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"In July, one of the processing departments at Okamura Corporation had beginning work in process inventory of $13,000 and ending work in process inventory of $18,000. During the month, the cost of units transferred out from the department was $148,000. In the department's cost reconciliation report for July, the total cost to be accounted for under the weighted-average method would be:"

Answers

Answer 1

Answer:

The total cost to be accounted for under the weighted-average method is $166,000

Explanation:

Okamura Corporation Partial Manufacturing Account

Particulars Amount

Cost of ending work in process inventory $18,000

Add: Cost of units transferred out $148,000

Total cost accounted for $166,000

The total cost to be accounted for under the weighted-average method is $166,000

Related Questions

Playful Pens, Inc., makes a single model of a pen. The cartridge for the pen (which contains the ink) is manufactured on one machine. The cartridge holder (which you hold when you use the pen)is manufactured on another machine. Monthly capacities and production levels are as follows:
Machine 1 (Cartridge) Machine 2 (Holders)
Monthly capacity 1,000,000 800,000
Monthly production 800,000 800,000
The company could sell 1,000,000 pens per month. The units (cartridge inside of holder) sell for $10.40 each and have a variable cost of $4.10 each. Fixed costs are $4,200,000 per month.
Required:
a. Is there a bottleneck at Playful Pens on Machine 1 or Machine 2?
A. Machine 1
B. Machine 2
b. Playful Pens's production supervisors state they could increase machine 2's capacity by 200,000 per month by producing holders on the weekend. Producing on the weekend would not affect the sales price. Variable cost per unit would increase by $1.10 for those produced on the weekend because of the premium paid to labor. Fixed costs would also increase by $820,000 per month.
b-1. Calculate the differential operating profit (loss). (Losses and amounts to be deducted should be indicated with a minus sign.)
Differential Revenues
Differntial costs:
Variable
Fixed
b-2. Should Playful Pens produce holders on the weekend?
Yes
No
c. Independent of the situation in requirement (b), Playful Pens could expand the capability of machine 2 by adding additional workers to perform ongoing maintenance. This would increase its capacity by 100,000 holders per month. This would not affect sales price or fixed costs, but would increase variable cost to $4.62 per unit for all units produced.
c-1. Calculate the differential operating profit (loss). (Losses and amounts to be deducted should be indicated with a minus sign.)
Differential revenues
Differential costs:
Variable cost increase on current production:
Variable cost on new production:
c-2. Should Playful Pens expand Machine 2's capability by adding these additional workers?
Yes
No

Answers

Answer:

a) B. Machine 2

b) $220,000

b-2) Yes , positive differential profit.

c-1) $162,000

c-2) Yes , positive differential profit.

Explanation:

B) Differential revenues = $10.40 x 200,000 = $2,080,000

Differential costs:

Variable cost on new production = $5.20 x 200,000 = $1,040,000

Fixed costs = $820,000

differential profit = $2,080,000 - $1,040,000 - $820,000 = $220,000

c) Differential revenues = $10.40 x 100,000 = $1,040,000

Differential costs:

Variable cost increase on current production = ($4.62 - $4.10) x 800,000 = $416,000

Variable cost on new production = $4.62 x 100,000 = $462,000

differential profit = $1,040,000 - $878,000 = $162,000

The market for plywood is characterized by the following demand and supply equations: QD = 800 – 10P and QS = 50P – 1,000, where P is the price per sheet of plywood and Q measures the quantity of plywood. What is the size of the deadweight loss if the government imposes a price ceiling of $25 per sheet of plywood?

Answers

Answer: Dead weight loss-= $3750

Explanation:

QD = 800 – 10P

QS = 50P – 1,000,

At equilibrium, quantity demanded is equal to quantity supplied , so we have that, equating the two equations becomes

800 - 10p = 50p - 1000.

800 + 1000 = 50p + 10p

1800 = 60p

p = $30.

QD= QS= 800 - 10*30 = 500 units

QD= QS= 50x30 -1000= 500 units

Qd = Qs = 500 units.

When P = $25 by government putting a price ceiling, which is below the equilibrium price,it will lead to more demand than supply in the market

QD = 800 – 10P

QD= 800-10X25

QD=800-250= 550units

QS = 50P – 1,000,

Qs = 50 X25 - 1000

= 1,250-1000

QS = 250 units.

When quantity demanded =250units as a result of Quantity supplied at 250units. we will have our new price to be

QD = 800 – 10P

250 = 800 - 10p

10p = 800 -250

10p = 550

p = $55.

To calculate Dead weight Loss, we use the formulae,

0.5 x (P2 - P1) x (Q1 - Q2) where P1 and P2 are old and new prices and Q1 AND Q2 are old and new quantities

DWL = 0.5 x (55-25) X (500-250)

= 0.5 x 30x 250

Dead weight loss = $3750.

