Answer: (B) New market segment
Explanation:
The new market segment strategy is one of the type business strategy that helps in increase the growth of an organization by developing the various types of market segments with some unique characteristics and features for the products and the services.
The main objective of the new market segment strategy is that it helps in variation in the marketing process, products and in the distribution process.
According to the given question, the Starbucks is introduced the Tazo tea in their menu and the main aim of the company is to bring the new customer. Therefore, The Starbucks is using the new market segment strategy.
Therefore, Option (B) is correct answer.
Functional structures are usually found in organizations where there___________.
a. is no vertical integration.
b. is a single or closely related product.
c. exists a strong need to decentralize decision making.
d. are unrelated service offerings.
Answer:
The answer is b. is a single or closely related product.
Explanation:
A functional structure divides the organization into departments based on their function. Each is headed by a functional manager and employees are grouped as per their role. Most small industries with only a few products use this structure. The employees are highly skilled due to repetitive work which means high efficiency and the best performance.
Answer:
The correct answer is letter "B": is a single or closely related product.
Explanation:
Functional structures are those with top-down hierarchy where employees are provided with duties according to their skills and knowledge. These companies are characterized by massive manufacturing, thus, they need each department to specialize in a given task.
On February 18, 2021, Union Corporation purchased 600 IBM bonds as a long-term investment at their face value for a total of $600,000. Union will hold the bonds indefinitely, and may sell them if their price increases sufficiently. On December 31, 2021, and December 31, 2022, the market value of the bonds was $580,000 and $610,000, respectively. Required: 2. & 3. Prepare the adjusting entry for December 31, 2021 and 2022.
Answer:
Adjusting Entry for decrease in Fair Value of $20,000 from $600,000 to $580,000 on December 31, 2021
Dr Unrealized Loss on Investment (Other Comprehensive Income) $20,000
Cr Investment (Fair Value Adjustment) $20,000
Adjusting Entry for increase in Fair Value of $30,000 from $580,000 to $610,000 on December 31, 2022
Dr Investment (Fair Value Adjustment) $30,000
Cr Unrealized Gain on Investment (Other Comprehensive Income) $30,000
Explanation:
This investment will be classified as "Available for Sale" as the anticipated sale date is not within the next 12 months. Available for sale long-term investments are recorded at cost when purchased and subsequently adjusted to reflect their fair values at the end of each reporting period. Unrealized holding gains or losses are kept as "other comprehensive income" until the long-term investment has been sold.
It will not be classified as "Held to Maturity Investment" as Union Corporation does not intends to keep this investment until maturity and may sell them if its price increases sufficiently.
Suppose you invested $60 in the Ishares Dividend Stock Fund (DVY). It paid a dividend of $0.70 today and then you sold it for $65. What was your return on the investment? A) 8.25% B) 9.00% C) 9.50% D) 9.75%
Answer:
C) 9.50%
Explanation:
Given that
The sale price of a share = $65
Purchase price of share = $60
And, the dividend received = $0.70
So, The formula and the computation of the return on investment is shown below:
Return on investment = (Sale price of a share - purchase price of share + dividend received) ÷ (Investment price) × 100
= ($65 - $60 + $0.70) ÷ ($60) × 100
= ($5.70) ÷ ($60) × 100
= 9.50%
.Balance of Work in Process and Finished Goods, Cost of Goods Sold Derry Company uses job-order costing. At the end of the month, the following information was gathered: Job # Total Cost Complete? Sold? 301 $1,600 Yes No 302 1,240 Yes Yes 303 780 No No 304 2,300 Yes No 305 4,150 Yes No 306 350 No No 307 710 Yes Yes 308 620 No No 309 1,200 No No 310 515 No No The beginning balance of Finished Goods was $300, consisting of Job 300, which was not sold by the end of the month.Required:1. Calculate the balance in Work in Process at the end of the month.$2. Calculate the balance in Finished Goods at the end of the month.$3. Calculate Cost of Goods Sold for the month.$
Answer:
1. $3,465
2. $1,950
3. $8,050
Explanation:
The computation is shown below:
1. The balance in Work in Process at the end of the month is shown below:
= Job 303 + Job 306 + Job 308 + Job 309 + Job 310
= $780 + $350 + $620 + $1,200 + $515
= $3,465
2. The balance in Finished Goods at the end of the month is shown below:
= Job 302 + Job 307
= $1,240 + $710
= $1,950
3. The Cost of Goods Sold for the month is given below:
= Job 301 + Job 304 + Job 305
= $1,600 + $2,300 + $4,150
= $8,050
Final answer:
The balance in Work in Process at the end of the month is $3,465. The balance in Finished Goods at the end of the month is $8,050. The Cost of Goods Sold for the month is $4,050.
Explanation:
To calculate the balance in Work in Process at the end of the month, we need to sum up the costs of all the jobs that are not complete. The cost of each job is given in the table, so we can add up the costs for Job 303, Job 306, Job 308, Job 309, and Job 310. The total cost in Work in Process is the sum of these costs: $780 + $350 + $620 + $1,200 + $515 = $3,465.
