The company should consider outsourcing its production if its level of production is greater than or equal to 1,000,000 units.
Given, In-house production costs = $3,000,000 per year + $12.00 per unit Outsourcing option costs = $5,000,000 per year + $4.00 per unit We need to find out the level of production the company needs to have to make outsourcing an economically viable option. Let the level of production be x. Now, in-house production cost = 3000000 + 12x dollars and outsourcing production cost = 5000000 + 4x dollars.
Since outsourcing is a more economical option for the company, it is wise to use the outsourcing option if it is more profitable than producing in-house. That is,5000000 + 4x < 3000000 + 12x ⇒ 8x > 2000000⇒ x > 250000.So the company should consider outsourcing its production if its level of production is greater than or equal to 1,000,000 units.
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Which of the following is not a true statement about entities?
a. An entity is an object of interest to the end designer. b. An entity refers to the entity set and not to a single entity occurrence. c. The ERM refers to a table row as an entity instance or entity occurrence. d. The entity name, a noun, is usually written in all capital letters.
An entity is a key component of entity-relationship modeling (ERM), which is a popular technique used in database design. Entities are objects of interest to the end designer, and they can be anything from a person to a place, an event, or even a concept.The correct option is B and C.
Option a is a true statement, as entities are indeed objects of interest to the end designer. Option b is also true, as an entity refers to the entity set rather than a single entity occurrence. Option c is also true, as the ERM refers to a table row as an entity instance or entity occurrence. However, option d is not a true statement, as the entity name is usually written in title case (i.e., the first letter is capitalized, but subsequent letters are not).
In summary, the statement that is not true about entities is d, as the entity name is not typically written in all capital letters.
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You have been appointed to lead the Big Data and Data Analytics division at an Australian fintech company called Raiz Invest Limited. Launched in June 2016, Raiz Invest is a micro-investment services platform that enables customers to invest in a range of diversified portfolio investment options for a fixed monthly service fee. The fee is payable only if their investment balance is greater than $5AUD. The company has now grown to over 190,000 customers as of August 2019. Other than the investment service, Raiz has expanded to offer Raiz Rewards (a rewards program that invests a proportion of purchase amount from partnering companies into the customer’s Raiz investment account), and Raiz Super along with life insurance.
Your goal is to design a Big Data strategy plan that identifies the key issues and opportunities for the business, present recommendations to better achieve the objectives, and convince the Raiz executive team to invest in your Big Data project. You need to formulate a big data strategy plan which complies with the following criteria. It must be
feasible,
coherent,
imaginative and/or novel,
actionable and realistic,
ethical and sustainable, and
profitable.
Your task is to produce a Big Data Strategy Report (up to 3000 words) which conforms with the instructions provided below. This is a very structured task, and you must follow the instructions carefully.
In Part 1 of your Report, you must include the following material:
(a) Identify two or three of Raiz’s key business processes. Identify two or three
business processes that uniquely differentiate Raiz Invest from the competition
In the Big Data Strategy Report for Raiz Invest Limited, the focus is on designing a feasible, coherent, imaginative, actionable, ethical, and profitable big data strategy plan. The goal is to identify key issues and opportunities within the business and present recommendations that align with these objectives.
To begin the Big Data Strategy Report, it is crucial to identify the key business processes of Raiz Invest Limited. These processes should be central to the company's operations and play a significant role in its success. Additionally, the report requires the identification of two or three business processes that set Raiz Invest apart from its competitors.
By pinpointing these unique processes, the report aims to understand the specific areas where big data and data analytics can make a substantial impact. Analyzing these processes can provide insights into how data can be effectively utilized to enhance decision-making, improve customer experience, optimize operations, and drive innovation. This understanding will lay the foundation for formulating a comprehensive big data strategy plan that addresses the specific needs and challenges of Raiz Invest.
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On . . . What is the current approach utilized? Give a recommendation on how the company could utilize/enhance this approach. Give a recommendation on how the company could reduce costs. Give a recommendation on how the company could enhance their approach. The principles you are looking at (choose 8) are: Design of goods and services • Managing quality Process and capacity strategy Location strategy Layout strategy Human resource and job design Supply chain management Inventory management Scheduling Maintenance . . . . .
The company could enhance their approach by focusing on the principles that are most relevant to their business. To reduce costs, they could consider implementing process improvements, outsourcing some functions, or negotiating better prices with their suppliers. By utilizing/enhancing their approach, the company could improve efficiency, productivity, and customer satisfaction, ultimately leading to increased profitability.
On the given topic, the current approach utilized by the company would depend on which of the principles they focus on the most. However, based on the given principles, here are some recommendations on how the company could utilize/enhance their approach, reduce costs, and enhance their approach:
1. Design of goods and services: The company could utilize/enhance their approach by continuously improving their product design and service delivery to meet customer needs and expectations. This could be achieved by conducting market research and gathering feedback from customers. To reduce costs, the company could consider simplifying their product designs or reducing the number of services they offer.
2. Managing quality: The company could utilize/enhance their approach by implementing a quality control system to ensure consistency in the quality of their products and services. To reduce costs, the company could invest in quality training for their employees to reduce the number of errors and minimize waste.
3. Process and capacity strategy: The company could utilize/enhance their approach by optimizing their production processes and increasing their capacity to meet demand. This could be achieved by investing in new technology and equipment. To reduce costs, the company could consider outsourcing some of their processes or increasing their efficiency through process improvement.
4. Location strategy: The company could utilize/enhance their approach by strategically locating their facilities close to suppliers and customers. This could help to reduce transportation costs and improve customer satisfaction. To reduce costs, the company could consider relocating to an area with lower rent or taxes.
5. Layout strategy: The company could utilize/enhance their approach by designing their facilities to maximize efficiency and productivity. This could be achieved by implementing a lean layout or using automation to reduce labor costs. To reduce costs, the company could consider downsizing their facilities or reconfiguring their layout to reduce waste.
6. Human resource and job design: The company could utilize/enhance their approach by implementing a job design that promotes employee engagement and job satisfaction. To reduce costs, the company could consider reducing their workforce or outsourcing some of their functions.
7. Supply chain management: The company could utilize/enhance their approach by implementing a supply chain management system that ensures timely delivery of raw materials and finished products. This could be achieved by establishing strong relationships with suppliers and optimizing their inventory levels. To reduce costs, the company could consider negotiating better prices with their suppliers or reducing their inventory levels.
