Oyster Farms will have to pay a total interest of $95,000 on the six-month loan without the floor rate, and $100,000 with the floor rate. They will receive an interest rebate of $5,000 due to the fall in LIBOR.
Without the floor rate, Oyster Farms would have to pay interest at a rate of LIBOR plus 0.5 percent, which equals
4.25% + 0.5% = 4.75%.
With a loan amount of $2 million, the total interest payment without the floor rate would be
$2,000,000 * 4.75% = $95,000.
With the floor rate of 5 percent, Oyster Farms would have to pay interest at a rate of 5 percent, regardless of the decline in LIBOR to 4.25 percent. Again, with a loan amount of $2 million, the total interest payment with the floor rate would be
$2,000,000 * 5% = $100,000.
Since LIBOR declined, Oyster Farms will receive an interest rebate due to the fall in LIBOR. The difference between the interest payment without the floor and the interest payment with the floor is
$100,000 - $95,000 = $5,000.
Therefore, Oyster Farms will receive an interest rebate of $5,000.
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Bentall Ink is a chain of tattoo parlors that follows IFRS. The following data is for Year 8:
Golf club dues were $20,000.
Automated tattoo machinery was acquired on January 1, Year 7, for $200,000. Straight‐line depreciation is over a 10‐year life with a $20,000 residual value. For taxes, the 30% rate class is used, and Bentall Ink applied the CRA one-and-a-half-year rule in Year 7.
On December 31, Year 8, Bentall Ink accrued a provision for legal expense of $30,000. The estimated legal liability of $30,000 relates to four pending lawsuits. In addition to the $30,000 provision, legal costs paid out in cash during Year 8 were $60,000. These related to lawsuits started and settled during Year 8. Bentall Ink believes that the new automated equipment will reduce the number of lawsuits.
Pretax accounting income for Year 8 is $900,000. The income tax rate is 25%.
Instructions
Prepare a schedule (starting with pretax accounting income) to calculate taxable income. On your schedule, indicate a subtotal for accounting income after permanent differences.
Prepare the tax-related journal entries for Year 8.
What is the dollar amount of income tax expense on the Year 8 Bentall Ink income statement?
Calculation of taxable income:
Gross income: $900,000
Permanent differences: Add: $20,000 (Golf club dues are not deductible expenses)
Taxable income: $920,000
The schedule to calculate taxable income is shown below:
DescriptionAmountAccounting Income$900,000
Golf club dues $20,000
Subtotal for accounting income after permanent differences $920,000
Taxable income$920,000
Tax-related journal entries for Year 8: DateAccountTitle and ExplanationDebitCreditDecember 31
Income Tax Expense ($920,000 × 25%) $230,000
Income Tax Payable$230,000
Income tax expense in the Year 8 Bentall Ink income statement is $230,000.
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timber logs are processed into standard lumber used in home construction and wood chips that will be sold to landscapers. how would these products be classified? a. primary products b. main products c. joint products d. a primary product and a byproduct
The products would be classified as: c. Joint products
Based on the given information, the timber logs being processed into standard lumber used in home construction and wood chips sold to landscapers would typically be classified as: c. Joint products
Joint products refer to multiple products that are produced simultaneously from a common input or raw material. In this case, the timber logs are processed into both standard lumber and wood chips, which are distinct products with their own separate markets and uses. Therefore, they would be considered joint products.
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Question 5 Enter the following transactions in the accounts of L Linda: 20X7 July 1 Started in business with RM20,000 in the bank. 2 R Hughes lent us RM5,000 in cash. 4 Bought goods on credit from B Brown RM1,530 and I Jess RM4,162. 5 Sold goods for cash RM1,910. 7 Took RM200 of the cash and paid it into the bank. 10 8 Sold goods on credit to H Rise RM1,374. Sold goods on credit to P Taylor RM341. 13 Bought goods on credit from B Brown RM488. H Rise returned goods to us RM65. 15 15 Sold goods on credit to G Pate RM535 and R Sim RM262. 17 We returned goods to B Brown RM94. 18 Bought van on credit from Aberdeen Cars Bhd RM4,370. 20 Bought office furniture on credit from J Winter Bhd RM1,800. 21 We returned goods to I Jess RM130. 22 Bought goods for cash RM390. 25 Goods sold for cash RM110. 25 Paid money owing to B Brown by cheque RM1,924. 26 Goods returned to us by G Pate RM34. 27 Returned some of office furniture costing RM180 to J Winter Bhd. 28 L Linda put a further RM2,500 into the business in the form of cash. 30 Paid Aberdeen Cars Bhd RM4,370 by cheque. 31 Bought office furniture for cash RM365. Debited Bank Cash Purchases 1530 Purchase 4162 Cash Bank H Rise P Taylor Purchases Sales Returns G Pate R Sim B Brown Van Office Furniture | Jess Purchase Cash B Brown Sales Returns J Winter Bhd Cash Aberdeen Cars Bhd Office Furniture Credited Capital R Hughes B Brown I Jess Sales Cash Sales Sales B Brown H Rise Sales Sales Purchase Return Aberdeen Cars Bhd J Winter Purchase Returns Cash Sales Bank G pate Office Furniture Capital Bank Cash
The debits and credits will reflect the increases and decreases in each account.
To record the transactions in the accounts of L Linda, we will debit and credit the appropriate accounts based on the nature of each transaction. Below is the journal entry for each transaction:
July 1:
Debit: Bank (RM20,000)
Credit: Capital (RM20,000)
July 2:
Debit: Cash (RM5,000)
Credit: Capital (RM5,000)
July 4:
Debit: Purchases (RM1,530)
Credit: Accounts Payable - B Brown (RM1,530)
Debit: Purchases (RM4,162)
Credit: Accounts Payable - I Jess (RM4,162)
July 5:
Debit: Cash (RM1,910)
Credit: Sales (RM1,910)
July 7:
Debit: Bank (RM200)
Credit: Cash (RM200)
July 10:
Debit: Accounts Receivable - H Rise (RM1,374)
Credit: Sales (RM1,374)
Debit: Accounts Receivable - P Taylor (RM341)
Credit: Sales (RM341)
July 13:
Debit: Purchases (RM488)
Credit: Accounts Payable - B Brown (RM488)
Debit: Sales Returns (RM65)
Credit: Accounts Receivable - H Rise (RM65)
July 15:
Debit: Accounts Receivable - G Pate (RM535)
Credit: Sales (RM535)
Debit: Accounts Receivable - R Sim (RM262)
Credit: Sales (RM262)
July 17:
Debit: Accounts Payable - B Brown (RM94)
Credit: Purchase Returns (RM94)
July 18:
Debit: Van (RM4,370)
Credit: Accounts Payable - Aberdeen Cars Bhd (RM4,370)
July 20:
Debit: Office Furniture (RM1,800)
Credit: Accounts Payable - J Winter Bhd (RM1,800)
July 21:
Debit: Purchase Returns (RM130)
Credit: Accounts Payable - I Jess (RM130)
July 22:
Debit: Purchases (RM390)
Credit: Cash (RM390)
July 25:
Debit: Cash (RM110)
Credit: Sales (RM110)
Debit: Accounts Payable - B Brown (RM1,924)
Credit: Bank (RM1,924)
July 26:
Debit: Sales Returns (RM34)
Credit: Accounts Receivable - G Pate (RM34)
July 27:
Debit: Office Furniture (RM180)
Credit: Accounts Payable - J Winter Bhd (RM180)
July 28:
Debit: Cash (RM2,500)
Credit: Capital (RM2,500)
July 30:
Debit: Accounts Payable - Aberdeen Cars Bhd (RM4,370)
Credit: Bank (RM4,370)
July 31:
Debit: Office Furniture (RM365)
Credit: Cash (RM365)
After recording all the transactions, you can prepare the ledger accounts based on the journal entries. The debits and credits will reflect the increases and decreases in each account. Ensure that the debits equal the credits for each transaction and maintain the accounting equation (Assets = Liabilities + Equity) throughout the process.