To calculate the balance in Finished Goods at the end of the month, we need to sum up the costs of all the jobs that are complete and not sold. The cost of each job is given in the table, so we can add up the costs for Job 301, Job 304, and Job 305. The total cost in Finished Goods is the sum of these costs: $1,600 + $2,300 + $4,150 = $8,050.
To calculate the Cost of Goods Sold for the month, we need to sum up the costs of all the jobs that are complete and sold. The cost of each job is given in the table, so we can add up the costs for Job 302, Job 307, and Job 313. The total Cost of Goods Sold is the sum of these costs: $1,240 + $710 + $2,100 = $4,050.
Which of the following sentences with internal sentence interrupters use correct punctuation? Check all that apply. The VP of finance, not the CFO, works with the departmental managers to develop internal budgets. The management team discussed implementing an intranet system that included a secure chat function. Our graduates, having had two full semesters of workplace communication, always do well in the job market. Consequently they lost control of the situation. Precipice Financial’s hedge fund which produces extremely high returns includes very risky investments.
Answer:
The correct answer is The VP of finance, not the CFO, works with the departmental managers to develop internal budgets. and Our graduates, having had two full semesters of workplace communication, always do well in the job market.
Explanation:
We use the sentence interruoters to indicate information that is not relevant to the sentence. This information, not being important, must be separated by two commas.
What is inside the comma should not interfere with the final meaning of the sentence and its understanding. We could remove that part and the sentence should continue to make sense.
In this case we have the following sentences:
The VP of finance, not the CFO, works with the departmental managers to develop internal budgets.
Our graduates, having had two full semesters of workplace communication, always do well in the job market.
Let's see what happens if we remove what is located between the commas:
The VP of finance works with the departmental managers to develop internal budgets.
Our graduates always do well in the job market.
As we can see, both sentences still make sense, which indicates that this information was not relevant and was well punctuated by being located between two commas.
Final answer:
Two sentences correctly use punctuation with internal sentence interrupters, demonstrating the importance of proper punctuation in conveying clear and precise meaning and they are The VP of finance, not the CFO, works with the departmental managers to develop internal budgets and Our graduates, having had two full semesters of workplace communication, always do well in the job market.
Explanation:
Of the provided sentences, two use correct punctuation with internal sentence interrupters:
The VP of finance, not the CFO, works with the departmental managers to develop internal budgets.Our graduates, having had two full semesters of workplace communication, always do well in the job market.Correct punctuation around internal sentence interrupters is crucial for conveying the intended meaning precisely and clearly. Internal interrupters such as non-essential clauses, appositives, and parenthetical elements should be separated from the main clause by commas or other proper punctuation to avoid confusion or misinterpretation. In the provided examples, these elements are appropriately offset with commas to maintain the clarity of the sentences.
Bank Management Printers Inc. produces luxury checkbooks with three checks and stubs per page. Each checkbook is designed for an individual customer and is ordered through the customer's bank. The company's operating budget for September 2014 includes this data:
Number of Checkbooks: 15,000
Selling Price per book: $20
Variable cost per book: $8
Fixed costs for the month: $145,000
The actual results for September 2015 were as follows:
Number of Checkbooks: 12,000
Selling Price per book: $21
Variable cost per book: $7
Fixed costs for the month: $150,000
1. Prepare a static-budget based variance analysis of the September performance
2. Prepare a flexible budget based variance analysis of the September performance
3. Why might Bank Management find the flexible budget based variance analysis more informative than the static budget based variance analysis?
The static budget variance analysis for September reveals unfavorable sales, variable, and fixed cost variances because it compares the actual results with the original budget. The flexible budget variance analysis, which adjusts the budget according to the actual volume of output, reveals more favorable variances in sales and variable costs but still an unfavorable fixed cost variance. Flexibility in budget variance analysis is crucial as it isolates management's control from volume fluctuations.
Explanation:1. Static-budget variance analysis compares the actual results with the original budget (September 2014), irrespective of the volume of output:
Sales Variance: (Actual unit sold * Actual price) - (Budgeted unit sold * Budgeted price) = (12,000* $21) - (15,000 * $20) = -$9,000 Variable Cost Variance: (Actual unit sold * Actual variable cost) - (Budgeted unit sold * Budgeted cost) = (12,000* $7) - (15,000 * $8) = +$6,000 Fixed Cost Variance: Actual fixed cost - Budgeted fixed cost = $150,000 - $145,000 = +$5,000
2. A flexible budget adjusts the budget according to the actual volume of output. It would calculate:
Sales Variance: (Actual unit sold * Actual price) - (Actual unit sold * Budgeted price) = (12,000* $21) - (12,000 * $20) = +$12,000 Variable Cost Variance: (Actual unit sold * Actual variable cost) - (Actual unit sold * Budgeted cost) = (12,000* $7) - (12,000 * $8) = +$12,000 Fixed Cost Variance: Actual fixed cost - Budgeted fixed cost = $150,000 - $145,000 = +$5,000
3. The flexible budget variance analysis might be more informative because it adjusts for changes in volume. This flexibility can provide a more accurate assessment of management performance, isolating the effect of volume fluctuations from management's control over costs and revenues.
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What two factors inhibit the ability of rivals to imitate a firm's most valuable resources and capabilities?