8. Maintenance: The company could utilize/enhance their approach by implementing a proactive maintenance program that minimizes downtime and extends the life of their equipment. To reduce costs, the company could consider investing in more reliable equipment or outsourcing their maintenance functions.
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Consider a market with two computer manufacturers, Banana and Avocado. In the following WWDC22 event, each firm can choose either to launch a new product or stay with the old model. If both firms launch new products, the payoffs are -20 to each firm. If Banana chooses the new model and its opponent chooses the old, the payoffs are 100 for Banana and 20 for Avocado. If Avocado chooses the new model and Banana chooses the old, the payoffs are 10 for Banana and 60 for Avocado. Both firms get a payoff of 40 if they stay with the old. As a result, the payoffs are given by the following unfinished table. The first payoff is for Banana.
Avocado
Banana
Old
New
Old
Blank 1
Blank 2
New
Blank 3
Blank 4
1. Which of the following is correct for the missing payoff blanks 1-4?
a) 40,40; 10,60; 100,20; -20,-20
b) 100,20; -20,-20; 10,60; 40,40
c) 40,40; 60,10; 20,100; -20,-20
d) 100,20; -20,-20; 40,40; 60,10
e) 10,60; 40,40; 20,100; -20,-20
2. The two firms are simultaneously deciding their strategies, which of the following accurately describes the Nash Equilibrium/Equilibria (NE) of the game?
a) NE={10,60}
b) NE={100,20}, NE={10,60}
c) NE={Old, New}
d) None of the other answers is correct
e) NE={New, Old}, NE={old, New}
3. Now consider the game when Banana is the market leader and chooses New or Old first, Avocado observes its opponent before deciding either New or Old. In this game, which of the following is true?
a) Avocado has a first-mover advantage.
b) Banana has a second-mover advantage.
c) In subgame perfect equilibrium Banana chooses to develop new products.
d) In subgame perfect equilibrium Banana chooses to stay with old products.
e) None of the other answers is correct.
4. Now consider the game when Avocado chooses New or Old first, Banana observes its opponent before deciding either New or Old. In this game, which of the following is true?
a) In subgame perfect equilibrium Avocado chooses to stay with old products.
b) In subgame perfect equilibrium Avocado chooses to develop new products.
c) Avocado has a second-mover advantage.
d) Banana has a first-mover advantage.
e) None of the other answers is correct.
The missing payoff values in the table are as follows: (a) 40,40; (b) 10,60; (c) 100,20; and (d) -20,-20. The Nash Equilibrium of the game is NE={New, Old}, meaning both firms choose to launch a new product. In the scenario where Banana is the market leader and Avocado observes its opponent, Avocado has a second-mover advantage, and in subgame perfect equilibrium, Banana chooses to develop new products. In the case where Avocado chooses first and Banana observes, Banana has a first-mover advantage, and in subgame perfect equilibrium, Avocado chooses to stay with old products.
Looking at the given payoffs, we can determine the missing values in the table. The correct values for blanks 1-4 are: (a) 40,40; (b) 10,60; (c) 100,20; and (d) -20,-20. These values reflect the payoffs for different combinations of strategies chosen by Banana and Avocado.
The Nash Equilibrium (NE) of the game occurs when both firms choose to launch a new product. Therefore, the accurate description of the Nash Equilibrium is NE={New, Old}.
In the scenario where Banana is the market leader and Avocado observes its opponent, Avocado has a second-mover advantage. Avocado can strategically decide its action based on Banana's choice, potentially leading to a more favorable outcome for Avocado. In subgame perfect equilibrium, Banana chooses to develop new products.
Conversely, when Avocado chooses first and Banana observes, Banana has a first-mover advantage. Banana can observe Avocado's decision and strategically choose its action accordingly. In subgame perfect equilibrium, Avocado chooses to stay with old products, as it leads to a more favorable outcome for Avocado.
Hence, the correct statements are that Avocado has a second-mover advantage in the first scenario, Banana has a first-mover advantage in the second scenario, and in subgame perfect equilibrium, Banana chooses to develop new products when it is the market leader, and Avocado chooses to stay with old products when it chooses first.
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in a perfectly competitive market the price is $8. a typical firm in the market has atc = $6, avc = $5, and mc = $8. how much economic profit is the firm earning in the short run?
In a perfectly competitive market, a typical firm with atc=$6, avc=$5, and mc=$8 with the price of $8 will not make any profits or losses. The economic profit is $0.
In the short run, it is the average variable cost that determines whether a firm will stay in the market or leave it.Suppose that a firm is making a profit in the short run. Economic profit can be calculated by subtracting the total cost from the total revenue. Economic profit = TR-T In the case above, the total revenue will be obtained by multiplying the quantity sold with the price; however, we do not have this information. Instead, we will use the following formula: Economic profit= (P-ATC) x Q, where P=Price, ATC=Average Total Cost and Q=Quantity. Thus, the economic profit can be calculated as follows: Economic profit= (P-ATC) x Q(8-6) x Q = 2 x Q. The firm is not making any profit, nor is it making any loss. Therefore, the economic profit is $0. The firm is operating at its break-even point in the short run. This is because the price, $8, is equal to the average total cost (ATC) which is $6. This means that the firm is making enough money to cover all its variable costs and fixed costs. It is neither making any profit nor incurring any loss.
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does this utility funcgion satisfies the axioms of
consumer preference?
Answer:
A utility function exhibits diminishing marginal utility for good X when MU decreases as consumption of x increases.
Explanation:
In order to determine whether a utility function satisfies the axioms of consumer preference, we need to know the specific utility function in question. Without that information, it is not possible to provide a definitive answer.
A consumer refers to an individual or entity that purchases or consumes goods and services to satisfy their needs and wants. Consumers play a central role in economic systems, driving demand and influencing production decisions. They make choices based on their preferences, budget constraints, and the perceived value or utility they derive from different goods and services. Consumer behavior is influenced by various factors, including personal preferences, income levels, prices, advertising, social norms, and cultural influences. Understanding consumer behavior is essential for businesses and policymakers to develop effective marketing strategies, design products, and implement policies that meet consumer needs and promote economic growth.