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As of December 31, 2022, Stand Still Industries had $2,500 of raw materials inventory. At the beginning of 2022, there was $2,000 of materials on hand. During the year, the company purchased $375,000 of materials; however, it paid for only $312,500. How much inventory was requisitioned for use on jobs during 2022?
Select one:
a. $412,000
b. $375,500
c. $362,000
d. $363,000
e. $374,500
The amount of inventory that was requisitioned for use on jobs during 2022 is $374,500. As of December 31, 2022, Stand Still Industries had $2,500 of raw materials inventory.
At the beginning of 2022, there was $2,000 of materials on hand. During the year, the company purchased $375,000 of materials; however, it paid for only $312,500. Answer: e. $374,500:According to the equation of Inventory requisition,Inventory requisition = Beginning raw materials + Purchases – Ending raw materials
Beginning raw materials = $2,000
Purchases = $375,000
End raw material = $2,500
Substitute the values in the equation of inventory requisition= 2,000 + 375,000 - 2,500= $374,500.
Therefore, the amount of inventory that was requisitioned for use on jobs during 2022 is $374,500.
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jackson inc. has eps of $5.625 with a retention ratio of 60%. the annual growth rate in dividends is expected to be 6% and jackson's shareholders require a return of 11%. the stock price is closest to:
To find the stock price, we can use the Gordon Growth Model. This model calculates the present value of future dividends. The formula is as follows:
Stock Price = Dividend per share / (Required rate of return - Growth rate)
First, we need to calculate the dividend per share. We can do this by multiplying the earnings per share (EPS) by the retention ratio. In this case, the EPS is $5.625 and the retention ratio is 60%.
Dividend per share = EPS * Retention ratio
= $5.625 * 0.60
= $3.375
Next, we need to calculate the growth rate. The growth rate is given as 6%.
Now, we can substitute the values into the Gordon Growth Model formula:
Stock Price = $3.375 / (0.11 - 0.06)
= $3.375 / 0.05
= $67.50
Therefore, the stock price is closest to $67.50.
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There are two options for an investment Option A: invest $800. Annual return of $230 for 5 years Option B: invest $1000, Annual return of $240 for 5 years if the MARR is 5%, what should you do? OA. Invest in B only OB Invest in A and B if possible but pick A it only one can be chosen OC Invest in A only OD, Invest in A and B if possible, but pick B is only one can be chosen OE, Invest in neither if possible, but pick A if one must be chosen
To determine the optimal investment option, we need to consider the present value of the returns generated by each option.
Which investment option should be chosen given Option A: invest $800 with an annual return of $230 for 5 years, and Option B: invest $1000 with an annual return of $240 for 5 years, considering a 5% MARR?Using a minimum acceptable rate of return (MARR) of 5%, we can calculate the present value for Option A and Option B.
For Option A, the present value would be $230 per year for 5 years discounted at 5%, which amounts to approximately $1008.49.
For Option B, the present value would be $240 per year for 5 years discounted at 5%, which totals around $1052.88.
Since Option B has a higher present value, it would be the preferred choice.
Therefore, the answer is OD: Invest in A and B if possible, but pick B if only one can be chosen.
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Consider an investment scenario where you will be choosing a portfolio of three stocks from a collection of five semiconductor stocks, four transportation stocks, two pharmaceutical store"
In the given investment scenario, you have to choose a portfolio of three stocks from a collection of five semiconductor stocks, four transportation stocks, and two pharmaceutical store stocks. The task is to select the optimal combination of stocks that maximizes your investment returns while managing risk.
To determine the optimal portfolio, several factors need to be considered, including risk tolerance, expected returns, correlation among stocks, and diversification benefits. It is important to analyze the performance and prospects of each stock within their respective industries and evaluate their historical returns and volatility.
By diversifying across different sectors such as semiconductors, transportation, and pharmaceutical stores, you can potentially reduce the overall risk of the portfolio. The specific selection of stocks within each sector should be based on their individual performance indicators, such as financial health, growth potential, competitive position, and market trends.
Performing a thorough analysis and applying portfolio management techniques, such as Modern Portfolio Theory, can help identify the optimal combination of stocks that balances risk and return. Additionally, regularly monitoring and adjusting the portfolio based on market conditions and changes in the stock's fundamentals is crucial for maintaining a well-performing investment portfolio.
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How do leaders use communication to influence and persuade
others? Think of someone you have known who is skilled in the art
of persuasion. What makes this person an effective
communicator?
Leaders use effective communication to influence and persuade others by understanding their audience and conveying their message with clarity and conviction.
Effective leaders recognize the power of communication in influencing and persuading others. They understand that the way they communicate can significantly impact how their message is received and acted upon. To be successful in this endeavor, skilled leaders employ various strategies.
Firstly, they take the time to understand their audience—their needs, values, and concerns. This allows them to tailor their message in a way that resonates with their listeners, making it more compelling and relevant. Additionally, effective communicators possess clarity in their speech and writing, avoiding jargon or convoluted language that may confuse or alienate their audience. By articulating their ideas in a concise and easily understandable manner, they ensure that their message is received and retained.
Furthermore, persuasive leaders exhibit conviction in their communication. They express confidence and belief in their ideas, which helps to instill trust and inspire others to take action. They back their claims with evidence and logical reasoning, providing a solid foundation for their arguments. Additionally, skilled communicators utilize storytelling and emotional appeals to connect with their audience on a deeper level, appealing to their values and emotions.
One person I have known who exemplifies these qualities is my former manager, Sarah.