The employees of an organization have heard rumors about rapidly dropping profits and impending layoffs. The grapevine is abuzz with bad news. People are nervous and anxious, and are starting to believe whatever is being said without verifying the source. In this situation, an appropriate action for a manager to take is to

Answers

Answer:

A. neutralize the rumor by openly confirming any parts that may be true.

Explanation:

Here are the options to this question:

A. neutralize the rumor by openly confirming any parts that may be true.

B. restrict the length of breaks taken by the employees.

C. closely monitor each employee's activities in the office.

D. fire employees found spreading false stories.

E. block all forms of electronic communication in the office.

I hope my answer helps you

Our Lady of the Lake Hospital has assembled a group of employees to engage in planning activities. If the group comprises top executives such as the Chief Executive Officer, Chief Financial Officer, and Chief Marketing Officer, they would likely create

Answers

Answer: a. long-term plans.

Explanation:

Long term plans in a business are considered Strategic Plans. Strategic plans aim to formulate general long term goals and visions for what the company aims to do in future and what level they aim to be at.

These types of goals are usually for the policy makers in a company being the Top Executives who are tasked with the long term growth of the company.

The Top Executives come up with these plans and then the Mid and lower level managers come up with tactical and operational plans to meet the objectives of the plans.

completion. Item8 Part 5 of 5 10 points Return to questionItem 8Item 8 Part 5 of 5 10 points Required information [The following information applies to the questions displayed below.] In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2023. Information related to the contract is as follows: 2021 2022 2023 Cost incurred during the year $ 2,542,000 $ 3,772,000 $ 2,074,600 Estimated costs to complete as of year-end 5,658,000 1,886,000 0 Billings during the year 2,020,000 4,294,000 3,686,000 Cash collections during the year 1,810,000 3,800,000 4,390,000 Westgate recognizes revenue over time according to percentage of completion. 5. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss amounts should be indicated with a minus sign.)

Answers

Answer and Explanation:

The computation of amount of revenue and gross profit (loss) to be recognized in each of the three years is shown below:-

Sales revenue for the present period for 2021 = $31,00,000.00

Sales revenue for the present period for 2022 = $46,00,000.00

Sales revenue for the present period for 2023 = $23,00,000.00

Gross Profit for year 2021 = $5,58,000.00

Gross profit for year 2022 = $8,28,000.00

Gross profit for year 2023 = $2,25,400.00

To reach the sales revenue we simply deduct the Sales revenue recognized in previous period from Sales revenue recognized till date for 3 years on the other hand to compute the gross profit we simply deduct the Cost incurred during the year from Sales revenue for the present period for 3 years.

For clarification we attached the spreadsheet to reach the sales revenue and gross profit for 3 years.

g You want to save sufficient funds to generate an annual cash flow of $50,000 a year for 20 years as retirement income. You currently have no retirement savings but plan to save an equal amount each year for the next 30 years until your retirement. How much do you need to save each year if you can earn 8 percent on the savings? (10 Points)

Answers

Answer:

You need to save $4,012.45 each year

Explanation:

Pertiuty in 20 years is $50,000.

So the amount must be in account after 30 years saving to enough for above pertiuty is calculated as below:

= $50000/(1+8%)+ $50000/(1+8%)^2+......+$50000/(1+8%)^20

= $50,000 * Annuity Factor ( 1-20 years) of 8%

=$50000*9.818

= $490,907

To have $490,907 (FV) in account after 30 years (tenor), now you have save an amount each year (PMT) calculated as below:

$490,907 = PMT*(1+8%)^30+....PMT*(1+8%)^2 + PMT*(1+8%)

= PMT * Discount Factor ( 1-30 years) of 8%

$490,907 = PMT * 122.346

-> PMT = $490,907/ 122.346

= $4,012.45

Mr. Hobbes Bed & Breakfast is considering the replacement of some old equipment. The new equipment will cost $86,000 including delivery and installation. The old equipment to be replaced has a book value of $60,200 and can be sold pre-tax for $61,200. If the firm’s effective tax rate is 25%, compute the net investment.

Answers

Answer:

$25,550

Explanation:

For computing the net investment first we have to find out the loss or gain on sale of old equipment which is shown below:

Sale value = $61,200

Less: Book value of old equipment = $60,200

Gain = $1000

Now

Tax on gain is

= $1,000 × 25%

= $250

So, the net gain is

= $1,000 - $250

= $750

Now the net investment is

= Cost of new equipment - sale value pre tax + net gain

= $86,000 - $61,200 + $750

= $25,550

Answer:

Net Investment = $25,550

Explanation:

Given:

Sale value (old equipment) = $61,200

Book value of old equipment = $60,200

New equipment cost = $86,000

Effective tax rate = 25%

Computation

Gain on sale = $61,200 - $60,200

Gain on sale = $1,000

Amount of tax on gain = $1000 × 25%

Amount of tax on gain = $250

Net Gain = Gain on sale - Amount of tax on gain

Net Gain = $750

Net Investment = Cost of new equipment - (Sale value - Net Gain)

Net Investment = $86,200 - (61,200 - 750)

Net Investment = $25,550

A semi-variable cost:
A. Increases and decreases directly and proportionately with changes in volume.
B. Changes in response to a change in volume, but not proportionately.
C. Increases if volume increases, but remains constant if volume decreases.
D. Changes inversely in response to a change in volume.