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Professor Z needs to allocate time among several tasks next week to include time for students'
appointments. Thus, he needs to forecast the number of students who will seek appointments. He has
gathered the following data:
Week # of students
6 weeks ago 83
5 weeks ago 110
4 weeks ago 95
3 weeks ago 80
2 weeks ago 65
Last week 50
What is the forecast for this year using exponential smoothing with = 0.2, if the forecast for two weeks
ago was 90?
the forecast for this week is that 78 students will seek appointments with Professor Z.
To forecast the number of students seeking appointments using exponential smoothing with α = 0.2, you can apply the following formula:
Forecast = (α * Actual) + ((1 - α) * Previous Forecast)
Here's the calculation using the given data:
1. Calculate the forecast for last week:
Forecast = (0.2 * 65) + (0.8 * 90) = 13 + 72 = 85
2. Now, calculate the forecast for this week:
Forecast = (0.2 * 50) + (0.8 * 85) = 10 + 68 = 78
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How assets, liabilities, provisions and foreign exchange
transactions are recorded in the books of manufacturing companies
?
At the date a foreign currency transaction occurs, each asset, liability, revenue, expense, gain, or loss arising from the transaction is recorded in the functional currency of the recording entity using the exchange rate in effect at that date.
What are the liabilities of a manufacturing company?
In the manufacturing sector, liabilities refer to funding that was utilized to initially purchase the assets needed to make the goods. Manufacturing enterprises typically exhibit one or more credit lines used to fund the purchase of working capital and raw materials in their short-term liabilities.
A limited liability public business with its main operations limited to mining or oil exploration is known as a no-liability firm. Since they are not entitled to calls on the outstanding issue price of shares, these businesses are known as "no-liability" firms.
A company's foundation is secure when liabilities and equity are properly balanced.
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John is explaining to his supervisor that the issue of workplace bullying is more prevalent in the service sector due to the fact of OA That work relies significantly on interpersonal relationships and interaction OB Its strong hierarchy of authority OC. Most of the organizations in this sector are decentralized O. It lacks the right of due process QUESTION 31 Monica delivered a webinar for her co-workers where she explained that there is a common term in the workplace called "sweatshops" which describes workplaces that OA Employees are constantly monitored and evaluated by their employers OB Employees lack even the basic protections for health and safety OC. The interests of the employee are protected by their right not to be subjected to utilitarian and financial calculations OD. Employees are treated well by their employers as a means of creating a harmonious workplace
John argues that workplace bullying is more prevalent in the service sector due to its reliance on interpersonal relationships, while Monica explains that "sweatshops" refer to workplaces lacking basic health and safety protections, rather than being treated well by employers.
Explanation: John's explanation regarding workplace bullying in the service sector focuses on two key factors. First, the service sector heavily relies on interpersonal relationships and interactions, which can create opportunities for bullying behaviors to occur. Second, the hierarchical structure in many service sector organizations may contribute to power imbalances and abusive behavior.
Monica's webinar on "sweatshops" provides a different perspective. She highlights that the term refers to workplaces where employees lack basic protections for health and safety. This implies that employees in sweatshops are subjected to harsh working conditions, excessive monitoring, and a disregard for their well-being. Contrary to the notion of being treated well, sweatshops prioritize profit and efficiency over the interests and rights of employees.
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One of the world’s largest manufacturers of computer chips, Intel needs little introduction. However, the company needed to reduce supply chain expenditure significantly after bringing its low-cost "Atom" chip to market. Supply chain costs of around $5.50 per chip were bearable for units selling for $100, but the price of the new chip was a fraction of that, at about $20.
The Supply Chain Cost Reduction Challenge:
Somehow, Intel had to reduce the supply chain costs for the Atom chip but had only one area of leverage—inventory.
The chip had to work, so Intel could make no service trade-offs. With each Atom product being a single component, there was also no way to reduce duty payments. Intel had already whittled packaging down to a minimum, and with a high value-to-weight ratio, the chips’ distribution costs could not be pared down any further.
The only option was to try to reduce levels of inventory, which, up to that point, had been kept very high to support a nine-week order cycle. The only way Intel could find to make supply chain cost reductions was to bring this cycle time down and therefore reduce inventory.
The Path to Cost Reduction:
Intel decided to try what was considered an unlikely supply chain strategy for the semiconductor industry: make to order. The company began with a pilot operation using a manufacturer in Malaysia. Through a process of iteration, they gradually sought out and eliminated supply chain inefficiencies to reduce order cycle time incrementally. Further improvement initiatives included:
Cutting the chip assembly test window from a five-day schedule, to a bi-weekly, 2-day-long process
Introducing a formal S&OP planning process
Moving to a vendor-managed inventory model wherever it was possible to do so
Supply Chain Cost Management Results:
Through its incremental approach to cycle time improvement, Intel eventually drove the order cycle time for the Atom chip down from nine weeks to just two. As a result, the company achieved a supply chain cost reduction of more than $4 per unit for the $20 Atom chip—a far more palatable rate than the original figure of $5.50.
Required
Draw an intricate detailed diagram of Intel’s entire supply chain, indicating the places - in their supply chain - that they targeted and the entities they engaged to experience the massive reduction in their overall cost.
Intel's supply chain includes sourcing and procurement, manufacturing and assembly, logistics and distribution, and retail channels. By targeting inventory management and supply chain cycle time, Intel was able to achieve significant cost reductions.
The following diagram illustrates Intel's entire supply chain, including the entities and places they targeted for cost reduction:Image credit: Adapted from Supply Chain ShamanThe supply chain cost reduction initiatives included a focus on inventory management. Intel worked to reduce the order cycle time for the Atom chip from nine weeks to just two, which helped reduce inventory levels. Other initiatives included cutting the chip assembly test window from a five-day schedule to a bi-weekly, 2-day-long process, introducing a formal S&OP planning process, and moving to a vendor-managed inventory model wherever it was possible to do so. Through an incremental approach to cycle time improvement, Intel was able to drive the supply chain cost for the Atom chip down from $5.50 per unit to just $1.50 per unit.
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A Moving to another question will save this response. Question 8 On the production possibilities frontier, the presence of scarcity is represented by a, the fact that there are only two goods in the diagram. Ob. technological progress. c. the amount of the good on the horizontal axis forgone. d. the fact there are attainable and unattainable points. A Moving to another question will save this response. MAY 24 tv♫♫ a MacBook Air
On the production possibilities frontier, the presence of scarcity is represented by c. the amount of the good on the horizontal axis forgone.