Answer:
I think the most applicable answers are,
*The possession of expertise, knowledge and skills that the competitors do not possess
*Having the access to unique resources and legal protections (such as patent rights)
Explanation:
When you have the intellectual and skill.capacity to harness the maximum out of a Resource and that it is a unique one, then the competition have one way to imitate you.
Moreover, once you have the legal protection and/or the exclusive access to a certain resource or to a technology, then the competitors can't imitate you as well.
You just paid $360,000 for a policy that will pay you and your heirs $13,200 a year forever. What rate of return are you earning on this policy?
Answer:
Rate of return = 3.667%
Explanation:
This is a for of annuity known as perpetuity. Am annuity is an investment that gives yearly returns on the capital
To get the rate of return we use the following formula
Present value= Yearly payments/Rate of return
360,000= 13,200/rate of return
Cross-multiply
Rate of return (360,000)= 13,200
Rate of return= 13,200/360,000
Rate of return= 0.03666666= 3.667%
Answer:
= 3.67%. This means you are to earn at 3.67% on the policy taken
Explanation:
The question is to determine the rate of return of earnings based on the detailed policy.
Rate of Return
This represents a percentage of any investment that can either be a gain or a loss as calculated based on a particular time period. The Rate of Return can simply be called the RoR.
The Rate of Return in the question is calculated as follows:
First, what is the payment for the policy = $360,000
What is the annuity to be paid a year forever = $13,200
Therefore rate of return is simply
= Annuity/ Initial Policy Payment
= $13,200/ $360,000 x 100
= 3.67%. This means you are to earn at 3.67% on the policy taken
Which of the following help departments organize unique access controls for access to folders and data files within a department or group so that only those employees who need access to confidential data are granted access?
Answer:
D) Role Based Access Controls
Explanation:
First, the multiple options to the question are as follows:
A) Title-based access controls
B) Role-based access controls
C) Administrative access controls
D) Privacy-based access controls
The Role Based Access Controls (RBAC) represents a network access restricting method that only allows the right employee in an organisation to access information that are relevant to their roles, jobs and responsibilities.
The goal is also to ensure that they don't have access to sensitive information that they do not need to be concerned with. In a situation where employees want access to restricted data, formal application will be made and top management will review whether the information requested can be released or not.
Hierarchical authority is a system that can organize unique access controls for departments or groups to ensure that only those who need access to confidential data have it. This system is used in various organizations, such as the Department of Justice.
Explanation:In the context of organizing unique access controls to folders and data files, the option that makes the most sense is Hierarchical authority (option a). Hierarchical authority within a system designates who has access to specific information, such as confidential data. In a department or group, it ensures that access to specific resources is restricted to only those who need it.
This kind of access control is often seen in departmental structures within organizations. For instance, in the Department of Justice, different levels of authority, such as the attorney general, associate attorney general, bureau and division heads, each have different levels of access to information. This hierarchical structure extends to numerous levels within the organization, enabling an efficient deployment of resources and information.
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Flint corporation reported net income of 391320 in 2017 and had 206000 shares of common stock outstanding throughout the year. Also oustanding all year were 570000 options to purchase common stock at 12 per share. The average market price of the stock druing the year was 15. Compute diluted earnings per share.
Answer:
$1.23
Explanation:
The computation of the diluted earnings per share is shown below:
Diluted earning per share = Net income ÷ weighted number of common stock outstanding
where,
Net income is $391,320
Weighted average number of outstanding shares equal to
= 206,000 shares + 114,000 shares
= 320,000 shares
The 114,000 shares is
= 570,000 ÷ $15 × $12
= 456,000
Now 570,000 - 456,000 = 114,000 shares
So, the diluted earning per share
= $391,230 ÷ 320,000 shares
= $1.23
The best new product ideas are based on _____, which serve as the heart of the concept generation process. channel desires manufacturing efficiencies profit goals customer problems
Answer:
customer problems
Explanation:
Customer problems -
The problems of the consumers are the main aspect by which the idea about any new product can be laid down .
As the likes and dislikes for the particular product , makes the product a hit or miss .
As if the consumers like the goods and service s, the production of the product would increase an msd the profit earned by the company will also increase , and vice versa .
Hence , from the given statement of the question,
The correct option is customer problems.
An increase in the price of a good will a. increase supply. b. decrease supply. c. increase quantity supplied. d. decrease quantity supplied.
Answer: c. Increase in quantity supplied.
Explanation: an increase in the price of a good would lead to an increase in the quantity of the good supplied. This follows the fundamental economic theory of supply or the law of supply which states that all else being equal, an increase in the price of good and services would lead to a corresponding increase in the quantity of the good or services supplied. This is quite true and the rationale behind it is the potential increase in returns per unit of good sold to the supplier as a result of the increase in price.
An increase in price of a good will increase the quantity supplied. This is because producers find it more profitable to sell the good at higher prices. However, it does not alter the overall supply of the good, which is determined by other factors.
Explanation:The key to understanding this question lies in the difference between the supply and quantity supplied. In simple terms, 'supply' refers to the amount of goods that producers are willing and able to sell at all possible prices, whereas 'quantity supplied' refers to the amount of goods that producers are willing and able to sell at a specific price.