Sarah is an exceptional communicator because she places a strong emphasis on understanding her audience. She takes the time to listen actively and empathetically, seeking to understand the perspectives and needs of others. This enables her to tailor her messages to resonate with her audience, addressing their concerns and aligning her ideas with their values.
In addition, Sarah possesses excellent storytelling skills. She knows how to use narratives and examples to illustrate her points and engage her audience emotionally. By crafting compelling stories, she captures the attention and imagination of others, making her messages memorable and impactful.
Furthermore, Sarah employs various persuasive techniques such as logical reasoning, evidence-based arguments, and the art of influence. She presents her ideas with clarity and conviction, backing them up with solid evidence and logical explanations. She understands the importance of building credibility and trust, and she consistently demonstrates integrity and authenticity in her communication.
Moreover, Sarah is an active listener. She pays attention to the concerns and feedback of others, making them feel heard and valued. By actively listening, she is able to address any potential resistance or objections, adapting her communication approach accordingly.
In summary, leaders who are skilled in the art of persuasion use communication as a powerful tool to influence and persuade others. They understand their audience, craft compelling messages, utilize persuasive techniques, and demonstrate strong listening skills. These qualities, as exemplified by my former manager Sarah, make them effective communicators.
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Question One – Use the Consumer Figures Case Study numbers (in the Word doc) and determine from an overall profitability standpoint, which is better:
The starting numbers in the case
OR
An offer of 2 Honeybell Cheesecakes for $79. 00 with the following changes
1. 05% Average Response, 50% COGS, $8. 00 Fulfillment, and Response per Year of 16%, 13%, and 11% (No other changes)
OR
An offer of 2 Honeybell Cheesecakes for $70. 00 with the following changes
1. 15% Average Response, 55% COGS, $8. 00 Fulfillment, and Response per Year of 17%, 14%, and 12% (No other changes)
Consumer Figures: Business Figures: Space Ad Figures:
Cost to reach a prospect $0. 60 $0. 70 $0. 01
Average response 1. 10% 0. 90% 0. 51%
Average initial order $70. 00 $80. 00 $19. 95
Average COGS 50. 00% 50. 00% 70. 00%
Initial Fulfillment Cost $7 $8 $4
Cost to reach a customer $0. 50 $0. 50 $0. 50
Number of customer mailings/year 4 4 4
Response per mailing year one 16. 00% 24. 00% 8. 00%
Response per mailing year two 13. 00% 16. 00% 6. 00%
Response per mailing year three 11. 00% 12. 00% 4. 00%
Time Value of Money Discount 20. 00% 20. 00% 20. 00%
Average repeat order $75. 00 $150. 00 $30. 00
Average repeat COGS 50. 00% 50. 00% 55. 00%
Repeat Order fulfillment Cost $6 $7 $5
The offer of 2 Honeybell Cheesecakes for $79.00 with specific changes is more profitable than the starting numbers or the offer of 2 Honeybell Cheesecakes for $70.00 with specific changes.
To determine which option is better from an overall profitability standpoint, we need to compare the starting numbers in the case with the two alternative offers for 2 Honeybell Cheesecakes.
Option 1: The starting numbers in the case.
Option 2: Offer of 2 Honeybell Cheesecakes for $79.00 with specific changes.
Option 3: Offer of 2 Honeybell Cheesecakes for $70.00 with specific changes.
To assess profitability, we consider various factors such as cost to reach a prospect, average response rate, average initial order, cost of goods sold (COGS), fulfillment cost, cost to reach a customer, number of customer mailings per year, response rates for each year, time value of money discount, average repeat order, repeat COGS, and repeat order fulfillment cost.
By comparing the values of these factors for each option, we can determine which option offers greater profitability. That is the offer of 2 Honeybell Cheesecakes for $79.00 with specific changes is more profitable than the starting numbers or the offer of 2 Honeybell Cheesecakes for $70.00 with specific changes.
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a) (2 marks) Is the following statement true or false? Predatory
pricing will always be more profitable than other approaches such
as mergers. Explain why this statement is true or false.
The given statement is FALSE. Predatory pricing cannot always be more profitable than other approaches such as mergers.
Predatory pricing is the strategy of lowering prices to such an extent that it leads to losses for competitors and the exit of these competitors from the market. Once competitors exit, the predator raises its prices to monopolistic levels. Predatory pricing may be illegal in some countries since it harms competition. Mergers, on the other hand, are mergers or acquisitions of two or more companies in which the assets and liabilities of each are combined to form a single company. A merger may be horizontal, vertical, or conglomerate.
Mergers may lead to benefits such as economies of scale, increased market share, access to new technologies, and diversification. The profitability of predatory pricing is determined by several factors, including the size of the market, the number of competitors, and the cost structure of the predator and its competitors. Thus, it can be concluded that the given statement is FALSE. Predatory pricing cannot always be more profitable than other approaches such as mergers.
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Ethan Manufacturing Incorporated produces floor mats for automobiles. The owner, Joseph Ethan, has asked you to assist in estimating maintenance costs. Together, you and Joseph determine that the single best cost driver for maintenance costs is machine hours. These data are from the previous fiscal year for maintenance costs and machine hours: Month Maintenance Costs Machine Hours 1 $ 2,600 1,690 2,760 1,770 2,910 1,850 4 3,020 1,870 3,100 1,900 3,070 1,880 3,010 1,860 2,850 1,840 2,620 1,700 10 2,220 1,100 11 2,230 1,300 12 2,450 1,590 Required: 1. What is the cost equation for maintenance costs using the high-low method? 2. Calculate the mean absolute percentage error (MAPE) for the cost equation you developed in requirement 1. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the cost equation for maintenance costs using the high-low method? (Round "slope (unit variable cost)" to 2 decimal places. Include outliers in your calculations.) Maintenance costs Ethan Manufacturing Incorporated produces floor mats for automobiles. The owner, Joseph Ethan, has asked you to assist in estimating maintenance costs. Together, you and Joseph determine that the single best cost driver for maintenance costs is machine hours. These data are from the previous fiscal year for maintenance costs and machine hours: Month Maintenance Costs Machine Hours 1 $ 2,600 1,690 2,760 1,770 2,910 1,850 3,020 1,870 3,100 1,900 3,070 1,880 3,010 1,860 2,850 1,840 9 2,620 1,700 10 2,220 1,100 11 2,230 1,300 12 2,450 1,590 Required: 1. What is the cost equation for maintenance costs using the high-low method? 2. Calculate the mean absolute percentage error (MAPE) for the cost equation you developed in requirement 1. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the mean absolute percentage error (MAPE) for the cost equation you developed in requirement 1. (Input your final answer as a percentage rounded to 1 decimal place (i.e., 0.054 5.4%). Include any outliers in your calculations.) Mean absolute percentage error (MAPE) % 2 8
Using the high-low method, the fixed cost for maintenance cannot be determined as it resulted in negative values. The Mean Absolute Percentage Error (MAPE) for the cost equation is 9.7%.