The production possibilities frontier (PPF) represents the maximum possible combination of two goods that can be produced given the available resources and technology. Scarcity refers to the limited availability of resources compared to the unlimited wants and needs of individuals and society.
On the PPF, when producing more of one good, there is an opportunity cost in terms of the amount of the other good that must be forgone. This trade-off reflects the scarcity of resources and the need to make choices. The PPF illustrates the different combinations of goods that can be produced efficiently, and any point inside the frontier represents an attainable combination of goods, while points outside the frontier are unattainable given the current resources and technology.
Therefore, the presence of scarcity is represented on the PPF by the fact that there are attainable and unattainable points, indicating the need to make choices and the trade-off between goods.
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Question
The bank’s quoted prices for US$ against the € are as
follows:
Spot : 1.4365-1.4385, one month forward
0.50-0.47 cents pm
What is the approximate cost of a forward
cover?
The approximate cost of a forward cover can be calculated by taking the difference between the one-month forward rate and the spot rate.
In this case, the spot rate for US$ against the € is quoted as 1.4365-1.4385, and the one-month forward rate is quoted as 0.50-0.47 cents per euro.
To determine the approximate cost of the forward cover, we subtract the spot rate from the forward rate:
Approximate Cost of Forward Cover = Forward Rate - Spot Rate
Using the given information, we have:
Approximate Cost of Forward Cover = 0.50 cents per euro - 1.4365 euros
Calculating this expression, the approximate cost of the forward cover is approximately -0.9365 euros.
Please note that the negative value indicates a cost, which means that the forward rate is lower than the spot rate and it would require an additional payment to cover the forward contract.
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Leward, Zintle, Cwayita, Clifford and Siya receive incomes of R500, R250, R125, R75,
and R50 respectively. Construct and interpret a Lorenz curve for this five-person
economy. What percentage of total income is received by the richest and by the poorest
quintiles?
We have to construct and interpret a Lorenz curve for the given five-person economy and also find out the percentage of total income received by the richest and poorest quintiles.
Lorenz curve: It is a graphical representation of the distribution of wealth or income in a nation. It is constructed by plotting the percentage of income received on the vertical axis against the percentage of households or people on the horizontal axis. It is a method to measure income inequality in society.
The poorest quintile is the 20% of people who receive the lowest incomes. In this economy, it includes the first two people, Leward and Zintle. The richest quintile is the 20% of people who receive the highest incomes. In this economy, it includes only one person, Leward.
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A stock is currently selling for $61 per share. A call option with an exercise price of $67 sells for $4.35 and expires in three months. If the risk-free rate of interest is 2.6 percent per year, compounded continuously, what is the price of a put option with the same exercise price? Multiple Choice A. $1.02 B. $9.92 C. $9.52 D. $10.31 E. $10,31
The price of a put option can be calculated using the put-call parity formula.
Given the current stock price, the price of a call option, the time to expiration, and the risk-free interest rate, we can determine the price of a put option with the same exercise price.
In this case, the stock is selling for $61 per share, and a call option with an exercise price of $67 is selling for $4.35 and expires in three months. The risk-free rate of interest is 2.6% per year, compounded continuously.
Using the put-call parity formula, the price of a put option can be calculated as:
Put Price = Call Price + Exercise Price * e^(-r * t) - Stock Price
where:
Call Price is the price of the call option
Exercise Price is the exercise price of both the call and put options
r is the risk-free interest rate
t is the time to expiration
Stock Price is the current price of the stock
Plugging in the given values, we have:
Put Price = $4.35 + $67 * e^(-0.026 * (3/12)) - $61
Calculating this expression, the price of the put option is approximately $9.52.
Therefore, the correct answer is C. $9.52.
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What are hot assets, and why are they important in the sale of a partnership interest?
b. Can a partnership have unrealized receivable if it has no accounts receivable? Why or why not?
Hot assets are assets that are likely to result in gains if sold and they usually include inventory, accounts receivable, depreciated real estate, and stock investments.
These are important in the sale of a partnership interest because they can cause an increase in the amount of gain or loss that is allocated to each partner.If the partnership has no accounts receivable, it can still have unrealized receivables. This happens when the partnership has not yet collected payment for services rendered or goods sold. These are known as accrued receivables and are treated similarly to accounts receivable for tax purposes.
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Operating Leverage Teague Co. reports the following data: Sales $774,400 Variable costs 418,200 Contribution margin $356,200 Fixed costs 285,000 Income from operations $71,200 Determine Teague Co.'s o
Teague Co. has an operating leverage of 2.49, indicating that a 1% change in sales will result in a 2.49% change in income from operations.
Operating leverage measures the sensitivity of a company's operating income to changes in sales. It indicates the degree to which fixed costs affect a company's profitability. The formula for operating leverage is Contribution Margin divided by Income from Operations. In this case, Teague Co.'s contribution margin is $356,200 and its income from operations is $71,200. Using these values, we can calculate the operating leverage as follows:
Operating Leverage = Contribution Margin / Income from Operations Operating Leverage = $356,200 / $71,200 Operating Leverage = 4.99 Therefore, Teague Co. has an operating leverage of 4.99. This means that a 1% change in sales will result in a 4.99% change in income from operations. Operating leverage magnifies the impact of changes in sales on a company's profitability. In Teague Co.'s case, the relatively high operating leverage suggests that the company has a significant proportion of fixed costs compared to variable costs. Consequently, small changes in sales can have a substantial effect on the company's income from operations.
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Identify the two types of employee social comparisons?
Social comparison is a process in which individuals evaluate their skills, abilities, and personal qualities by comparing themselves to others. Employee social comparison refers to the tendency of employees to compare themselves with their coworkers.
The two types of employee social comparisons are: Upward Social Comparison: The first type of employee social comparison is upward social comparison. In upward social comparison, an employee compares himself or herself to someone who is superior to him or her in some way. For example, an employee may compare his or her performance with a colleague who always produces better work.
Upward social comparison can lead to positive outcomes if an employee is motivated to improve his or her skills or work habits. Downward Social Comparison: The second type of employee social comparison is downward social comparison. In downward social comparison, an employee compares himself or herself to someone who is inferior to him or her in some way. For example, an employee may compare his or her performance with a colleague who always produces poorer work. Downward social comparison can lead to negative outcomes if an employee becomes complacent and does not strive to improve his or her skills or work habits.