When the price of a good increases, the quantity that producers are willing and able to sell also increases. This is because at higher prices, it becomes more profitable for producers to make and sell the good, hence they would choose to sell more. Therefore, an increase in price of a good will increase quantity supplied. However, it does not change the overall supply of a good; the supply is determined by other factors such as costs of production, technology, and expectations about future prices.
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Which of the following was likely one of Disney’s considerations when determining its marketing concept? a. Do our customers want to see junk food advertisements on our channels and Web sites? b. What does Congress think of junk food advertisements? d. How do our television shows and Web sites compare to our competition? 1.
If Disney allowed customers to choose which types of advertising they saw on its Web sites, it would be engaging in: a. realistic pricing. b. co-creation. c. offering products that perform.
Disney customers’ evaluations of the company’s Web sites and television channels in terms of whether those products meet their needs and expectations is called: a. customer gratification. b. customer fulfillment. c. customer satisfaction.
Which of the following describes a Disney customer service representative who has been given the authority to respond to a complaint about junk food advertisement by pulling the advertisement in question and flagging it for review by Disney’s marketing team? a. The employee is empowered. b. The employee is working in a teamwork-oriented environment. c. The employee is operating under a sales orientation.
Who at Disney needs to both be aware of and understand the company’s decision to impose strict junk food advertising rules? a. The CEO only. b. The Marketing Team only. c. Every businessperson at the company
According to the given questions, the answers are presented in the same order as of questions.
What are the marketing determinants of Disney's?Option a is the correct answer.
Disney’s considerations when determining its marketing concept was about to see whether customers want to see junk food advertisements on our channels and Web sites.
What type of advertising should Disney engage in?Option b is the correct answer.
Disney allowed customers to choose co-creation as the type of advertising to be engaged in its Websites.
What were Disney customers’ evaluations?Option c is the correct answer.
Disney customers’ evaluations of the company’s Web sites and television channels in terms of whether those products meet their needs and expectations is called customer satisfaction.
Which describes Disney's customer service?Option a is the correct answer.
Because Disney's employees are empowered, a Disney customer service representative has been given the authority to respond to a complaint about a junk food advertisement by pulling the ad in question and flagging it for review by Disney's marketing team.
Who imposed the rules?Option c is the correct answer.
Every businessperson at Disney needs to be aware of and comprehend the company's decision to adopt rigorous junk food advertising guidelines.
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Rousey, Inc., had a cash flow to creditors of $16,965 and a cash flow to stockholders of $7,559 over the past year. The company also had net fixed assets of $49,705 at the beginning of the year and $57,130 at the end of the year. Additionally, the company had a depreciation expense of $12,252 and an operating cash flow of $51,136.
What was the change in net working capital during the year?
Answer:
$6,935
Explanation:
Cash flow from assets:
= Cash flow to creditors + Cash flow to shareholders
= $16,965 + $7,559
= $24,524
Cash flow from financial assets = Operating cash flow - Net capital spending - Change in working capital
$24,524 = $51,136 - ($57,130 - $49,705 + $12,252) - Change in working capital
$24,524 = $51,136 - $19,677 - Change in working capital
$24,524 = $31,459 - Change in working capital
Change in working capital = $31,459 - $24,524
= $6,935
Note:
Net capital spending = Net fixed assets at the end - Net fixed assets at the beginning + Depreciation expense
Final answer:
To calculate the change in net working capital for Rousey, Inc., the given financial details were leveraged, revealing a change of $6,935 over the year.
Explanation:
To determine the change in net working capital for Rousey, Inc., during the year, we use the provided financial metrics. First, it's important to understand that net working capital is the difference between a company's current assets and current liabilities. The formula for calculating the change in net working capital is not directly given, but we can infer it through another approach by utilizing the information given on cash flow.
The formula for net investment in fixed assets is:
Net Investment in Fixed Assets = Ending Net Fixed Assets - Beginning Net Fixed Assets + DepreciationApplying the numbers:
Net Investment in Fixed Assets = $57,130 - $49,705 + $12,252 = $19,677Then, using the formula for cash flow from assets, which is:
Cash Flow from Assets = Operating Cash Flow - Net Investment in Fixed Assets - Change in Net Working CapitalWhen rearranged to solve for the change in net working capital, it becomes:
Change in Net Working Capital = Operating Cash Flow - Net Investment in Fixed Assets - Cash Flow to Creditors - Cash Flow to StockholdersPlugging in the values:
Change in Net Working Capital = $51,136 - $19,677 - $16,965 - $7,559 = $6,935Therefore, the change in net working capital for Rousey, Inc., during the past year was $6,935.
Rahul needs a loan and is speaking to several lending agencies about the interest rates they would charge and the terms they offer. He particularly likes his local bank because he is being offered a nominal rate of 10%. But the bank is compounding bimonthly (every two months). What is the effective interest rate that Rahul would pay for the loan?
a. 10.603% b. 10.426% c. 10.609% d. 10.285%
Answer:
b. 10.426%
Explanation:
Using the attached formula, convert the nominal rate to effective annual rate
m in the formula is the number of compounding periods per year; 12/2 = 6 in this case.