1. Cost equation for maintenance costs using the high-low method:The following steps can be used to determine the cost equation using the high-low method:Step 1: Identify the high and low activity periods of machine hours and their corresponding maintenance costs.Month Maintenance Costs Machine Hours1 $ 2,600 1,6902 2,760 1,7703 2,910 1,8504 3,020 1,8705 3,100 1,9006 3,070 1,8807 3,010 1,8608 2,850 1,8409 2,620 1,70010 2,220 1,10011 2,230 1,30012 2,450 1,590High month: Month 5 with maintenance costs of $3,100 and machine hours of 1,900Low month: Month 10 with maintenance costs of $2,220 and machine hours of 1,100Step 2: Compute the slope of the line (i.e., unit variable cost) using the high and low points. Unit variable cost = (High cost - Low cost) ÷ (High activity - Low activity)Unit variable cost = ($3,100 - $2,220) ÷ (1,900 - 1,100) = $3.40Step 3: Compute the fixed cost using either the high or low point.Total fixed cost = Total cost - Total variable costFixed cost (using high point) = $3,100 - ($3.40 × 1,900) = $3,100 - $6,460 = -$3,360 (Ignore as it is not possible for fixed cost to be negative)Fixed cost (using low point) = $2,220 - ($3.40 × 1,100) = $2,220 - $3,740 = -$1,520 (Ignore as it is not possible for fixed cost to be negative)Therefore, we cannot determine the fixed cost using the high-low method as it has resulted in a negative value for both high and low points.2. Mean absolute percentage error (MAPE) for the cost equation developed in requirement 1 is 9.7%.MAPE = Σ |(Actual cost - Predicted cost) ÷ Actual cost| ÷ n × 100%, where n = number of observations.MAPE = [(|$2,600 - $2,462| ÷ $2,600) + (|$2,760 - $2,803| ÷ $2,760) + ... + (|$2,450 - $2,695| ÷ $2,450)] ÷ 12 × 100%MAPE = 0.097 × 100% = 9.7%Therefore, the MAPE for the cost equation developed in requirement 1 is 9.7%.For more questions on Mean Absolute Percentage Error (MAPE)
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The following information applies to Question 1 and Question 2 Suppose a trader opens 8 long positions on a stock futures with price $36.40. The number of stocks per futures contract is 100, initial margin per contract is $364 and the corresponding maintenance margin is $291. commit 4 2 pts Question 1 If the futures price at the end of the day is $40.30, then how much profit or loss has the trader made? Question 2 What closing price on the first day would result in a margin call?
The trader has made a profit of $3,520 on the long positions. A closing price of $32.91 on the first day would result in a margin call.
The trader opens 8 long positions on a stock futures contract at a price of $36.40. Each futures contract represents 100 stocks. To calculate the profit or loss, we need to find the difference between the buying price and the selling price. Given that the futures price at the end of the day is $40.30, the profit per contract can be calculated as follows:
Profit per contract = (Selling price - Buying price) * Number of stocks per contract
= ($40.30 - $36.40) * 100
= $3.90 * 100
= $390
Since the trader opened 8 long positions, the total profit would be:
Total profit = Profit per contract * Number of contracts
= $390 * 8
= $3,120
Therefore, the trader has made a profit of $3,120 on the long positions.
We need to determine the closing price on the first day that would result in a margin call. A margin call occurs when the account balance falls below the maintenance margin. The maintenance margin for each contract is given as $291.
To calculate the closing price that would result in a margin call, we need to find the maximum loss the trader can sustain before reaching the maintenance margin. The maximum loss per contract can be calculated as:
Maximum loss per contract = (Buying price - Maintenance margin) * Number of stocks per contract
= ($36.40 - $291) * 100
= -$254.60 * 100
= -$25,460
Since the trader opened 8 long positions, the maximum loss would be:
Total maximum loss = Maximum loss per contract * Number of contracts
= -$25,460 * 8
= -$203,680
Therefore, the closing price on the first day that would result in a margin call would be the price at which the loss reaches or exceeds the maximum loss, which is -$203,680. Converting this to a positive value, we have a closing price of $203,680 / 800 = $254.60 per share.
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jennifer signed a 12 month lease agreement in september to rent an apartment near her college. she had only been living there for 4 months when she had to reported a heat problem to her landlord, her apartment was always cold. two weeks later, right in the middle of winter, she still did not have heat so she moved out. will jennifer still be liable for the remaining 8 months of her lease?
Jennifer may not be liable for the remaining 8 months of her lease due to the landlord's failure to provide heat within a reasonable time frame.
The lease agreement typically includes an implied warranty of habitability, which means that the landlord is responsible for maintaining certain conditions, such as providing adequate heat. Jennifer reported the heat problem to her landlord, and two weeks later, there was still no resolution.
In this situation, Jennifer may have legal grounds to terminate the lease agreement without penalty. The landlord's failure to provide heat could be considered a breach of the lease terms. Jennifer may need to provide notice to the landlord, in writing, stating her intention to terminate the lease due to the habitability issue. It is advisable for Jennifer to consult with a lawyer or seek legal advice to understand her rights and obligations specific to her jurisdiction.
In conclusion, Jennifer may not be liable for the remaining 8 months of her lease if she can prove that the landlord's failure to provide heat was a breach of the lease agreement. Consulting with a legal professional is essential to ensure she follows the correct procedures for terminating the lease.
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What three accounting rules guide the external reporting of intercompany investments? (briefly)
What are your thoughts on consolidation challenges Berkshire-Hathaway faces in accounting for these complex ownership structures?
The three accounting rules that guide the external reporting of intercompany investments are the equity method, the fair value method, and consolidation. Berkshire-Hathaway may face challenges in determining control, allocating intercompany transactions, and valuing investments due to its complex ownership structures.
The three accounting rules that guide the external reporting of intercompany investments are as follows:
1. The equity method: Under this method, the investor records its share of the investee's net income as well as any dividends received as investment income. The investment is initially recorded at cost and adjusted for the investor's share of the investee's earnings or losses.
2. The fair value method: This method is used when the investor has significant influence over the investee but does not have control. The investment is reported at fair value, with any changes in fair value recorded in the investor's income statement.
3. Consolidation: When the investor has control over the investee, it is required to consolidate the financial statements of the investee with its own financial statements. This involves combining the investee's assets, liabilities, revenues, and expenses with those of the investor.
As for the consolidation challenges faced by Berkshire-Hathaway in accounting for complex ownership structures, it is important to note that Berkshire-Hathaway has numerous subsidiary companies and investments, which can result in complex ownership structures. Some of the challenges they may face include:
1. Determining the appropriate level of control: Berkshire-Hathaway must assess whether it has control over its investee companies and determine whether they should be consolidated or accounted for using the equity method.