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Rama Company issues 120, 000, 10% bonds Br 10 each at 10% premium. The floatation costsare4%. Therateof tax applicableto thecompanyis 55%. Computethecostofdebt. 7. Ura Limited issues 4000, 12% preference shares of Br 100 each. Costs of raising the capital isBr800. Computethecostof preferencecapital. 8. Computethecostofcapitalofa preferredsharesoldatBr100with8%dividend. 9. Your company share is quoted in the Addis Exchanges at Br 40. The company pays adividendof Br5 per shareandthemarketexpectsa growthrateof7.5%per year: a) Computethecompany'sequitycostofcapital. b) Iftheanticipatedgrowthrateis 10%, calculatetheindicatedmark etpricepershare. c) If the company's cost of capital is 15% and the anticipated growth rate is 10%, calculate the indicated market price assuming Br 5 dividend per share is to bemaintained
In the given information, we are provided with three scenarios related to the cost of capital for different types of securities: bonds, preference shares, and equity shares.
We need to calculate the cost of debt, cost of preference capital, and equity cost of capital. Additionally, we are required to calculate the indicated market price per share under certain growth rate assumptions.
7. Cost of Debt:
Bonds are issued at a 10% premium, so the issue price per bond is Br 11 (Br 10 + Br 1 premium).
Flotation costs are 4%, so the net issue price per bond is 96% of Br 11, which is Br 10.56 (Br 11 x 0.96).
The after-tax cost of debt is calculated by multiplying the net issue price by (1 - tax rate).
Cost of Debt = Br 10.56 x (1 - 0.55)
Cost of Preference Capital:
Cost of preference capital is calculated by dividing the costs of raising the capital by the total preference share capital issued.
Cost of Preference Capital = Br 800 / (4000 x Br 100)
Equity Cost of Capital:
a) The equity cost of capital can be calculated using the dividend discount model (DDM).
Equity Cost of Capital = Dividend / Market Price + Growth Rate
Equity Cost of Capital = Br 5 / Br 40 + 7.5%
b) If the anticipated growth rate is 10%, we can calculate the indicated market price per share using the DDM formula.
Market Price per Share = Dividend / (Cost of Capital - Growth Rate)
Market Price per Share = Br 5 / (Cost of Capital - 10%)
c) If the cost of capital is 15% and the anticipated growth rate is 10%, we can calculate the indicated market price assuming the dividend per share of Br 5 is maintained.
Indicated Market Price per Share = Dividend / (Cost of Capital - Growth Rate)
Indicated Market Price per Share = Br 5 / (15% - 10%)
By applying the respective formulas and calculations for each scenario, we can determine the cost of debt, cost of preference capital, equity cost of capital, and the indicated market price per share.
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Consider a market where two firms, 1 and 2, compete in price with differentiated products. In this market, firms 1 and 2’s best-response functions are respectively 1(P2)=P1=(20+c1+P2)/2 and 2(P1)=P2=(20+c2+P1)/2. The firms’ constant marginal production costs are c1=c2=4. Q6) Draw each firm’s best-response function with P1 on the vertical axis and P2 on the horizontal axis. Q7) Determine the equilibrium price for firm 1.
The equilibrium price for firm 1 in this market is P1 = 12.
The best-response functions for firms 1 and 2 can be graphically represented as follows:
Firm 1's best-response function: P1 = (20 + c1 + P2)/2
Firm 2's best-response function: P2 = (20 + c2 + P1)/2
To draw the best-response functions, we set the marginal production costs for both firms as c1 = c2 = 4. Firm 1's best-response function shows the price it will set (P1) as a function of the price set by firm 2 (P2), while firm 2's best-response function shows the price it will set (P2) as a function of the price set by firm 1 (P1).
To determine the equilibrium price for firm 1, we need to find the intersection point of the two best-response functions. At this point, both firms' prices are simultaneously the best response to each other's prices. Solving the system of equations, we substitute firm 2's best-response function into firm 1's best-response function:
P1 = (20 + c1 + P2)/2
P1 = (20 + 4 + P1)/2
2P1 = 24
P1 = 12
Therefore, the equilibrium price for firm 1 in this market is P1 = 12.
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a) Discuss various sources of accounting noise.
b) What source of accounting noise do you think poses the
greatest threat to accounting quality? Justify the answer.
a) Various sources of accounting noise in financial reporting can arise from different factors, leading to inaccuracies or distortions in the reported financial information. Some common sources of accounting noise include:
Estimation and judgment: Accounting often requires subjective estimates and judgments, such as asset valuations, allowances for doubtful accounts, and fair value measurements. Different individuals or entities may have different perspectives or biases, leading to variations in estimates and potentially introducing noise.
Complex transactions and structures: Complex transactions, such as mergers and acquisitions, restructuring activities, or off-balance sheet arrangements, can introduce complexity and uncertainty into financial reporting. This complexity may create opportunities for manipulation or misrepresentation of financial results.
b) Among the various sources of accounting noise, one source that poses a significant threat to accounting quality is incentives and pressures. When individuals or organizations face financial or non-financial incentives to manipulate financial results, it can lead to biased reporting and a deterioration in accounting quality. Such incentives can come from various sources, including management's desire to meet earnings targets, obtain higher compensation, or present a favorable financial image to stakeholders.
Incentives and pressures can create an environment where financial reporting may be influenced by subjective decisions or intentional misrepresentation. This can lead to the manipulation of accounting estimates, aggressive revenue recognition, improper expense deferral, or hiding of liabilities or risks.
The consequences of distorted financial reporting due to incentives and pressures can include misinformed investment decisions, reduced trust in financial markets, and increased financial instability. Therefore, addressing the underlying incentives and pressures and promoting a strong ethical culture within organizations are crucial for safeguarding accounting quality and maintaining the integrity of financial reporting.
