\text{Inflation rate}[/tex] = 7.0
[tex]\text{Real interest rate = 4.5}[/tex]
[tex]\text{Nominal interest rate}[/tex] = [tex]\text{real interest rate}[/tex] + [tex]\text{inflation rate}[/tex]
= 7 + 4.5
= 11.5
[tex]\text{After tax nominal interest rate}[/tex] = [tex]\text{Nominal interest rate}[/tex] [tex]$\times (1-\text{tax rate })$[/tex]
[tex]$=11.5 \times (1 - 0.10)$[/tex]
[tex]$=11.5 \times 0.90$[/tex]
= 10.35
[tex]\text{After tax nominal interest rate}[/tex] = 11.5 x (1 - 0.10)
= 11.5 x 0.90
= 10.35
[tex]\text{After tax nominal interest rate}[/tex] = [tex]\text{after tax nominal rate}[/tex] - [tex]\text{inflation rate}[/tex]
= 10.35 - 7.0
= 3.35
Putting all the value in table :
[tex]\text{Inflation rate}[/tex] Real interest Nominal interest After tax nominal After tax
rate rate interest rate interest rate
2.0 4.5 6.5 5.85 3.85
7.0 4.5 11.5 10.35 3.35
Comparing with the [tex]\text{higher inflation rate}[/tex], a [tex]\text{lower inflation rate}[/tex] will increase the after after tax real interest rate when the government taxes nominal interest income. This tends to encourage saving, thereby increase the quantity of investment in the economy and the increase the economy's long-run growth rate.