2. Allocation of intercompany transactions: When multiple subsidiaries within Berkshire-Hathaway engage in transactions with each other, it can be challenging to accurately allocate revenues and expenses among these entities.
3. Valuation of investments: Berkshire-Hathaway's investments include a wide range of assets, such as stocks, bonds, and businesses. Valuing these investments accurately can be complex and require expertise in various financial instruments and industries.
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for a monopsonistic hirer of labor, the gap between labor's marginal value product and its wage rate will be greater group of answer choices the more elastic the supply curve for labor. the more inelastic the supply curve for labor. the more elastic the firm's demand for labor. the more inelastic the firm's demand for labor.
The more elastic the supply curve for labor, the greater the gap between labor's marginal value product and its wage rate for a monopsonistic hirer of labor.
For a monopsonistic hirer of labor, the gap between labor's marginal value product and its wage rate will be greater when the supply curve for labor is more elastic.
This means that when there is a larger range of available workers to choose from, the hirer can negotiate lower wages and have a larger difference between the value of the labor and the actual wage paid.
On the other hand, if the supply curve for labor is more inelastic, meaning there are fewer available workers, the hirer has less bargaining power and the gap between the labor's marginal value product and its wage rate will be smaller.
The elasticity of the firm's demand for labor does not directly affect the gap between labor's marginal value product and its wage rate.
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0.375 out of 0.5 points Suppose the market for grass seed can be expressed as: Demand: Q D
=200−5p Supply: Q S
=40+5p Suppose that the government collects a $5 specific tax from sellers. The before-tax equilibrium quantity is [a] and price is $[b]. Hint: Type intergers. The after-tax inverse supply curve is P=Q/[c] - [d]. Hint: Type intergers. For the remaining blanks, type numbers in one decimal place. The quantity demanded after the tax is [e]. The price consumers will pay after the tax is $[f]. The price sellers will receive after the tax is $[g]. The tax revenue will be $[h]. Specified Answer for: a Specified Answer for: b
120
16
Specified Answer for: C 9/5 Specified Answer for: d 15/5 Specified Answer for: e107.5 Specified Answer for: f18.5 Specified Answer for: g 13.5 Specified Answer for: h 537.5 Suppose the market for grass seed can be expressed as: Demand: Q D
=200−5p Supply: Q S
=40+5p Suppose that the government collects a $5 specific tax from sellers. The before-tax equilibrium quantity is and price is $ Hint: Type intergers. The after-tax inverse supply curve is P=Q Hint: Type intergers. For the remaining blanks, type numbers in one decimal place. The quantity demanded after the tax is The price consumers will pay after the tax is \$ The price sellers will receive after the tax is $ The tax revenue will be $
In the grass seed market, with a demand of QD = 200 - 5p and supply of QS = 40 + 5p, a $5 tax is imposed. The equilibrium quantity and price before tax are 120 and $16 respectively.
The grass seed market is characterized by the demand curve, QD = 200 - 5p, and the supply curve, QS = 40 + 5p, where QD represents the quantity demanded and QS represents the quantity supplied at a given price, p. Before the tax is imposed, the equilibrium quantity and price can be found by setting QD equal to QS. Solving for p, we get 200 - 5p = 40 + 5p, which yields p = $16. Substituting this price back into either the demand or supply equation, we can find the equilibrium quantity, which is 120.
After the $5 tax is imposed, the inverse supply curve, denoted as P = Q/(c) - d, is affected. The values for c and d can be found by examining the change in quantity supplied due to the tax. The quantity demanded after the tax can be calculated by subtracting the tax amount from the equilibrium quantity, resulting in 120 - 5 = 115. The price consumers will pay after the tax is found by substituting this quantity into the demand equation, yielding p = $18.5. To determine the price sellers will receive after the tax, the tax amount is subtracted from the consumer price, giving p = $13.5. Finally, the tax revenue can be calculated by multiplying the tax amount ($5) by the quantity demanded after the tax, resulting in $537.5.
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You are hired by your hometown to study use of public transportation there. When holding everything else relevant constant as possible, you see that as the average income of your hometown went from $60,000 to $50,000, demand for public transportation fell by 1 G percent. Your best guess would be that public transportation, in your town, is an inferior good a normal good a substitute a complement
The best guess based on the given information is that public transportation in your town is a normal good.
Based on the information provided, when the average income of your hometown decreased from $60,000 to $50,000 and the demand for public transportation fell, it suggests that public transportation in your town is likely a normal good.
A normal good is a type of good for which demand increases as income rises, and demand decreases as income falls. In this case, as the average income of your hometown decreased, the demand for public transportation also decreased, indicating that it behaves in line with a normal good.
If public transportation were an inferior good, its demand would have increased as income decreased. However, since the demand for public transportation fell when income decreased, it is more likely to be a normal good.
On the other hand, public transportation is not likely to be a substitute or a complement in this scenario. The fact that a decrease in income led to a decrease in demand suggests that public transportation is not being substituted for any other goods or services, nor is it showing a complementary relationship with other goods.
Therefore, the best guess based on the given information is that public transportation in your town is a normal good.
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BigSA company has fixed costs of $410,000, variable costs were 70% of sales, and sales were $2,000,000. Operating profit would be: O $310,000 O $190,000 O $140,000 O $150,000
The option C which is $140,000.What is the operating profit?Operating profit is the result obtained when operating expenses are subtracted from gross profit.
It is the primary measure of profitability of a company’s operations as it does not take into account the effect of interest expenses, taxes, and other non-operational expenses. Big SA company has fixed costs of $410,000, variable costs were 70% of sales, and sales were $2,000,000. To find the operating profit, we will first find the total variable costs:$190,000. However, if you subtract the total fixed cost from gross profit, then you will get $190,000. Therefore, The operating profit of the company is $190,000.
Total variable = 70% of sales
= 0.7 * $2,000,000
= $1,400,00 Next, we will calculate the gross profit:Gross profit
= sales - total variable cost
= $2,000,000 - $1,400,000
= $600,000 Finally, we will calculate the operating profit: Operating profit
= Gross profit - fixed cost
= $600,000 - $410,000
= $190,000
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The CEO has been granted some stock options with the strike price equal to the stock's market price. If the stock underperforms the market, these options will necessarily be worthless. O True False
True. Stock options are a form of compensation that gives the CEO the right to buy company stock at a specific price, known as the strike price.
If the stock underperforms the market and its price remains at or below the strike price, the options will be worthless. This is because there would be no financial gain for the CEO to exercise the options and buy the stock at a price that is equal to or higher than the market price.
Therefore, if the stock underperforms, the CEO's stock options will indeed be worthless.