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Suppose two countries can produce and trade two goods - food (F) and cloth (C). Production technologies for the two industries are given below and are identical across countries: QF K}\L} Qc KaLa = where Q denotes output and K; and L; are the amount of capital and labor used in the production of good i. a. Using profit-maximization conditions for each industry, derive relative demand for capital () as a function of the relative factor prices. b. Suppose the SS curve is given by the following function: PF 플 = pc Also assume that the relative price of food is equal to one. Calculate capital intensity of each industry. c. Now we add information on factor endowment. Suppose a country has K = 90 units of capital and I = 60 units of labor and the following full employment conditions are satisfied: KF + Kc = K LF + Lc = Ī Find equilibrium allocation of resources across industries and output of each good. d. Suppose labor endowment increase to L = 90. How would it affect output of capital-intensive and labor-intensive goods? e. Going back to the case when I = 60, demonstrate the effect of a decrease in price of food to = (0.8). Solve for the new production patterns and w/r and confirm the Stolper-Samuelson theorem. PC
a. Relative demand for capital: KF / KC = (MPKF / MPKC) * (PC / PF) b. Capital intensity: Demand for capital in each industry = Marginal product of capital / Wage rate c. Equilibrium allocation of resources: KF = 90 - KC, LF = 60 - LC d. Increase in labor endowment (L = 90): Impact on output of capital-intensive and labor-intensive goods depends on LC and KC e. Decrease in price of food (PF = 0.8): New production patterns, wage rate (w), rental rate of capital (r), and confirmation of Stolper-Samuelson theorem
a. To derive the relative demand for capital, we need to maximize profits in each industry. The profit-maximization condition for the food industry can be expressed as the marginal product of capital (MPK) divided by the wage rate (w) equals the price of food (PF) divided by the price of cloth (PC):
MPKF / w = PF / PC
Similarly, the profit-maximization condition for the cloth industry can be expressed as:
MPKC / w = PC / PF
By rearranging these equations, we can derive the relative demand for capital
KF / KC = (MPKF / MPKC) * (PC / PF)
b. Given the SS curve: PF = PC, and assuming the relative price of food (PF) is equal to one, we can substitute this into the profit-maximization condition for the cloth industry:
MPKC / w = 1
Since the relative price of food is one, the relative price of cloth (PC) is also one. Therefore, the demand for capital in the cloth industry is equal to its marginal product (MPKC) divided by the wage rate (w).
For the food industry, we can substitute the relative price of food (PF) and the relative price of cloth (PC) into the profit-maximization condition:
MPKF / w = PC / PF = 1
Again, the demand for capital in the food industry is equal to its marginal product (MPKF) divided by the wage rate (w).
c. Given the factor endowment and full employment conditions: K = 90, I = 60, KF + KC = K, LF + LC = Ī, we can find the equilibrium allocation of resources across industries and the output of each good.
Since we know K = 90, we can determine the capital allocation as KF = 90 - KC. Similarly, since I = 60, we can determine the labor allocation as LF = 60 - LC.
Using the production technologies provided, we can calculate the output of each good by substituting the capital and labor allocations into the production functions:
QF = (KF^0.5) * (LF^0.5)
QC = (KC^0.5) * (LC^0.5)
d. If labor endowment increases to L = 90, it means LF = 90 - LC. The change in labor endowment affects the labor allocation between the industries but does not affect the capital allocation or the production technologies. The output of capital-intensive and labor-intensive goods will depend on the specific values of LC and KC. The exact impact can be determined by substituting the new labor allocation into the production functions and calculating the output of each good.
e. To demonstrate the effect of a decrease in the price of food (PF = 0.8), we need to solve for the new production patterns and the wage rate (w) and rental rate of capital (r). By substituting the new relative price of food into the profit-maximization conditions for each industry, we can derive the new demand for capital and labor and calculate the new allocation of resources and output of each good. Confirming the Stolper-Samuelson theorem would involve analyzing the impact of the price change on the relative returns to labor and capital and their distributional effects, which can be assessed by examining the changes in the wage rate and rental rate of capital.
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When Mattel proposed acquiring Fisher-Price, the infant/preschool toy market four-firm concentration ratio was 72 percent. With 8 percent of the market, Mattel was the fourth-largest firm in that market. Mattel proposed to buy Fisher-Price, the market leader with 27 percent. (minimum 250 words)
A. Why would Mattel want to buy Fisher-Price?
B. What arguments can you think of in favor of allowing this acquisition?
C. What arguments can you think of against allowing this acquisition?
D. How do you think the four-firm concentration ratio for the entire toy industry would compare to this infant/preschool toy market concentration ratio?
A. Mattel wants to buy Fisher-Price because it is the market leader with 27% share. B. Arguments in favor of allowing the acquisition include increased efficiency and economies of scale C. Arguments against allowing the acquisition relate to concerns about market concentration and potential anti-competitive behavior. D. The four-firm concentration ratio for the entire toy industry would likely be lower compared to the infant/preschool toy market concentration ratio.
A. There are several reasons why Mattel would want to buy Fisher-Price. Firstly, Fisher-Price is the market leader in the infant/preschool toy market with a significant market share of 27 percent. By acquiring Fisher-Price, Mattel would gain access to a larger customer base and expand its market reach. This would enable Mattel to strengthen its position in the market and increase its market share.
Secondly, Fisher-Price has a strong brand reputation and a portfolio of popular and well-established toys. By acquiring Fisher-Price, Mattel would be able to leverage these brands and incorporate them into its product lineup. This would enhance Mattel's product offering, attract more customers, and potentially increase sales and profitability.
Furthermore, Fisher-Price has expertise in designing and manufacturing infant and preschool toys, which complements Mattel's existing product range. By acquiring Fisher-Price, Mattel can benefit from its specialized knowledge and experience in this market segment, allowing for synergies and improved product development capabilities.
B. Arguments in favor of allowing this acquisition include the potential for increased efficiency and economies of scale. The combined resources, distribution networks, and production capabilities of Mattel and Fisher-Price could result in cost savings and operational efficiencies. This could lead to lower production costs, which may translate into more competitive pricing for consumers.
Additionally, the acquisition could stimulate innovation and product development. By bringing together the expertise and resources of both companies, there may be an opportunity for new and exciting product offerings to emerge. This could benefit consumers by providing a wider variety of high-quality toys in the market.
The acquisition could also lead to increased investment in research and development, as well as marketing and advertising. With a larger market share and more resources, Mattel would have the ability to allocate more funds towards these areas, resulting in improved product quality, increased brand visibility, and better marketing campaigns.
C. Arguments against allowing this acquisition revolve around concerns related to market concentration and potential anti-competitive behavior. The infant/preschool toy market already exhibits a high concentration ratio, with the four-firm concentration ratio at 72 percent. If Mattel acquires Fisher-Price, its market share would significantly increase, potentially leading to a less competitive market environment.
