Answer:
The answer is False
Explanation:
Democracy identifies that people have the power to decide for themselves. However, since the populations are vast, the representative democracy allows citizens to elect officials to represent themselves and their needs and interests.
If elected officials are banned, then the Citizen's ability to govern themselves and participate in the planning process is prevented.
Final answer:
The claim that elected officials should be excluded from the planning process due to potential political influence is false; their role is vital in representing constituents. Dillon's Rule restricts, not expands, local government powers, and direct democracy involves citizens voting directly rather than daily politician interactions. Machine politics often led to higher taxes due to corruption.
Explanation:
The statement that 'elected officials should be excluded from the planning process because of the potential for political influence' is FALSE. While it's a valid concern that elected officials might be influenced by politics, it's also part of their role to represent the interests of their constituents within the planning process. They are elected to serve the public interest, and excluding them could undermine the democratic process. Moreover, officials can bring valuable knowledge and oversight to policy discussions. On the other hand, Dillon's Rule does not give local governments freedom and flexibility; rather, it is a principle stating that local governments have only those powers granted by the state and no more. Direct democracy is not about daily interactions with politicians, but rather it implies citizens making decisions through referendums or other forms of vote without intermediary representatives.
Government planners rely on experts such as scientists to provide objective advice in policy-making; however, creating a policy where any failing prediction results in permanent exclusion could lead to overly conservative recommendations and stifle innovation. Thus, incorporating a mixture of elected officials, experts, and public opinion is typically considered a balanced approach in policy-making. In the U.S., the system is not a true democracy as it operates as a republic, where citizens elect representatives to make policy decisions on their behalf.
Concerning colonial governors, they did have the power to veto legislation from colonial assemblies, reflecting the centralized authority of the governing structures of the time. The definition of executive authority is unrelated to the idea of the prime minister or president being 'the leader of the free world'; this is a colloquialism that does not accurately describe executive powers.
Regarding term limits, whether they've led to a significant increase in the number of women in state legislatures is a matter that requires statistical evidence to support. Lastly, a disadvantage of machine politics included the fact that taxpayers often faced higher city taxes due to corrupt practices.
Excerpts from Dowling Company's December 31, 2018 and 2017, financial statements and key ratios are presented below (all numbers are in millions):2018 2017Accounts receivable (net) $ 20 $ 16Net sales $ 115 100Cost of goods sold $ 60 55Net income $ 20 17Inventory turnover 5.22Return on assets 10.3 %Equity Multiple 2.36Dowling's average total assets for 2018 is (rounded):
(A) 115.(B) 32.(C) 210.(D) 194.
Answer:
Option (D) is correct.
Explanation:
Return on equity:
= Return on assets × Equity multiple
= 10.3% × 2.36
= 24.308%
Profit margin:
= Net income ÷ Sales
= $20 ÷ $115
= 17.39%
Average total assets is calculated as follows:
Return on assets = Net income ÷ Average total assets
10.3% = $20 ÷ Average total assets
Average total assets = $194.17
An increase in the costs of resources or inputs of production would shift the ________.
A. short-run aggregate supply curve rightward
B. long-run aggregate supply curve rightward
C. short-run aggregate supply curve leftward
D. long-run aggregate supply curve leftward
Answer:
C. short-run aggregate supply curve leftward
Explanation:
When the cost of production or inputs of production increase the short run supply curve shifts left because the producers are now willing to sell less at the same price because it is more expensive for them to produce, so at every price the production decreases because of which the supply curve shifts left. The long run supply curve isn't affected by an increase in costs of resources because it is the potential of the economy and an increase in costs of does not change the potential of the economy.
Listmann Corp. processes four different products that can either be sold as is or processed further. Listed below are sales and additional cost data: Product Sales Value with no further Processing Additional Processing Costs Sales Value after further processing Premier $1,350 $900 $2,700 Deluxe 450 225 630 Super 900 450 1,800 Basic 90 45 180
2. Which product(s) should not be processed further? Premier. Deluxe. Super. Basic. Premier and Basic.
Answer:
Deluxe
Explanation:
The computation is shown below:
= Sales Value after further processing - further processing cost - sales value
For Premier
= $2,700 - $900 -$1,350
= $450
For Deluxe
= $630 - $225 - $430
= -$25
For Super
= $1,800 - $450 - $900
= $450
For Basic
= $180 - $45 - $90
= $45
As we see that out of four different products, the deluxe contains negative value which reflect that this product should not processed further that means other three products should processed further
People end up tossing 12% of what they buy at the grocery store (Reader's Digest, March, 2009). Assume this is the true population proportion and that you plan to take a sample survey of 540 grocery shoppers to further investigate their behavior.a- Show the sampling distribution of ( p¯ ), the proportion of groceries thrown out by your sample respondentsb- what is the probability that the sample proportion will be within ±.02 of the population proportion?c- what is the probability that your survey will provide a sample proportion within ±.015 of the population proportion?
Answer:
Consider the following calculations
Explanation:
People end up tossing 12% of what they buy at the grocery store (Reader's Digest, March, 2009). Assume this is the true population proportion and that you plan to take a sample survey of 540 grocery shoppers to further investigate their behavior.
a- Show the sampling distribution of ( p¯ ), the proportion of groceries thrown out by your sample respondents
sampling distribution of ( p¯ ) is normal with
mean = 0.12 and
standard error = sqrt(p(1-p)/n) = sqrt(0.12*0.88/540) =0.0140
b- what is the probability that the sample proportion will be within ±.03 of the population proportion?
z value for 0.03 difference, z=0.03/0.014 =2.14
The required P= P( -2.14<z<2.14) = P( z <2.14) – P( z <-2.14)
=0.9838 - 0.0162
=0.9676
c- what is the probability that your survey will provide a sample proportion within ±.015 of the population proportion?
z value for 0.015 difference, z=0.015/0.014 =1.07
The required P= P( -1.07<z<1.07) = P( z <1.07) – P( z <-1.07)
=0.8577 - 0.1423
=0.7154
d- What would be the effect of taking a larger sample on the probabilities in parts (b) and (c)? Why?