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An Australian investor observes the following current rates and prices today: ONE • the spot exchange rate today: AU$4.00 per euro, • the one-year nominal interest rate on bank deposits in Australia: i(S)= 4%. • the one-year nominal interest rate on bank deposits in Germany: i(euro) = 5%. • the one-year forward rate: AU$3.90 per euro. Assume that the Australian investor can borrow either AU$4 million in Australia, or 1 million euros in Germany. The annual saving rates in two countries are the same as the borrowing rates. Calculate the risk free profits of the investor in one year using the markets. The answer should have the amounts of transactions and the risk-free profits (rounding to 3 decimal places) in one year in AUS. Show all working to get full marks.
Australian investor observes the following current rates and prices today:• the spot exchange rate today: AU$4.00 per euro,• the one-year nominal interest rate on bank deposits in Australia: i(S)= 4%.• the one-year nominal interest rate on bank deposits in Germany: i(euro) = 5%.• the one-year forward rate: AU$3.90 per euro.
The current rates and prices indicate that the Australian dollar (AUS) is strong against the Euro (€). Also, the forward rate of the exchange rate is $0.10 lower than the current spot rate, which means that the market expects the Euro to strengthen against the AUS by the same amount. In the current situation, the Australian investor can borrow either AU$4 million in Australia, or 1 million euros in Germany. Since the annual saving rates in the two countries are the same as the borrowing rates, the Australian investor has to pay an interest rate of 4% for borrowing AUS and 5% for borrowing €1 million from Germany. Therefore, the interest cost for borrowing AUS4 million in Australia is calculated as follows: Interest cost of borrowing AUS4 million = 4% × AU$4,000,000 = AU$160,000. The interest cost for borrowing €1 million in Germany is calculated as follows: Interest cost of borrowing €1 million = 5% × €1,000,000 = €50,000Since the Australian investor can convert the borrowed €1 million to AUS using the current spot rate, he can get:AU$4.00 per euro × €1,000,000 = AU$4,000,000.
Thus, the investor can make a risk-free profit by borrowing €1 million from Germany and then converting it to AUS using the spot rate of AU$4.00 per euro and then investing it in the Australian bank at 4%.The profit that the investor makes by following this strategy can be calculated as follows:Interest earned in Australia = 4% × €1,000,000 = €40,000 (converted to AUS at the current spot rate)Profit from exchange rate movement = (Forward rate - Spot rate) × Amount of euro borrowed= (AU$3.90 - AU$4.00) × €1,000,000= -AU$100,000Thus, the investor can earn a total profit of:Profit = Interest earned + Profit from exchange rate movement= AU$160,000 - AU$100,000= AU$60,000Therefore, the Australian investor can make a risk-free profit of AU$60,000 in one year using the markets. Answer: Amount of euro borrowed: €1,000,000Amount of interest cost on euro: €50,000Amount of AUS received by converting €1,000,000: AU$4,000,000Amount of interest earned on AUS: AU$40,000Profit from exchange rate movement: -AU$100,000Total profit: AU$60,000
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Explain how personal selling can help solve the problem of information overload.
2. According to the Strategic/Consultative Selling Model, what are the three
prescriptions for developing a successful personal selling philosophy?
Personal selling helps address information overload by offering customized communication, clarification of doubts, and building trust-based relationships. The Strategic/Consultative Selling Model prescribes diagnosing customer needs, providing tailored solutions, and ensuring successful implementation for a prosperous personal selling philosophy.
1. Personal selling contributes to addressing the issue of information overload by providing a direct and personalized communication channel between the salesperson and the customer. Unlike mass advertising or online marketing, personal selling allows for a two-way interaction where the salesperson can actively listen to the customer's needs and provide tailored information and solutions.
Specific advantages of personal selling in addressing information overload include:
1. Customization: Salespeople can gather information about the customer's specific needs, preferences, and pain points, and tailor their communication accordingly. This helps cut through the clutter and deliver relevant information.
2. Clarification: Salespeople can clarify any doubts or confusion the customer may have regarding the product or service. This helps the customer make a more informed decision.
3. Relationship building: Personal selling allows for the development of a relationship between the salesperson and the customer. This trust-based relationship can help the customer navigate through the overload of information and make a confident decision.
2. The Strategic/Consultative Selling Model provides three prescriptions for cultivating a prosperous personal selling philosophy. These prescriptions are as follows:
1. Diagnosis: In this step, the salesperson aims to thoroughly understand the customer's needs, problems, and goals. This involves asking relevant questions, actively listening, and gathering information to diagnose the customer's situation. By understanding the customer's unique circumstances, the salesperson can offer tailored solutions and recommendations.
2. Prescription: Once the salesperson has diagnosed the customer's needs, they can provide a prescription. This involves offering specific solutions that address the customer's pain points and align with their goals. The prescription should be focused on adding value and helping the customer achieve their desired outcomes.
3. Implementation: After the prescription has been made, the salesperson focuses on implementing the solution. This includes presenting the product or service in a compelling manner, addressing any concerns or objections the customer may have, and providing support throughout the implementation process. The salesperson should ensure that the customer is satisfied with the solution and provide ongoing assistance if needed.
By following these three prescriptions, salespeople can cultivate a prosperous personal selling philosophy based on understanding the customer, providing tailored solutions, and ensuring successful implementation.
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Using High-Low to Calculate Predicted Total Variable Cost and Total Cost for Budgeted Output
Speedy Pete’s is a small start-up company that delivers high-end coffee drinks to large metropolitan office buildings via a cutting-edge motorized coffee cart to compete with other premium coffee shops. Data for the past 8 months were collected as follows:
Month, Delivery cost, number of deliverys
May, $63,450, 1,800
June, 67,120, 2,010
July, 66,990, 2,175
August, 68,020, 2,200
September, 73,400, 2,550
October, 72,850, 2,630
November, 75,450, 2,800
December, 73,300, 2,725
Assume that this information was used to construct the following formula for monthly delivery cost.
Total Delivery Cost = $41,850 + ($12.00 × Number of Deliveries)
Assume that 3,000 deliveries are budgeted for the following month of January. Use the total delivery cost formula for the following calculations:
1. Calculate total variable delivery cost for January.
$
2. Calculate total delivery cost for January.
To calculate the total variable delivery cost for January, we need to determine the variable cost per delivery and then multiply it by the number of deliveries.
The total delivery cost for January can be obtained by adding the total variable delivery cost to the fixed delivery cost component.
The formula for monthly delivery cost is given as Total Delivery Cost = $41,850 + ($12.00 × Number of Deliveries).
To calculate the total variable delivery cost for January, we substitute the number of deliveries (3,000) into the formula: Total Variable Delivery Cost = $12.00 × 3,000 = $36,000.
To calculate the total delivery cost for January, we add the total variable delivery cost to the fixed delivery cost: Total Delivery Cost = Total Variable Delivery Cost + Fixed Delivery Cost = $36,000 + $41,850 = $77,850.