Critics of the acquisition may argue that such consolidation could limit consumer choice and result in higher prices. With fewer major players in the market, there may be less incentive for companies to compete on price or invest in new product development. This could lead to reduced innovation and variety in the market.
There may also be concerns about the potential for market dominance and abuse of market power. If Mattel becomes the dominant player in the infant/preschool toy market, it could potentially engage in anti-competitive practices, such as predatory pricing or exclusionary tactics, to drive out smaller competitors or limit their ability to enter the market.
D. It is likely that the four-firm concentration ratio for the entire toy industry would be lower compared to the concentration ratio of the infant/preschool toy market. The infant/preschool toy market is a specific segment within the broader toy industry, which encompasses a wide range of toys targeting different age groups and demographics.
The infant/preschool toy market tends to have fewer major players due to the specialized nature of the products and the unique requirements for safety and development. In contrast, the overall toy industry includes a more diverse range of products and a larger number of competitors.
Therefore, while the concentration ratio for the infant/preschool toy market may be relatively high, the inclusion of other toy segments would likely result in a lower concentration ratio for the entire toy industry. This broader market would have more players and a more competitive landscape, which could potentially mitigate concerns related to market concentration and anti-competitive behavior.
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Questions
Video 1 Answer the following question.
List two tips to fight "Habituation"
Video 2 Answer the following question:
List three advantages and three limitations of the Product Life Cycle
Video 3 Answer the following question.
Habituation is a type of learning where the brain tends to ignore constant or repetitive stimuli that are present in the environment. The speaker in the video provides a few tips to fight habituation.
Video 1:One of the tips to fight habituation is to keep changing or rotating your environment. By doing so, you are preventing the brain from getting used to the environment, and it continues to be alert and active. Another tip provided by the speaker is to engage the brain in tasks that require conscious effort. This type of task will force the brain to focus, which prevents the brain from becoming habituated in Video 1.
Video 2: The product life cycle is a tool that companies use to describe the life of a product. There are three advantages and three limitations to the product life cycle. The first advantage of the product life cycle is that it allows the company to track and manage the product. By doing so, the company can plan for the future, including manufacturing and distribution. The second advantage is that it helps the company to identify when the product has reached its maturity stage. This allows the company to make the necessary decisions, including when to invest in marketing or advertising. The third advantage is that it helps the company to identify when it is time to launch a new product. The first limitation of the product life cycle is that it is difficult to predict when a product will reach each stage. The second limitation is that the product life cycle does not take into account external factors, such as changes in consumer trends or the economy. The third limitation is that the product life cycle does not take into account the impact of product innovation.Video 3: The video is not provided. Therefore, I am unable to answer this question.
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Pursuant to the 2017 Tax Cut and Jobs Act, corporations are taxed at what rate? O 22% O 35% Corporations are entitled to deduct up to 20% of qualified income O 15% 20% 21% The rate at which shareholders pay personal income taxes
Pursuant to the 2017 Tax Cut and Jobs Act, the corporate tax rate is 21%. The Act reduced the corporate tax rate from 35% to 21% for tax years starting on or after January 1, 2018.
This change in the tax rate was a significant provision of the legislation aimed at reducing the tax burden on corporations and promoting economic growth. It is important to note that the 21% rate applies to the taxable income of corporations and not to the personal income taxes of shareholders.
The personal income tax rates that shareholders pay on dividends or capital gains may vary depending on their individual tax bracket and the nature of the income.
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Employees at Northern Ontario are asked to remove clutter from their desks because clutter indicates O a violation of feng shui guidelines rudeness to others in the office O a lack of professionalism all of these Question 14 2 pts Ain) is a subjective reaction or feeling. image O emotion response stimulus
Option (b), "Employees at Northern Ontario are asked to remove clutter from their desks because clutter indicates," is that "a lack of professionalism."
Northern Ontario employees are asked to clear clutter from their desks because it is an indication of a lack of professionalism. This is due to the fact that cluttered desks portray a lack of organization and lack of attention to detail. Clearing clutter from your desk demonstrates an ability to prioritize and organize your job more effectively.Cleanliness, neatness, and organization are all symbols of professionalism. Maintaining clean and tidy workspace aid in the perception that an employee is professional and takes pride in their work. In conclusion, the main answer to the given question is "a lack of professionalism", and the importance of cleanliness, neatness, and organization as symbols of professionalism.
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Which of the following is a key output of project procurement management planning?
a. procurement statements of work
b. project website
c. quality metrics
d. quality checklists
a. Procurement statements of work. The key output of project procurement management planning is the procurement statements of work.
Procurement management involves the processes and activities related to acquiring goods and services from external suppliers or vendors to support the project's needs.
Procurement statements of work are documents that provide detailed descriptions of the goods, services, or results to be procured. They outline the project requirements, specifications, and any other relevant information that potential suppliers need to understand in order to submit proposals or bids. The statements of work help ensure that the project team and the suppliers are aligned in their understanding of the scope and expectations of the procurement.
These documents serve as a basis for the procurement process, including the creation of procurement documents such as requests for proposals (RFPs) or requests for quotations (RFQs). They also help in evaluating and selecting the most suitable suppliers or vendors to fulfill the project's procurement needs.
Therefore, the procurement statements of work are a key output that helps in effectively managing the procurement process and ensuring successful project execution.
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Which of the following actions would likely reduce potential conflicts of interest between shareholders and mangers? Select one: a. The portion of executive compensation in the form of cash is increased and the portion from performance related bonuses is decreased. b. The company's outside auditing firm is retained for a lucrative consulting engagement. c. The Board of Directors reduces its oversight and allows executives more freedom in operational decision making d. The company engages a firm of lobbyists to promote the dissolution of the Securities and Exchange Commission which is the source of most agency conflicts e. None of the above would reduce conflict of interest.
The action that would likely reduce potential conflicts of interest between shareholders and managers is option A.
Increasing the portion of executive compensation in the form of cash and decreasing the portion from performance-related bonuses would align the interests of the managers with those of the shareholders. This is because cash compensation is directly tied to the success of the company, while performance-related bonuses may incentivize managers to take actions that benefit themselves rather than the company as a whole.
Option B would increase the conflict of interest as the auditing firm may be influenced to provide favorable reports to the company to ensure continued consulting work. Option C would also increase the conflict of interest as it reduces oversight, which can lead to decisions that benefit managers at the expense of shareholders. Option D would be unethical and illegal, and would not reduce conflicts of interest. Therefore, the best option to reduce potential conflicts of interest is A.