APR is the nominal rate which is 10%.
Next, plug in the numbers to the formula as shown below;
EAR = [tex][1+\frac{0.10}{6}]^{6} -1[/tex]
EAR = 1.10426-1
EAR = 0.10426 or 10.426% as a percentage
Hence choice B is correct.
The effective interest rate for the loan is 10.603% . To calculate the effective interest rate for a loan with a nominal rate of 10% compounded bimonthly, we can use the formula.
Explanation:To calculate the effective interest rate for a loan with a nominal rate of 10% compounded bimonthly, we can use the formula:
Effective Interest Rate = (1 + (Nominal Interest Rate / Number of Compounding Periods))^Number of Compounding Periods - 1
In this case, the nominal interest rate is 10% and the compounding is done bimonthly, which means there are 6 compounding periods in a year. Plugging these values into the formula, the effective interest rate is:
Effective Interest Rate = (1 + (0.10 / 6))^6 - 1 = 0.10603 or 10.603%
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The present value of a stream of cash flows is just the sum of the present values of each individual cash flow. True False
Answer:
True
Explanation:
In order to find the Present value of multiple cash flows, each cash flow must be discounted to a same point in time and then added together.
Present Value
= (Cash flow 1)/(1 + r)^t1 + (Cash flow 2)/(1 + i)^t2 + (cash flow 3)/(1+i)^t3...... + (Cash flow N)/(1+i)^n
Therefore, The statement is True.
The present value of a stream of cash flows is the sum of the present values of each individual cash flow. This is a common principle in financial mathematics often referred to as the principle of value additivity. Each cash flow is discounted to its present value individually, and then these values are added together.
Explanation:The statement that the present value of a stream of cash flows is just the sum of the present values of each individual cash flow is indeed true. In financial mathematics, this principle is often referred to as the principle of value additivity. Essentially, when calculating the present value of multiple cash flows, each cash flow is discounted to its present value, and then these values are added together. This results in the total present value of the stream of cash flows. For instance, if we have a stream of cash flows of $1000 in one year, and another $1000 in two years, and we're discounting at a rate of 5%, we would calculate the present value of each cash flow individually and then sum them up. The present value of the cash flow in one year would be $1000/(1+0.05) = $952.38, and the present value of the cash flow in two years would be $1000/(1+0.05)^2 = $907.03. Summing these up gives a total present value of $952.38 + $907.03 = $1859.41.
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Kennedy Company reports the following costs and expenses in May. Factory utilities $ 13,500 Direct labor $79,100 Depreciation on factory Sales salaries 48,400 equipment 12,650 Property taxes on factory Depreciation on delivery trucks 3,800 building 2,500 Indirect factory labor 48,900 Repairs to office equipment 1,300 Indirect materials 70,800 Factory repairs 2,000 Direct materials used 157,600 Advertising 23,000 Factory manager's salary 8,000 Office supplies used 2,640 Instructions From the information, determine the total amount of: (a) Manufacturing overhead. (b) Product costs. (c) Period costs.
Answer:
(a) $158,350
(b) $395,050
(c) $79,140
Explanation:
(a) Manufacturing overhead:
= Factory utilities + Depreciation on factory equipment + Indirect factory labor + Indirect materials + Factory manager's salary + Property taxes on factory building + Factory repairs
= $ 13,500 + $12,650 + 48,900 + 70,800 + 8,000 + 2,500 + 2,000
= $158,350
(b) Product costs:
= Total Manufacturing overhead + Direct material used + Direct labor
= $158,350 + $157,600 + $79,100
= $395,050
(c) Period cost:
= Depreciation on delivery truck + Sales salaries + Repairs to office equipment + Advertising + Office supplies used
= 3,800 + 48,400 + 1,300 + 23,000 + 2,640
= $79,140
The total amount of manufacturing overhead is $139,850. The product costs total $236,700. The period costs amount to $84,140.
Explanation:To determine the total amount of manufacturing overhead, we need to add up all the indirect costs associated with the factory. These include factory utilities, indirect factory labor, indirect materials, depreciation on factory equipment, property taxes on the factory building, and factory repairs. Adding up these costs gives us a total of $139,850.
The product costs include direct labor, direct materials, and manufacturing overhead. So to calculate the product costs, we need to add these three amounts together. Direct labor is $79,100 and direct materials used is $157,600. Adding these two amounts gives us a total of $236,700. Finally, to determine the period costs, we need to sum up all the non-manufacturing expenses, which include sales salaries, advertising, repairs to office equipment, office supplies used, and the factory manager's salary. These costs add up to $84,140.
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RST Company produces a product that has a variable cost of $6 per unit. The company's fixed costs are $30,000. The product sells for $10 per unit. RST desires to earn a profit of $20,000. The contribution margin per unit is $
Answer:
$4
Explanation:
Contribution margin is the difference between sales and variable cost. As such, the contribution margin per unit is the difference between the sales per unit and the variable cost per unit.