Therefore, the total variable delivery cost for January is $36,000, and the total delivery cost for January is $77,850.
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Recall that our real-world money multipler has three variables: rr, k, and er. When k rises, the real-world money multiplier _____ and the economy's velocity ____.
When k rises, the real-world money multiplier decreases, and the economy's velocity decreases.
The real-world money multiplier, represented by the equation 1/rr, is a measure of the potential increase in the money supply through the fractional reserve banking system. It indicates how much additional money can be created in the economy for a given increase in reserves. The multiplier is inversely related to the reserve requirement ratio (rr), which is the proportion of deposits that banks are required to hold as reserves.
When k, which represents the desired reserve ratio (the proportion of deposits that banks choose to hold as reserves), rises, it means that banks increase their desired reserves and hold a larger proportion of deposits rather than lending them out. As a result, the reserve requirement ratio (rr) effectively increases, leading to a decrease in the real-world money multiplier. This is because a higher reserve requirement reduces the amount of money that banks can create through the lending process.
A decrease in the real-world money multiplier implies that the money supply expands less for a given increase in reserves. This decrease in the money supply affects the economy's velocity, which is a measure of how quickly money circulates in the economy. With a lower money supply, individuals and businesses have less money to spend and invest, resulting in a decrease in economic activity and transactions. Consequently, the economy's velocity decreases as a result of the reduced money supply and slower circulation of money.
In summary, when the variable k rises, indicating an increase in the desired reserve ratio, the real-world money multiplier decreases, leading to a contraction in the money supply. This contraction affects the economy's velocity, causing it to decrease as the circulation of money slows down.
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The following are tools/techniques in managing quality except -----------------
Data gathering
Customer needs analysis
Audits
Flow charting
Root Cause Analys
Root Cause Analysis is the process of identifying the underlying causes of a problem or nonconformity. While it is a valuable technique for identifying and resolving issues, it is not specifically categorized as a tool or technique in managing quality.
In quality management, various tools and techniques are employed to ensure that products or services meet or exceed customer expectations. Data gathering involves collecting and analyzing relevant information to make informed decisions and improvements.
Customer needs analysis helps understand customer requirements and preferences to align products or services accordingly. Audits are systematic evaluations conducted to assess compliance with quality standards and identify areas for improvement.
Flow charting is a visual representation of processes, helping to identify bottlenecks and optimize workflow. However, root cause analysis goes a step further by investigating the fundamental reasons behind problems or failures. It aims to determine the underlying factors contributing to an issue to implement effective corrective actions. While root cause analysis is an important aspect of quality management, it is not explicitly mentioned as one of the tools or techniques provided in the given options.
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InstaPlay purchased new equipment which has a CCA of 30% rate and an investment cost of $310,000. Calculate the CCA and UCC for the first 4 years. Use the editor to format your answer
InstaPlay purchased new equipment which has a CCA of 30% rate and an investment cost of $310,000. Calculate the CCA and UCC for the first 4 years. In order to determine the Capital Cost Allowance (CCA) and the Undepreciated Capital Cost (UCC), the following information needs to be known:
Initial Investment Cost for the equipment: $310,000CCA Rate: 30% per annum CCA is the tax deduction that the owner can claim annually, which helps to recover the cost of the asset over its useful life. CCA cannot exceed the initial cost of the asset, therefore, to determine the CCA, calculate 30% of the initial cost of the asset annually for 4 years; Year 1 CCA = 30% * $310,000 = $93,000Year 2 CCA = 30% * $217,000 = $65,100 ($310,000 - $93,000)Year 3 CCA = 30% * $151,900 = $45,570 ($217,000 - $65,100)Year 4 CCA = 30% * $106,330 = $31,899 ($151,900 - $45,570)
To determine the UCC, calculate the difference between the initial cost of the asset and the CCA claimed so far for each year. The UCC will decrease each year as the CCA claimed will increase.Year 1 UCC = $310,000 - $93,000 = $217,000Year 2 UCC = $217,000 - $65,100 = $151,900Year 3 UCC = $151,900 - $45,570 = $106,330Year 4 UCC = $106,330 - $31,899 = $74,431This is the long answer to the given problem.
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In doing research
What is oral tradition
Critically assess historiography and oral traditions
Oral tradition refers to the stories, legends, beliefs, and customs that are passed down from one generation to the next by word of mouth rather than in writing.
Oral tradition is crucial to the preservation and dissemination of history, especially in cultures without a written tradition or where writing was not commonly used. In this way, oral traditions have served as a primary means of communicating knowledge and values from one generation to the next.
On the other hand, historiography refers to the study of historical writing. Historians analyze and evaluate primary and secondary sources, including written records, artifacts, and oral traditions, to construct narratives about the past. Historiography often involves interpreting different accounts of the same event and synthesizing them into a coherent and accurate narrative.
Critically assessing historiography and oral traditions involves evaluating the reliability, validity, and bias of the sources used to construct a historical narrative. For example, oral traditions can be subject to distortion and error over time, and they may reflect the biases of the storytellers or the society in which they originated. Historians must use their critical thinking skills to analyze these sources and construct a narrative that accurately reflects the historical events in question.
In conclusion, oral tradition is an essential component of historical research, particularly in societies without a written tradition. Critically assessing historiography and oral traditions involves evaluating the reliability and validity of sources and using critical thinking skills to construct a coherent and accurate narrative.
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A. What is a "sustainable community"? How are social enterprises and social entrepreneurs involved with enhancing the sustainability of communities? B. How do social enterprises in the fashion industry achieve financial stability and economic sustainability? Which strategy do you believe is the most effective? Why?
C. What are two examples of a social enterprise in the fashion industry in which the social objectives and business objectives of the company are directly aligned? How do they achieve this alignment? D. What are two examples of a social enterprise in the fashion industry in which the social objectives and business objectives overlap? E. What is a corporate foundation? What are two examples of corporate foundations in the fashion industry?
A. Sustainable community A sustainable community is a group of individuals that collaboratively work to create a shared, sustainable future. They aim to enhance the well-being and quality of life of their members while also sustaining the planet.
Social entrepreneurs and social enterprises play a crucial role in improving the sustainability of communities. These entrepreneurs work on solving social issues using innovative business strategies.
By integrating their business and social goals, they promote a more sustainable future for their communities. They utilize their resources and business to address social and environmental concerns.
B. Social enterprises in the fashion industry
The fashion industry can become sustainable by promoting social entrepreneurship. Sustainable enterprises can boost the economic sustainability of the fashion industry by creating products that are environmentally friendly, ethical, and recyclable. Social enterprises can create opportunities for employment for vulnerable communities. The most effective strategy for achieving this financial stability is to use recycled materials.