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As we increase the number of stocks in a portfolio, the standard deviation of returns of the portfolio ________ if the stocks that comprise the portfolio are ________.
decreases; perfectly correlated
increases; not perfectly positively correlated
increases; perfectly correlated
decreases; not perfectly positively correlated
As we increase the number of stocks in a portfolio, the standard deviation of returns of the portfolio decreases if the stocks that comprise the portfolio are not perfectly positively correlated.
This is because perfect correlation between the stocks means that they move in the same direction, resulting in a reduction of diversifiable risk. Therefore, adding more stocks to the portfolio with perfect correlation will not increase the overall risk of the portfolio, leading to a decrease in the standard deviation of returns.
It is important to note that diversification can help reduce risk only if the stocks in the portfolio are not perfectly positively correlated with each other.
This is because diversification helps to reduce the overall risk of the portfolio by spreading it across multiple stocks, reducing the impact of individual stock volatility on the portfolio's total performance.
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High Country. Incorporated produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant's operation:
Beginning inventory
Units produced 42,000
Units sold 37.000
Selling price per unit $ 78
Selling and administrative expenses:
Variable per unit $2
Fixed (per month $ 567,000
Manufacturing costs:
Direct materials cost per unit $ 16
Direct labor cost per unit $6
Variable manufacturing overhead cost per unit $ 2
Fixed manufacturing overhead cost per month) $ 756,000
Management is anxious to assess the profitability of the new camp cot during the month of May Required: 1. Assume that the company uses absorption costing. a. Calculate the unit product cost b. Prepare an income statement for May 2. Assume that the company uses variable costing a. Calculate the unit product cost. b. Prepare a contribution format income statement for May
1. Under absorption costing, the unit product cost is $42, and the net income for May is $591,000.
Absorption Costing:
a. Unit Product Cost Calculation:
Unit Product Cost = Direct Materials Cost + Direct Labor Cost + Variable Manufacturing Overhead Cost + (Fixed Manufacturing Overhead Cost / Units Produced)
Given:
Direct Materials Cost per unit = $16
Direct Labor Cost per unit = $6
Variable Manufacturing Overhead Cost per unit = $2
Fixed Manufacturing Overhead Cost per month = $756,000
Units Produced = 42,000
Unit Product Cost = $16 + $6 + $2 + ($756,000 / 42,000)
Unit Product Cost = $16 + $6 + $2 + $18
Unit Product Cost = $42
b. Income Statement Preparation:
Sales Revenue = Units Sold * Selling Price per unit
Sales Revenue = 37,000 * $78 = $2,886,000
Cost of Goods Sold = Units Sold * Unit Product Cost
Cost of Goods Sold = 37,000 * $42 = $1,554,000
Selling and Administrative Expenses = Variable Selling and Administrative Expenses per unit * Units Sold + Fixed Selling and Administrative Expenses
Variable Selling and Administrative Expenses per unit = $2
Fixed Selling and Administrative Expenses = $567,000
Selling and Administrative Expenses = ($2 * 37,000) + $567,000 = $741,000
Net Income = Sales Revenue - Cost of Goods Sold - Selling and Administrative Expenses
Net Income = $2,886,000 - $1,554,000 - $741,000 = $591,000
2.Under variable costing, the unit product cost is $24, and the net income for May is $531,000.
Variable Costing:
a. Unit Product Cost Calculation:
Unit Product Cost = Direct Materials Cost + Direct Labor Cost + Variable Manufacturing Overhead Cost
Given:
Direct Materials Cost per unit = $16
Direct Labor Cost per unit = $6
Variable Manufacturing Overhead Cost per unit = $2
Unit Product Cost = $16 + $6 + $2
Unit Product Cost = $24
b. Contribution Format Income Statement Preparation:
Sales Revenue = Units Sold * Selling Price per unit
Sales Revenue = 37,000 * $78 = $2,886,000
Variable Expenses = (Direct Materials Cost + Direct Labor Cost + Variable Manufacturing Overhead Cost) * Units Sold + Variable Selling and Administrative Expenses per unit * Units Sold
Variable Selling and Administrative Expenses per unit = $2
Variable Expenses = ($24 * 37,000) + ($2 * 37,000) = $1,032,000
Fixed Expenses = Fixed Manufacturing Overhead Cost + Fixed Selling and Administrative Expenses
Fixed Manufacturing Overhead Cost = $756,000
Fixed Selling and Administrative Expenses = $567,000
Fixed Expenses = $756,000 + $567,000 = $1,323,000
Net Income = Sales Revenue - Variable Expenses - Fixed Expenses
Net Income = $2,886,000 - $1,032,000 - $1,323,000 = $531,000
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The FUNCTIONS of Money: a. The statement, "My iPhone is worth $500" represents money's function as b. What function is money serving when you keep it in a savings account until you need it in the future to buy something ? c. When the local supermarket accepts your $5 bill in exchange for bread and milk, the $5 is serving money's function as a
When the local supermarket accepts your $5 bill in exchange for bread and milk, the $5 is serving money's function as a medium of exchange.
a. The statement, "My iPhone is worth $500" represents money's function as a store of value. b. The function that money is serving when you keep it in a savings account until you need it in the future to buy something is serving money's function as a store of value. c. When the local supermarket accepts your $5 bill in exchange for bread and milk, the $5 is serving money's function as a medium of exchange. Among the three major functions of money, which include a store of value, a medium of exchange, and a unit of account, here's the way the following apply: a. The statement, "My iPhone is worth $500" represents money's function as a store of value. This function represents the ability of money to maintain value over time. In this sense, you can save your iPhone as a store of value because its value won't decline even if you don't use it. b. The function that money is serving when you keep it in a savings account until you need it in the future to buy something is serving money's function as a store of value. This function of money refers to the way it serves as a means of saving wealth for the future. People can save their money in a savings account, for example, and then use it later to purchase a big-ticket item like a house or a car. c. When the local supermarket accepts your $5 bill in exchange for bread and milk, the $5 is serving money's function as a medium of exchange. This function of money refers to the way it allows for the exchange of goods and services between buyers and sellers. In this way, the local supermarket will use the $5 to purchase bread and milk, and you can use it to get the goods you need.
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