Given that
variable cost per unit = $6
Selling price per unit = $10
The contribution margin per unit is
= $10 - $67
= $4
Look at Exercise 19.2. Compute the opportunity costs of producing sweaters and wine in both France and Tunisia. Who has the lowest opportunity cost of producing sweaters and who has the lowest opportunity cost of producing wine? Explain what it means to have a lower opportunity cost.
Answer:
Answer Illustration : Opportunity Cost of producing Wine is lesser in France, Opportunity Cost of producing Sweaters is lesser in Tunisia. So, France has comparative advantage in Wine, Tunisia in Sweater.
Explanation:
Opportunity Cost is the cost of next best alternative foregone while choosing an alternative.
Opportunity Cost of producing Sweaters & Wine in France & Tunisia are quantities of other goods (Sweaters or Tunias) sacrifised while choosing either. Sweater Opportunity Cost - Wines sacrifised, Wine Opportunity Cost - Sweaters sacrifised.
The country has a comparative advantage in a good if it can produce it with relatively less opportunity cost (in terms of other good sacrifised) than other country.
Ex : Production Possibilities
Wine Sweater Trade off (Wine :Sweater)
France 10 5 1:0.5 or 2:1
Tunisia 8 24 1:3 or 0.33:1
France produces Wine with lesser opportunity cost (sweater sacrifised) than Tunisia [0.5 sweater < 3 sweaters] ; it has comparative advantage in Wine. Tunisia produces Sweater with less opportunity cost (wine sacrifised) than France [ 0.33 wine < 2 wines] ; it has comparative advantage in TunisiaThe Green Machine Manufacturing Company has the option to make or buy a component part for one of its lawnmowers. The annual requirement is 30,000 units. A supplier is able to supply the parts for $12.00 per piece. Green Machine estimates that it will cost $1,000 to prepare the contract with the supplier. To make the parts in-house, Green Machine must invest $100,000 in capital equipment. They estimate it will cost $8.50 per piece to produce the part in-house.
1. Carry all calculations out to two decimal places.
A. What is the breakeven quantity?
B. What is the total cost at the breakeven point?
C. What is the cost savings from making the correct decision?
Classify the given goods according to whether or not they would be included in calculating the GDP for the United States. All goods should be placed. If a country is not specified, you can assume the action is performed in the United States.
Answer:
ITEMS TO BE INCLUDED IN THE GDP
1. Honda;s assembly and sales of cars in the U.S.
2. Old Navy Purchases mannequins to display clothes
ITEMS NOT TO BE INCLUDED IN THE GDP OF THE UNITED STATES
1. GM's Assembly and sales of cars in Mexico
2.Resale of used textbooks to college students
3. Ocean spray purchases plastic to make bottles
4. Sales of wheat to Mrs. Baird's Bakery
Explanation:
Completion of the Question is as follows:
The following should be placed into two groups: Group A represents items to be included in the GDP of the U.S and Group B represents items not be included in the GDP of the U.S.
The Items are as follows:
GM's Assembly and sales of cars in Mexico
Old Navy Purchases mannequins to display clothes
Resale of used textbooks to college students
Ocean spray purchases plastic to make bottles
Honda;s assembly and sales of cars in the U.S.
Sales of wheat to Mrs. Baird's Bakery
Solution
Gross Domestic Product (GDP)
The GDP of a nation is the measure of the market value all finished products, goods and services manufactured or rendered within the borders of a particular country and within a period of time usually one year.
This means that any good produced in another country for instance Germany will not be included in the GDP of the United States. Also, GDP considers only finished goods, hence, intermediate or raw materials for finished goods will also not be included in the GDP calculation.
Based on the explanation, the classification is as follows
ITEMS TO BE INCLUDED IN THE GDP
1. Honda's assembly and sales of cars in the U.S. - The cars were assembled in the United States which is a part of production, hence, they qualify for GDP calculation
2. Old Navy Purchases mannequins to display clothes- The Mannequins were bought as a company's finished products and will not be used to produce any new product. They are already in their finished form
ITEMS NOT TO BE INCLUDED IN THE GDP OF THE UNITED STATES
1. GM's Assembly and sales of cars in Mexico- General Motors assembled the cars in Mexico and this does not qualify as manufactured in the United States.
2.Resale of used textbooks to college students- The textbooks were already calculated for GDP in their year of production, hence, a resale value will not qualify for GDP calculation
3. Ocean spray purchases plastic to make bottles - The plastic purchased represent intermediate goods for further processing of bottles, they are raw materials and not finished goods.
4. Sales of wheat to Mrs. Baird's Bakery - The wheat purchased represent intermediate material for further processing of bread, it is a raw material required to produce a finished product - bread.
Sue is a small business owner who often gives gifts to clients. She gives a $40 gift to her client, Mr. Smith, and his wife. Sue spent $6 to wrap the gift. She also gave out 400 calendars with her company name on them. Each calendar cost $1. Sue also gave her secretary a $370 watch for his 10 years of service. How much of the above expenses may she deduct? a. None of these b. $446 c. $795 d. $816 e. $801
Answer:
total amount of expenses = $801
so correct option is e. $801
Explanation:
given data
gift to client = $40
wrap the gift = $6
calendar cost = $1
calendar = 400
watch = $370
solution
we get here Calendar cost that is
Calendar cost = 400 × $1
Calendar cost = $400
and
we know that deduction limit of gift that is given t the another person is = $25
so here total amount of expenses
total amount of expenses = $25 + $6 + $370 + $400
total amount of expenses = $801
and it may be deducted
Paul just graduated from college and landed his first "real" job, which pays 37,900 a year. In 13 years, what will he need to earn to maintain the same purchasing power of inflation averages 3 percent?