Answers

Answer:

B. Changes in response to a change in volume, but not proportionately.

Explanation:

A semi variable cost (or mixed cost) is a cost or expense that is partially fixed (does not change according to production output) and is also partially variable (changes according to production output). An example of semi variable costs are utilities which have a fixed minimum level per month and they increase as production output increases. Another example is the cost of a car, where insurance and lease payments are fixed but gas and maintenance expenses vary according to the number of miles driven.

Dexter Consulting, Inc. recently reported the following information: Net income = $395,000 Sales = $700,000 Total Assets = $1.5 million Tax rate = 21% Interest expense = 13,000 Accounts Payable = 74,000 Notes Payable = 900,000 Accruals = 12,000 After-tax cost of capital = 10% What is the company’s EVA?

Answers

Answer:

$170,650

Explanation:

economic value added (EVA) = NOPAT – (WACC x capital invested)

NOPAT = net operating profits after taxWACC = weighted average cost of capitalcapital invested = assets - current liabilities

NOPAT = net income x (1 - 21%) = $395,000 x 0.79 = $312,050

WACC = 10%

capital invested = $1,500,000 - $74,000 (accounts payable) - $12,000 (accruals) = $1,414,000

EVA = $312,050 - (10% x $1,414,000) = $312,050 - $141,400 = $170,650

Alexander and Kristin are executive managers at Safety First Fall Safety Equipment Co. They realize that within the last several quarters, they have been treating the performance metrics from the company's two very distinct divisions the same rather than focusing on the unique aspects of each division. They have inaccurately assessed divisional performance as a result. Alexander and Kristin realize they have fallen prey to a cognitive bias known as:_______

a. common measures bias
b. motivated reasoning
c. surrogation
d. uncommon measures bias

Answers

Answer:

The correct answer to the following question will be Option A (Common measures bias).

Explanation:

CMS occurs because once variations throughout order to respond have been triggered either by method rather than with the real propensities of the participants that only the equipment is trying to expose.It suggested a lack of desire on the part of the decision-maker to integrate specific knowledge because this knowledge provides additional cognitive effort. It's streamlined.

The remaining three solutions are not relevant to the situation in question. So Choice A is the right one.

s) A system has four processes and five types of allocatable resources. The current allocation and maximum needs are as follows: Allocated Maximum Available Process A 2 1 0 2 2 4 2 2 3 3 3 2 x 2 3 Process B 3 1 1 0 2 3 3 6 1 2 Process C 2 1 0 2 1 3 2 3 3 1 Process D 1 1 0 1 0 1 2 3 2 1 What is the smallest value of x for which this is a safe state? Show all steps.

Answers

Answer:

The smallest value of x is 5 which leads to a safe state.

Explanation:

Solution

Given that:

Process Available Maximum Request = Max-Available

A [2 ,1 ,0 ,2, 2] [4, 2,2, 3, 3] [2,1,2,1,1]

B [3 ,1, 1, 0 ,2] [3 ,3 ,6 ,1 ,2] [0,2,5,1,0]

C [2 ,1 ,0 ,2 ,1 ] [3 ,2 ,3 ,3 ,1] [1,1,3,1,0]

D [1, 1, 0, 1, 0 ] [1, 2, 3, 2 ,1 ] [0,1,3,1,1]

Available = 3,2,x,2,3 ⇒ x has to be determined.

Now

consider x=1 then Available = 3,2,1,2,3

It can't satisfy A,B,C,D since the minimum value of x among those is 2

Consider x=2 then Available = 3,2,2,2,3

It can't satisfy B,C,D since the minimum value of x among those is 3

Thus

consider x=3 then Available = 3,2,3,2,3

It can't satisfy D since the minimum value of x among those is 5

Then

consider x=5 then Available = 3,2,5,2,3

It can satisfy A,B,C,D

Therefore, the minimum value of x is 5. So, that it leads to a safe state.

A computer's operating system serves as a link between humans and machines. A resource allocator is another title for it.

Solution:-

Given that:-

Process Available Maximum Request = Max-Available

A [2 ,1 ,0 ,2, 2] [4, 2,2, 3, 3] [2,1,2,1,1]

B [3 ,1, 1, 0 ,2] [3 ,3 ,6 ,1 ,2] [0,2,5,1,0]

C [2 ,1 ,0 ,2 ,1 ] [3 ,2 ,3 ,3 ,1] [1,1,3,1,0]

D [1, 1, 0, 1, 0 ] [1, 2, 3, 2 ,1 ] [0,1,3,1,1]

Available = 3,2,x,2,3 ⇒ x has to be determined.

Now , consider x=1 then Available = 3,2,1,2,3

It can't satisfy A,B,C,D since the minimum value of x among those is 2

Consider x=2 then Available = 3,2,2,2,3

It can't satisfy B,C,D since the minimum value of x among those is 3

Thus, consider x=3 then Available = 3,2,3,2,3

It can't satisfy D since the minimum value of x among those is 5

Then ,consider x=5 then Available = 3,2,5,2,3

It can satisfy A,B,C,D

Therefore, the minimum value of x is 5. So, that it leads to a safe state.