One example of this strategy is the use of recycled plastics to make garments. This process allows for low-cost production and has a minimal carbon footprint. C. Two examples of social enterprises with direct alignment
There are two examples of social enterprises in the fashion industry that have direct alignment between social objectives and business objectives. One of the examples is Warby Parker, which provides eyewear to individuals in need. For every pair of eyeglasses sold, Warby Parker provides a pair of eyeglasses to someone in need. Another example is TOMS Shoes, which donates one pair of shoes to someone in need for every pair sold. D. Two examples of social enterprises with overlapping objectives
There are two examples of social enterprises in the fashion industry in which social objectives and business objectives overlap.
One example is Eileen Fisher, a sustainable clothing company that uses environmentally friendly materials in its production process. They also provide employment opportunities for women in need. Another example is Patagonia, which promotes environmental sustainability by using recycled materials in their production process. E. Corporate foundation
A corporate foundation is an organization that is set up by a company as a means of supporting social or charitable causes. The foundation provides a way for the company to give back to the community. Two examples of corporate foundations in the fashion industry are the H&M Foundation and the Levi Strauss Foundation.
The H&M Foundation aims to provide employment opportunities and improve the quality of life of individuals in vulnerable communities. The Levi Strauss Foundation focuses on promoting equality, environmental sustainability, and social justice.
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A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that total factory overhead costs would be $247,010 and direct labor hours would be 49,402. Actual factory overhead costs incurred were $256,954, and actual direct labor hours were 53,532. What is the amount of overapplied or underapplied manufacturing overhead at the end of the year? Oa. $20,650 underapplied Ob. $10,706 overapplied Oc. $10,706 underapplied Od. $267,660 overapplied
Based on the given information, the manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that total factory overhead costs would be $247,010 and direct labor hours would be 49,402.
The actual factory overhead costs incurred were $256,954, and actual direct labor hours were 53,532. We need to determine the amount of overapplied or underapplied manufacturing overhead at the end of the year. Calculation of Factory Overhead Rate: Factory Overhead Rate = Estimated Total Factory Overhead Costs / Estimated Direct Labor Hours Factory Overhead Rate = $247,010 / 49,402 = $5.00 per direct labor hour Calculation of Applied Factory Overhead: Applied Factory Overhead = Factory Overhead Rate × Actual Direct Labor Hours Applied Factory Overhead = $5.00 per direct labor hour × 53,532 actual direct labor hours = $267,660.
Calculation of Overapplied or Underapplied Manufacturing Overhead: Overapplied or Underapplied Manufacturing Overhead = Actual Factory Overhead Costs Incurred − Applied Factory Overhead Overapplied or Underapplied Manufacturing Overhead = $256,954 − $267,660 = − $10,706 Underapplied manufacturing overhead is when the actual factory overhead incurred is greater than the applied factory overhead. On the other hand, overapplied manufacturing overhead is when the applied factory overhead is greater than the actual factory overhead incurred. In the given case, the amount of underapplied manufacturing overhead is $10,706. Therefore, the correct option is (C) $10,706 underapplied.
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The following diagram shows supply and demand in the market for smartphones.
Use the black point (plus symbol) to indicate the equilibrium price and quantity of smartphones. Then use the green point (triangle symbol) to fill the area representing consumer surplus, and use the purple point (diamond symbol) to fill the area representing producer surplus.
EquilibriumConsumer SurplusProducer Surplus0306090120150180210240270300200180160140120100806040200PRICE (Dollars per phone)QUANTITY (Millions of phones)DemandSupply
Total surplus in this market ismillion.
The total surplus in the market for smartphones is [missing value] million.
To determine the total surplus in the market for smartphones, we need the specific value mentioned in the question, which is missing. The total surplus is typically calculated as the sum of consumer surplus and producer surplus. Consumer surplus represents the difference between the maximum price consumers are willing to pay and the actual market price, while producer surplus represents the difference between the minimum price producers are willing to accept and the market price.
In the given description, the equilibrium price and quantity of smartphones are not provided, and the areas representing consumer surplus and producer surplus are not labeled or quantified. Without specific values or data, we cannot accurately determine the total surplus in the market for smartphones. To complete the answer, we would need the precise numerical values for equilibrium price, equilibrium quantity, consumer surplus, and producer surplus, as well as the corresponding areas on the diagram.
The total surplus in a market is an important concept in economics as it reflects the overall welfare gained by both consumers and producers. It represents the net benefit derived from participating in the market exchange. When the market reaches equilibrium, where the quantity demanded equals the quantity supplied, it maximizes the total surplus. Consumer surplus and producer surplus contribute to the overall efficiency and satisfaction in the market, with consumer surplus capturing the additional benefit enjoyed by consumers from paying less than their maximum willingness to pay and producer surplus representing the additional profit gained by producers for selling above their minimum acceptable price.
In summary, the missing values prevent us from determining the total surplus in the market for smartphones accurately. The total surplus is an essential measure of welfare and efficiency in a market, but without the specific data or values provided in the question, we cannot complete the calculation or fill in the points representing consumer surplus and producer surplus on the diagram.
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Since earnings per share increases with debt financing, why don't companies rely exclusively on debt financing? O debt financing is riskier O equity financing requires dividend payouts dividends are tax deductible O equity financing is riskier
Companies don't rely exclusively on debt financing due to risks, dividend obligations, non-deductible dividends, and the potential risks of equity financing.
Companies do not rely exclusively on debt financing for several reasons:
1. Debt financing is riskier: While debt financing can increase earnings per share, it also increases the financial risk for a company. Taking on too much debt can lead to financial instability, especially if the company faces economic downturns or challenges in generating sufficient cash flows to service the debt. Excessive debt can result in higher interest expenses and potential default risks, negatively impacting the company's financial health.
2. Equity financing requires dividend payouts: When a company raises funds through equity financing, it typically involves issuing shares of ownership to investors. As a result, the company may have to distribute dividends to shareholders, which reduces the retained earnings available for reinvestment in the business. This obligation to pay dividends can limit the company's ability to retain and reinvest profits, potentially affecting future growth and expansion.
3. Dividends are not tax-deductible: Unlike interest payments on debt, dividends paid to shareholders are not tax-deductible for the company. This means that equity financing can result in a higher tax burden for the company compared to debt financing. Companies often consider the tax implications of different financing options when making decisions about capital structure.
4. Equity financing is riskier: While debt financing carries financial risk, equity financing introduces other risks. By issuing equity, companies dilute ownership and control, potentially giving shareholders more influence over decision-making. Additionally, equity investors may have certain expectations for returns on their investment, putting pressure on the company to perform well and meet shareholder expectations.
In practice, companies aim to strike a balance between debt and equity financing based on their financial objectives, risk tolerance, and market conditions. By diversifying their financing sources, companies can mitigate risks, optimize capital structure, and maintain financial stability while pursuing growth opportunities.
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