Answer:
Salary= $55,656.15
Explanation:
Giving the following information:
Paul just graduated from college and landed his first "real" job, which pays 37,900 a year.
n= 13 years
inflation= 3% annually
First, we need to calculate the total inflation of the 13 years:
accumulated inflation= 1.03^13= 1.4685
Now, we can calculate the amount necessary to maintain the purchasing power:
Salary= 37,900*1.4685= $55,656.15
Insurance agents frequently emphasize "service" in their advertisements. What services should clients legitimately expect from their insurance agents?
Answer and explanation:
Insurance agents are typically brokers who offer individuals different types of coverage according to their needs. The agents are in charge of quoting insureds with policies, adding or removing members from the coverage, and most importantly, providing insureds verbally and written the information on the type of coverage that they are purchasing. Through servicing, sometimes they serve as intermediaries to expedite insureds claims.
Insurance agents provide services such as giving advice about coverage, helping clients understand policies, assisting in claims procedures, providing updated information, and offering ongoing support. They should guide clients based on their individual needs and keep them informed throughout any claim processes. They also periodically review and adapt policies as needed.
Explanation:Clients can expect various services from their insurance agents, who act as liaisons between them and the insurance companies. Primary services include providing professional advice regarding suitable coverage, helping clients to understand complex insurance policies, and assisting in the event of a claim. Providing accurate and relevant information, answering any queries, updating insurance policies based on changing needs, and providing ongoing support are also expected services.
For instance, if a client is not sure what type of insurance best fits their needs, the agent should be able to provide advice based on the client's lifestyle, assets, and risk factors. Similarly, if a client needs to make a claim, the agent should guide them through the process, ensuring all paperwork is correctly submitted and keeping them informed about the progress of the claim. It's also the agent's responsibility to periodically review policies with clients and advise on any updates or adaptations that might be needed, as situations can change over time.
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MeasuresPenno Corporation recorded service revenues of $200,000 in 2017, of which $170,000 were on credit and $30,000 were for cash. Moreover, of the $170,000 credit sales for 2017, Penno collected $20,000 cash on those receivables before year-end 2017. The company also paid $25,000 cash for 2017 wages. Its employees also earned another $20,000 in wages for 2017, which were not yet paid at year-end 2017. Compute the company’s net income for 2017.
Answer:
$155,000
Explanation:
Given that,
Service revenues in 2017 = $200,000
Credit sales for 2017 = $170,000
Company also paid cash for 2017 wages = $25,000
Wages for 2017 not paid yet in cash = $20,000
Therefore,
Net income for 2017:
= Service revenues in 2017 - Cash paid for wages - Wages not paid yet in cash
= $200,000 - $25,000 - $20,000
= $155,000
Hence, the company’s net income for 2017 is $155,000.
The net income for 2017 is $155,000.
The calculation is as follows:= Service revenues in 2017 - Cash paid for wages - Wages not paid yet in cash
= $200,000 - $25,000 - $20,000
= $155,000
Hence, we can conclude that the company’s net income for 2017 is $155,000.
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Consider a used car market with asymmetric information. The owners of used cars know what their vehicles are worth but have no way of credibly demonstrating those values to potential buyers. Thus, potential buyers must always worry that the used car they are being offered may be a low quality "lemon."
a. Suppose that there are equal numbers of good and bad used cars in the market and that good used cars are worth $13,000 while bad used cars are worth $5,000. What is the average value of a used car?
b. By how much does the average value exceed the value of a bad used car? By how much does the value of a good used car exceed the average value?
c. Would a potential seller of a good used car be willing to accept the average value as payment for her vehicle?
d. If a buyer negotiates with a seller to purchase the seller’s used car for a price equal to the average value, is the car more likely to be good or bad?
e. Will the used-car market come to feature mostly—if not exclusively—lemons? How much will used cars end up costing if all the good cars are withdrawn?
Answer:
a. $9,000
b. $4,000 & $4,000
c. The seller is probably not willing to accept the average value as payment for her vehicle.
d. The car is more likely to be bad.
e. The used car market will still have both good and bad cars. Used cars end up costing the same if all the good cars are withdrawn. In the long run, prices of used cars may fall.