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Capitan Inc. made an entry to record the return of inventory that the company previously purchased on account. If the company uses a perpetual inventory system, the entry to record the returned inventory includes a:____________

Answers

Answer:

Dr Accounts payable

Cr Merchandise inventory

Explanation:

The original purchase entry using the perpetual should be:

Dr Merchandise inventory XX

Cr Accounts payable XX

If the company returns some or all the merchandise purchased, then the journal entry should be:

Dr Accounts payable YY

Cr Merchandise inventory YY

If the company used the periodic inventory system, then the accounts would be different. Perpetual inventory directly debits or credits merchandise inventory account, it doesn't use the purchases account.

The original purchase entry using the periodic system should be:

Dr Purchases XX

Cr Accounts payable XX

If the company returns some or all the merchandise purchased, then the journal entry should be:

Dr Accounts payable YY

Cr Purchases returns and allowances YY

You are an owner of a bakery, and you meet with other neighborhood bakery owners. In an attempt to increase sales, you collectively decide to lower prices by 10%. Which of the following are consequences of this price change?
A. The supply of fresh baked goods will decrease.
B. The quantity supplied of fresh baked goods will decrease.
C. Demand for processed baked goods will decrease.
D. The supply of fresh baked goods will increase.
E. The demand for fresh baked goods will not change.
F. The demand for fresh baked goods will increase.

Answers

Answer:

The quantity supplied of fresh baked goods will decrease ( B )

Demand for processed baked goods will decrease. ( C )

The demand for fresh baked goods will not change ( E )

Explanation:

When the neighbourhood bakery owners agree to lower prices of goods by 10% it will not have any effect on the demand for fresh baked goods hence the demand for fresh baked goods will not change because the demand for fresh baked goods have an in-elastic curve

Also since there is s drop in price the quantity supplied by the suppliers will decrease. while The demand for processed baked goods will decrease because of the substitute it has in fresh baked goods that just got its price slashed by 10%

Suppose that a labor economist performs a statistical analysis on economywide worker wages using standard, measurable explanatory factors, such as job characteristics, years of schooling, and so forth. How much of the variation in worker wages can be accounted for by such measurable explanatory factors

Answers

Answer: Somewhat less than 50%

Explanation:

Here is the complete question;

a. Somewhat less than 50%.

b. Somewhat more than 60%

c. Nearly 100%

d. About 0%?

The variables which are typically removed from the quantitative analysis of wages are those which cannot be directly measured, directly observed or normative in nature.

Chance plays a vital role in deciding ones wage, the type of job one applies for and gets, and the salary that can be gotten. Chance cannot neither be measured nor observed. Natural ability cannot also be quantified, observed or measured. These variables are also subject to normative judgement.

Based on this analysis, the measurable traits will account for less than 50% of total variation in the wages.

In the long-run, a company will choose a manufacturing plant size that has the Multiple Choice minimum average total cost of producing the target level of output. maximum level of resource use per unit of the total product of output. capacity to produce the largest quantity of the product. minimum of average fixed costs.

Answers

Answer:

minimum average total cost of producing the target level of output.

Explanation:

Firms will always seek a profit maximizing output. This means that they will choose a manufacturing plant that allows them to sell more units while keeping the lowest possible marginal costs. This means that they will focus on choosing a production level that minimizes the average total cost for a certain amount of expected production.

Stockholders’ equity of ABC Company consists of 88,000 shares of $5 par value, 10% cumulative preferred stock and 320,000 shares of $1 par value common stock. Both classes of stock have been outstanding since the company’s inception. ABC did not declare any dividends in the prior year, but it now declares and pays a $165,000 cash dividend at the current year-end. Determine the amount distributed to each class of stockholders for this two-year-old company.

Answers

Answer:

Explanation:

Calculation of dividend amount for the preferred shareholders

Preferred Dividend =Per value of share * Dividend rate * Number of years

=88,000*5 * 10% * 2\

=$88,000

Thus cash dividend paid to common shareholder is $88,000

Calculations of cash dividend amount for common shareholder

Common share dividend= $165,000 - $88,000

=$77,000

Thus cash dividend paid to common shareholder is $77,000

Cherokee Inc. is a merchandiser that provided the following information: Amount Number of units sold 13,000 Selling price per unit $ 16 Variable selling expense per unit $ 2 Variable administrative expense per unit $ 3 Total fixed selling expense $ 21,000 Total fixed administrative expense $ 15,000 Beginning merchandise inventory $ 11,000 Ending merchandise inventory $ 25,000 Merchandise purchases $ 88,000 Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement.

Answers

Answer:

1. Gross margin is $134,00; and Net profit is $33,000.

2. Contribution margin is $69,000; and Net profit is $33,000.

Explanation:

To prepare the statements, the following calculations are done first:

Sales revenue = Number of units sold * Selling price per unit = 13,000 * $16 = $208,000

Variable selling expenses = Number of units sold * Variable selling expense per unit = 13,000 * $2 = $26,000

Total selling expenses = Variable selling expenses + Total fixed selling expense = $26,000 + $21,000 = $47,000

Variable administrative expense = Number of units sold * Variable administrative expense per unit = 13,000 * $3 = $39,000

Total administrative expense = Variable administrative expense + Total fixed administrative expense = $39,000 + $15,000 = $54,000

Cost of goods sold = Beginning merchandise inventory + Merchandise purchases - Ending merchandise inventory = $11,000 + $88,000 - $25,000 = $74,000

The statements are now prepared as follows:

1. Prepare a traditional income statement.

The purpose of the traditional income statement is to obtain the gross margin and the net profit. These can be obtained as follows:

Cherokee Inc.

Traditional income statement

Details $

Sales 208,000

Cost of goods sold (74,000)

Gross margin 134,000

Selling and Admin. Expenses:

Selling expenses (47,000)

Administrative expense (54,000)

Net profit 33,000

2. Prepare a contribution format income statement

The purpose of the contribution format income statement is to obtain the contribution margin and the net profit. These can be obtained as follows:

Cherokee Inc.

Contribution format income statement

Details $

Sales 208,000

Variable expenses:

Cost of goods sold (74,000)

Selling expenses (26,000)

Administrative expense (39,000)

Contribution margin 69,000

Fixed expenses:

Selling expenses (21,000)

Administrative expense (15,000)

Net profit 33,000

Note:

Note that under both methods, the net profit is the same. This always holds no matter the method used.

Answer:

Instructions are below.

Explanation:

Giving the following information:

Amount Number of units sold 13,000

Selling price per unit $16

Variable selling expense per unit $2

Variable administrative expense per unit $3

Total fixed selling expense $21,000

Total fixed administrative expense $15,000

Beginning merchandise inventory $11,000

Ending merchandise inventory $25,000

Merchandise purchases $88,000

First, we need to calculate the cost of goods sold:

COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory

COGS= 11,000 + 88,000 - 25,000= 74,000

1) Traditional income statement:

Sales= 13,000*16= 208,000

COGS= (74,000)

Gross profit= 134,000

Total selling expense= (2*13,000) + 21,000= (47,000)

Total administrative expense= (3*13,000) + 15,000= (54,000)

Net operating income= 33,000

2) Contribution format income statement:

Total variable cost= (3 + 2)*13,000 + 74,000= $139,000

Sales= 208,000

Total variable cost= (139,000)

Contribution margin= 69,000

Total fixed selling expense= (21,000)

Total fixed administrative expense= (15,000)

Net operating income= 33,000

Inventory records for Dunbar Incorporated revealed the following: Date Transaction Number of Units Unit Cost Apr. 1 Beginning inventory 490 $ 2.49 Apr. 20 Purchase 410 2.72 Dunbar sold 600 units of inventory during the month. Ending inventory assuming FIFO would be

Answers

Answer:

$816

Explanation:

Calculation for Dunbar Incorporated Ending inventory

Formula for Ending inventory units using FIFO method:

Ending inventory units = Beginning balance + Purchase -sales

Leg plug in the formula

490+410 - 600

= 300units

Calculation for Ending inventory

Ending inventory = 300*2.72

= $816

Therefore the Ending inventory assuming FIFO method is use would be $816

Suppose there are 11 buyers and 11 sellers, each willing to buy or sell one unit of a good, with values {$14, $13, $12, $11, $10, $9, $8, $7, $6, $5, $4,}. Assume no transaction costs and a competitive market. If there is a market maker in this market. What is the profit maximizing bid-ask spread per unit for a market maker? a. $9 bid; $9 ask b. $6 bid; $12 ask c. $8 bid; $10 ask d. $7 bid; $11 ask

Answers

Answer:

Explanation:

From the question given; The objective here is to determine the profit maximizing bid-ask spread per unit for a market maker. In order to achieve that; The demand supply schedule of the number of units bought and sold need to be computed which is shown in the table below.

Price Quantity demanded by buyers Quantity sold by sellers

$14 1 11

$13 2 10

$12 3 9

$11 4 8

$10 5 7

$9 6 6

$8 7 5

$7 8 4

$6 9 3

$5 10 2

$4 11 1

However; As the two transactions are happening simultaneously; There are 11 people participating in buying of a good and selling from one person to the other.

But the maximum even number of people that can be part of this trade is only 10 people.

So; for the individual having an higher value for the good will be able to afford it and which are those that falls into the category of $14,$13,$12,$11,$10,$9 can place bid for the good.

On the other hand, the individual having a lower value for the good will sell it and which are those that falls into the category of $4,$5,$6,$7,$8,$9 and would want to sell it for the ask price of the good.

In this trend, we understand that the individual valuing the good for $9 won't be able to participate due to the fact that He appears on both trends because in the demand side , he have the lowest willingness to pay and at the seller's side he has the the highest value for the good and that the equilibrium price in this market is $ 9 because at this price the quantity demanded equals quantity supplied .