Explanation:
a. Because there are equal numbers of good and bad used cars in the market, the probability that a car is a good car is equal to the probability that a car is a bad car (=0.5). So the average value of a used car is calculated by taking the probability that a car is a good car (0.5), multiplying that by the value of a good car ($13,000), and adding to that the probability that a car is a bad car (0.5), multiplying that by the value of a bad car ($5,000). To put in an equation, we have
Average value of used car = Average value of good used car + Average value of bad used car
= (0.5 x $13,000) + (0.5 x $5,000)
= $9,000
b. The average value exceeds the value of a bad used car by:
Average value of used car - Average value of bad used car
= $9,000 - $5,000
= $4,000
The value of a good used car exceeds the average value by:
Average value of good used car - Average value of used car
= $13,000 - $9,000
= $4,000
c. A potential seller of a good used car would know that her car was worth $13,000, more than the average value ($9,000). Therefore, it would not make sense to sell her vehicle for $9,000. The seller would probably not be willing to accept the average value as payment for her vehicle.
d. If a buyer negotiates with a seller to purchase the seller's used car for a price equal to the average value, the car is more likely to be bad. As in c, a seller of a good used car would probably not be willing to accept the average value as payment for her vehicle.
e. The used car market will always have good and bad used cars because the average price does not apply in the market. If buyers know that they are negotiating the price of a car down to a much lower price, it is likely that the car they are buying are lemons. Likewise, buyers who want good cars may be willing to pay a bit more to ensure that they are not getting bad cars.
If all the good cars are withdrawn, the price of used cars will stay unchanged as buyers do not know whether cars are good or bad (asymmetric information). However, in the long run, buyers will know that and get more information than they had before, so prices will probably fall.
Which of the following is not a comprehensive basis of accounting other than generally accepted accounting principles?A. Basis of accounting used by an entity to comply with the financial reporting requirements of a government regulatory agencyB. Cash receipts and disbursements basis of accountingC. Basis of accounting used by an entity to file its income tax returnD. Basis of accounting used by an entity to comply with the financial reporting requirements of a lending institution
Answer:
The correct answer is letter "D": Basis of accounting used by an entity to comply with the financial reporting requirements of a lending institution.
Explanation:
According to the Generally Accepted Accounting Principles (GAAP) income tax accounting, cash basis accounting, modified cash basis of accounting, and basis of accounting to comply with a mandatory governmental authority are valid to prepare financial statements. Any other method is forbidden.
Ryan Olson organized a new company, MeToo, Inc. The company provides networking management services on social network sites. You have been hired to record the following transactions. a. May 1: Issued 850 shares of common stock to investors for $20 per share. b. May 15: Borrowed $46,500 from the bank to provide additional funding to begin operations; the note is due in two years. c. May 31: Paid $4,800 for a one-year fire insurance policy with coverage starting June 1. TIP: For convenience, simply record the full amount of the payment as an asset (Prepaid Insurance). At the end of June, this account will be adjusted to its proper balance. d. June 3: Purchased furniture for the store for $22,600 on account. The amount is due within 30 days. e. June 5: Placed advertisements in local college newspapers today for a total of $715 cash. f. June 9: Provided services for $605 cash. g. June 14: Made full payment for the furniture purchased on account on June 3.
Answer:
MeToo, Inc.
Journal Entries
Sr. No Accounts Dr. Cr.
May 1 Cash 17000
Common Stock 17000
Issued 850 shares of common stock to investors for $20 per share
May 15: Cash 46,500
Notes Payable 46,500
Borrowed $46,500 from the bank to provide additional funding to begin operations; the note is due in two years.
May 31: Prepaid Insurance 4800
Cash 4800
Paid $4,800 for a one-year fire insurance policy with coverage starting June 1. TIP: For convenience, simply record the full amount of the payment as an asset (Prepaid Insurance). At the end of June, this account will be adjusted to its proper balance.
June 3: Furniture 22600
Accounts Payable 22600
Purchased furniture for the store for $22,600 on account. The amount is due within 30 days.
June 5: Advertisement 715
Cash 715
Placed advertisements in local college newspapers today for a total of $715 cash.
June 9: Cash 605
Services Revenue 605
Provided services for $605 cash.
June 14: Accounts Payable 22600
Cash 22600
Made full payment for the furniture purchased on account on June 3.
June 30 Insurance Expense 400
Prepaid Insurance 400
$ 4800/12 = $ 400 adjustment of one month insurance expense.
Pension plan assets were $200 million at the beginning of the year. The return on plan assets was 5%. At the end of the year, retiree benefits paid by the trustee were $8 million and cash invested in the pension fund was $12 million. What was the amount of the pension plan assets at year-end?
Answer:
Pension plan assets at the year end will be $214
Explanation:
Wee have given pension plan assets = $200 million
Return on plan assets = 5%
So return will be equal to = $200×0.05 = $10 million
Cash contribution is given $12 million
Retiree benefits is $8 million
We have to find the amount of pension plan assets at the year end
Pension plan assets is equal to = Plan assets at beginning of the year + actual return - retiree benefits = $200 + $10 +$12 - $8 = $214
So pension plan assets at the year end will be $214
Macroeconomics is the study of A. why the U.S. has spent so much money on wars and government surveillance of its own citizens. B. how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices. C. the economy on a state-by-state basis, covering areas affected by the Commerce Clause. D. the economy as a whole, including topics such as inflation, unemployment, and economic growth.
Answer:
D. the economy as a whole, including topics such as inflation, unemployment, and economic growth.
Explanation:
Macro Economics is the study of economy as a whole. It focuses on economic participants - buyers, sellers as a huge aggregate group. It deals with Aggregate factors of Economy like - Aggregate Demand, Aggregate Supply, General Price Level, over all economic growth.