Thus; we can conclude that there are 5 transactions in the maximizing bid-ask spread per unit for a market maker.

Consider a hypothetical closed economy in which households spend $0.60 of each additional dollar they earn and save the remaining $0.40. The marginal propensity to consume (MPC) for this economy is0.6 , and the spending multiplier for this economy is . Suppose the government in this economy decides to increase government purchases by $400 billion. The increase in government purchases will lead to an increase in income, generating an initial change in consumption equal to . This increases income yet again, causing a second change in consumption equal to . The total change in demand resulting from the initial change in government spending is .

Answers

Answer:

The total change in demand resulting from the initial change in government spending is $1,000 billion

Explanation:

Marginal propensity to consume (MPC) = As with every additional increase in income, consumption increases by 0.60.

MPC = change in Consumption / Change in Income = [tex]\Delta C/\Delta Y[/tex]

[tex]\Delta C/\Delta Y[/tex] = 0.60 / 1

MPC = 0.60.

Spending or Expenditure Multiplier = 1 ÷ (1 - MPC)

Spending Multiplier = 1 ÷ (1 - 0.6) = 1 ÷ 0.4 = 2.5.

The consumption will increase by MPC, with 1 dollar increased, consumption increased by 0.60

Therefore, with $400 billion increase, Consumption will increase by 0.60 × 400 billion = $240 billion.

This increases income, causing a change in consumption at second times equal $240 billion × 0.6 = $144 billion.

The total change in income by this increment in government spending equals as:

Change in Demand = Multiplier × change in G

Change in Demand= $400 billion × 2.5 = $1,000 billion.

The total change in demand resulting from the initial change in government spending is $1,000 billion

Marginal propensity to consume = change in Consumption / Change in Income

Marginal propensity to consume = 0.60 / 1

Marginal propensity to consume = 0.60

Spending Multiplier = 1 / (1 - MPC)

Spending Multiplier = 1 / (1 - 0.6)

Spending Multiplier = 1 / 0.4

Spending Multiplier = 2.5.

Consumption will increase = 0.60 × 400 billion

Consumption will increase = $240 billion.

Consumption will increase second time = $240 billion × 0.6

Consumption will increase second time = $144 billion.

Change in Demand = Multiplier × Spending Multiplier

Change in Demand = $400 billion × 2.5

Change in Demand = $1,000 billion

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Flynn Industries has three activity cost pools and two products. It estimates production 3,000 units of Product BC113 and 1,500 of Product AD908. Having identified its activity cost pools and the cost drivers for each pool, Flynn accumulated the following data relative to those activity cost pools and cost drivers.

Annual Overhead Data Estimated Use of Cost Drivers per Product
Activity Cost Pools Cost Drivers Estimated Overhead Estimated Use of Cost Drivers per Activity Product BC113 Product AD908
Machine setup Setups $16,000 40 25 15
Machining Machine hours 110,000 5,000 1,000 4,000
Packing Orders 30,000 500 150 350

Required:
Prepare a schedule showing the computations Of the activity-based Overhead rates per cost driver.

Answers

Answer:

Instructions are below.

Explanation:

Giving the following information:

Machine setup Setups $16,000 40 25 15

Machining Machine hours $110,000 5,000 1,000 4,000

Packing Orders $30,000 500 150 350

To calculate the estimated manufacturing overhead rate we need to use the following formula:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Machine setup= 16,000/(40+25+15)= $200 per setup

Machining= 110,000/ (5,000 + 1,000 + 4,000= $11 per machine hour

Packing= 30,000/ (500 + 150 + 350)= $30 per order

Bonds often pay a coupon twice a year. For the valuation of bonds that make semiannual payments, the number of periods doubles, whereas the amount of cash flow decreases by half. Using the values of cash flows and number of periods, the valuation model is adjusted accordingly. Assume that a $1,000,000 par value, semiannual coupon U.S. Treasury note with five years to maturity (YTM) has a coupon rate of 3%. The yield to maturity of the bond is 11.00%. Using this information and ignoring the other costs involved, calculate the value of the Treasury note:

Answers

Answer:

Value of treasury Note =$698,494.97

Explanation:

The value of the notes is the present value of the future cash inflows discounted at its YTM of 11%

Value of Notes = PV of interest + PV of RV

The value of Note can be worked out as follows:

Step 1 :Calculate the PV of Interest payment

Present value of the interest payment

PV = Interest payment × (1- (1+r)^(-n))/r

r-Yield to Maturity, n- number of years

Interest payment = 3% × $1,000,000 × 1/2= $15,000 .

Semi-annual interest yield = 11%/2 =5.5%

PV = 15,000 × (1 - (1.055)^(-5×2)/0.055) = 113,064.3874

Step 2 :PV of redemption Value

PV of RV = RV × (1+r)^(-n)

= 1000,000 × (1.055)^(-5×2)

= 585,430.57

Step 3

Calculate Value of the Notes

=113,064.3874 + 585,430.57

= $698,494.96

Value of treasury Note =$698,494.97

against the foregoing background obtain any road road traffic policy and demonstrate your understanding of that particular policy in relation to its level. in your discussion indicate your role as traffic a prospective traffic law enforcement personnel

Answers

Answer:

road traffic policy is the application if safety measures to keep both vehicle owners and pedestrians safety or ensures safety in the road.

Explanation:

hope it helps .

Bannister Co. is thinking about having one of its products manufactured by a subcontractor. Currently, the cost of manufacturing 1,000 units is: Direct material $ 45,000 Direct labor 30,000 Factory overhead (30% is variable) 98,000 If Bannister can buy 1,000 units from an outside supplier for $100,000, it should:

Answers

Answer:

Production total cost= $104,400

It is more profitable to buy the product.

Explanation:

Giving the following information:

Production costs (1,000 units):

Direct material $ 45,000

Direct labor $30,000

Factory overhead (30% is variable) 98,000

Buy:

1,000 units from an outside supplier for $100,000.

I will assume that the fixed overhead is not avoidable, therefore it should not be taken into account for the decision making.

Production total cost= 45,000 + 30,000 + (98,000*0.3)

Production total cost= $104,400

It is more profitable to buy the product.

g Suppose that more British decide to vacation in the U.S. and that the British purchase more U.S. Treasury bonds. Ignoring how payments are made for these purchases, a. the first action by itself raises U.S. net exports, the second action by itself raises U.S. net capital outflow. b. the first action by itself raises U.S. net exports, the second action by itself lowers U.S. net capital outflow. c. the first action by itself lowers U.S. net exports, the second action by itself raises U.S. net capital outflow. d. the first action by itself lowers U.S. net exports, the second action by itself lowers U.S. net capital outflow.

Answers

Answer:

b. the first action by itself raises U.S. net exports, the second action by itself lowers U.S. net capital outflow.

Explanation:

Net exports are equal to the difference between the value of a nation's total export of goods, services and the value of all the goods and services it imports.

U.S. net export raises as more British decide to vacation in the U.S. and U.S. net capital outflow reduces as the British purchase more U.S. Treasury bonds.

So, option b is correct.

Identifying Cost Drivers in an ABC system
Patterson makes electronic components for handheld games and has identified several activities as components of manufacturing overhead: factory rent, factory utilities, quality inspections, materials handling, machine setup, employee training, machine maintenance, inventory security costs, and supervisor salaries. For each activity that Patterson has identified, choose a cost driver to allocate that cost. Explain your reasoning.

Answers

Answer:

Factory Rent : No of days worked

Factory Utilities: Units of utility consumed

Quality Inspection : Hours of inspection on production run

Material Handling : No of orders received

Machine Setup : Machine hours

Employee Training : Hours worked

Machine Maintenance : Machine hours used

Inventory Security Costs : Finished goods units

Supervisor Salary : No of workers

Explanation:

A cost driver is unit of activity on which cost is allocated. Cost driver is considered as a direct cause of the cost. In ABC costing cost are allocated to the goods based on the cost drivers.

Vanishing Games Corporation (VGC) operates a massively multiplayer online game, charging players a monthly subscription of $10. At the start of January 2015, VGC’s income statement accounts had zero balances and its balance sheet account balances were as follows:

Cash $2,360,000
Accounts Receivable 152,000
Supplies 19,100
Equipment 948,000
Land 1,920,000
Building 506,000
Accounts Payable 109,000
Unearned Revenue 152,000
Notes Payable (due 2018) 80,000
Common Stock 2,200,000
Retained Earnings 3,364,100

In addition to the above accounts, VGC’s chart of accounts includes the following: Service Revenue, Salaries and Wages Expense, Advertising Expense, and Utilities Expense.

Required:
1. Analyze the effect of the January transactions (shown below) on the accounting equation, and indicate the account, amount, and direction of the effect (+ for increase and − for decrease) of each transaction. (Enter any decreases to account balances with a minus sign.)

a. Received $52,250 cash from customers for subscriptions that had already been earned in 2014.
b. Received $235,000 cash from Electronic Arts, Inc. for service revenue earned in January.
c. Purchased 10 new computer servers for $41,900; paid $12,000 cash and signed a three-year note for the remainder owed.
d. Paid $15,600 for an Internet advertisement run on Yahoo! in January.
e. Sold 10,100 monthly subscriptions at $10 each for services provided during January. Half was collected in cash and half was sold on account.
f. Received an electric and gas utility bill for $5,900 for January utility services. The bill will be paid in February.
g. Paid $310,000 in wages to employees for work done in January.
h. Purchased $5,100 of supplies on account.
i. Paid $5,100 cash to the supplier in (h).

2. Prepare journal entries for the January transactions listed in part 1, using the letter of each transaction as a reference.
3. Create T-accounts, enter the beginning balances shown above, post the journal entries to the T-accounts, and show the unadjusted ending balances in the T-accounts.
4. Prepare an unadjusted trial balance as of January 31, 2015.

Answers

Answer:

Vanishing Games Corporation (VGC)

1. Analysis of the effect of transactions on the accounting equation:

Assets = Liabilities + Equity

Assets (Cash) increases +$52,500 and Assets (Accounts Receivable) decreases -$52,500 = Liabilities + Equity.

b. Assets (Cash) increases +$235,000 = Liabilities + Equity (Retained Earnings) increase + $235,000.

c. Assets (Equipment) increases +41,900; Cash decreases -$12,000 = Liabilities (Notes Payable) increase +$29,900 + Equity.

d. Assets (Cash) decreases -$15,600 = Liabilities + Equity (Retained Earnings) decrease - $15,600.

e. Assets (Cash) increases + $50,500 and (Accounts Receivable) increases + $50,500 = Liabilities + Equity (Retained Earnings) increase + $101,000.

f. Assets = Liabilities (Accounts Payable) increase +$5,900 + Equity (Retained Earnings) decrease -$5,900.

g. Assets (Cash) decreases - $310,000 = Liabilities + Equity (Retained Earnings) decreases - $310,000.

h. Assets (Supplies) increase + $5,100 = Liabilities (Accounts Payable) increase +$5,100 + Equity.

i. Assets (Cash) decreases - $5,100 = Liabilities (Accounts Payable) decrease - $5,100 + Equity.

2. Journal Entries:

a. Debit Cash Account $52,500

Credit Accounts Receivable $52,500

To record cash from customers.

b. Debit Cash Account $235,000

Credit Service Revenue $235,000

To record cash for service revenue.

c. Debit Equipment $41,900

Credit Cash Account $12,000

Credit Notes Payable $29,900

To record purchase of 10 new computer services

d. Debit Advertising Expense $15,600

Credit Cash Account $15,600

To record payment for advertising.

e. Debit Cash Account $50,500

Debit Accounts Receivable $50,500

Credit Service Revenue $101,000

To record subscriptions for services sold.

f. Debit Utilities Expense $5,900

Credit Utilities Payable $5,900

To record utilities expense.

g. Debit Wages & Salaries Expense $310,000

Credit Cash Account $310,000

To record wages paid.

h. Debit Supplies Account $5,100

Credit Accounts Payable $5,100

To record purchase of supplies on account.

i. Debit Accounts Payable $5,100

Credit Cash Account $5,100

To record payment on account.

3. T-Accounts:

Cash Account

Beginning Balance $2,360,000 c. Equipment 12,000

a. Accounts Receivable 52,250 d. Advertising Expense 15,600

b. Electronic Arts, Inc. 235,000 g. Wages & Salaries 310,000

e. Service Revenue 50,500 i. Accounts Payable 5,100

Balance c/d 2,355,050

2,697,750 2,697,750

Balance b/d 2,355,050

Accounts Receivable

Beginning Balance 152,000 a. Cash 52,250

e. Service Revenue 50,500 Balance c/d 150,250

202,500 202,500

Balance b/d 150,250

Supplies

Beginning Balance 19,100 Balance c/d 24,200

Accounts Payable 5,100

24,200 24,200

Balance b/d 24,200

Equipment

Beginning Balance 948,000 Balance c/d 989,900

c. Cash 12,000

c. Notes Payable 29,900

989,900 989,900

Balance b/d 989,900

Land

Beginning Balance 1,920,000

Building

Beginning Balance 506,000

Accounts Payable

i. Cash 5,100 Beginning Balance 109,000

Balance c/d 109,000 h. Supplies 5,100

114,100 114,100

Balance b/d 109,000

Unearned Revenue

Beginning Balance 152,000

Advertising Expense

d. Cash 15,600

Utilities Expense

f. Utilities Payable 5,900

Utilities Payable

f. Utilities Expense 5,900

Wages & Salaries Expense

g. Cash 310,000

Service Revenue

b. Cash 235,000

Balance c/d 336,000 e. Cash 50,500

e. Accounts Receivable 50,500

336,000 336,000

Balance b/d 336,000

Notes Payable (due 2018)

Balance c/d 109,900 Beginning Balance 80,000

c. Equipment 29,900

109,900 109,900

Balance b/d 101,000

Common Stock

Beginning Balance 2,200,000

Retained Earnings

Beginning Balance 3,364,100

4. Trial Balance as at January 31:

Debit Credit

Cash $2,355,050

Accounts Receivable 150,250

Supplies 24,200

Equipment 989,900

Land 1,920,000

Building 506,000

Advertising expense 15,600

Utilities Expense 5,900

Utilities Payable $5,900

Wages & Salaries 310,000

Service Revenue 336,000

Notes Payable 109,900

Accounts Payable 109,000

Unearned Revenue 152,000

Common Stock 2,200,000

Retained Earnings 3,364,100

Total $6,276,900 $6,276,900

Explanation:

a) Note: the adjustment of the Utilities could have been eliminated to produce the same result, with totals reduced by $5,900.

Vanishing Games Corporation (VGC)

Answer 1:

Analysis of the effect of transactions on the accounting equation:

Assets = Liabilities + Equity

a. Assets (Cash) increases +$52,500 and Assets (Accounts Receivable) decreases -$52,500 = Liabilities + Equity.