Taking a larger sample will decrease the standard error. The probabilities in parts (b) and (c) will increase.
The problem describes the usage of properties of the sampling distribution to solve calculation of proportions. It involves understanding of concepts such as population proportion, sample proportion, standard deviation and usage of z-values to find probabilities.
To solve this problem, we will be using properties of the sampling distribution. We will base our calculations according to formula p' = x/n, where x represents the 'successes' (in this case groceries thrown out), n represents the sample size, and p' is the sample proportion, serving as the point estimate for the population proportion.
a- In sampling distribution of sample proportion (p¯), p equals the population proportion (0.12), and q equals 1 - p (1 - 0.12 = 0.88). The sample size (n) is 540. Here, the mean (µ) of the sampling distribution is equal to p and the standard deviation is √pq/n, with both np and nq should be more than 5, which they are.
b- To calculate the probability that the sample proportion will be within ±.02 of the population proportion, we find z-values by subtracting the population proportion from the sample proportions and dividing it by the standard deviation. We then use these z values with a z-table or software to find the respective probabilities.
c- The same steps apply for determining the probability that the sample proportion is within ±.015 of the population proportion. Difference lies in the calculation of the z-values.
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Bentels Co. desires a December 31 ending inventory of 2,840 units. Budgeted sales for December are 4,000 units. The November 30 inventory was 1,800 units. Budgeted purchases are:
A.5,040 units.
B. 1,240 units.
C. 6,840 units.
D. 4,000 units.
E. 5,800 units.
Answer:
Budgeted purchases Units
Budgeted sales 4,000
Ending inventory 2,840
Beginning inventory (1,800)
Budgeted purchases 5,040
The correct answer is A
Explanation:
Budgeted purchases equal budgeted sales plus ending inventory minus beginning inventory.
To determine the budgeted purchases, calculate the desired increase in inventory from November 30 to December 31 and add it to the budgeted sales for December.
Explanation:To determine the budgeted purchases, we need to calculate the desired increase in inventory from November 30 to December 31 and add it to the budgeted sales for December. The desired increase in inventory is 2,840 units - 1,800 units = 1,040 units. Therefore, the budgeted purchases are 4,000 units + 1,040 units = 5,040 units. Option A is the correct answer.
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A firm is evaluating two independent projects utilizing the internal rate of return technique. Project X has an initial investment of $80,000 and cash inflows at the end of each of the next five years of $25,000. Project Z has a initial investment of $120,000 and cash inflows at the end of each of the next four years of $40,000.
The firm should
A) accept both if the cost of capital is at most 15 percent.
B) accept only Z if the cost of capital is at most 15 percent.
C) accept only X if the cost of capital is at most 15 percent.
D) none of the above
Answer:
If cost of capital is 15%
PROJECT X
Year Cashflow DF@15% PV
0 (80,000) 1 (80,000)
1-5 25,000 3.3522 83,805
NPV 3,805
PROJECT Z
Year Cashflow DF@15% PV
0 (120,000) 1 (120,000)
1-4 40,000 2.8550 114,200
NPV (5,800)
Accept project X if the cost of capital is at most 15%
The correct answer is C
Explanation:
In this case, the net present value of each project will be computed at 15% cost of capital and the project with positive net present value will be accepted.
The following is the selected information about the Little Dipper Company for the current year and prior year.
Account
Current Prior Net sales revenue $651,000 $595,000
Cost of goods sold $417,720 $425,000
Gross profit $233,280 $170,000
Selling/general expenses $149,040 $93,500
Net income before tax $84,240 $76,500
Income tax $25,920 $22,800
Net income $58,320 $53,700
What is the current year's cost of goods sold percentage (as would be found on a vertical analysis of the income statement for the current year)?
Answer:
Consider the following calculation
Explanation:
Under Veritical analysis of Income statement every line item is compared as a percentage of gross sales.
So, the cost of goods sold of the current year will be compared as a percentage of gross sales made.
Cost of goods sold in the current year = $ 417,720
Gross sales = $ 6,51,000
Cost of goods sold as a percentage = Cost of goods sold/ sales * 100
= 4,17,720 / 6,51,000 * 100
= 64%
Bortello Corporation produces high-quality leather boots. The company has a standard cost system and has set the following standards for materials and labor: Leather (12 strips @ $20) $240 Direct labor (10 hours @ $12) $120 Total prime cost $360 During the year Bortello produced 125 boots. Actual leather purchased was 1,700 strips, at $16 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 1,500 hours at $15 per hour. Compute the costs of leather and direct labor that should have been incurred for the production of 125 boots.
A. $46,500 and $37,500
B. $30,000 and $15,000
C. $36,000 and $36,000
D. $37,200 and $20,000
Answer:
B. $30,000 and $15,000
Explanation:
We can compute this as follows,
We need to calculate flexed budget costs for the production of 125 boots.
Budgeted / boots are as follows,
Leather cost / boot = $240
Direct Labor / boot = $120
The costs that should have been for 125 boots are then,
Leather = 125 * 240 = $30,000
Direct Labor = 125 * 120 = $15,000
Hope that helps.
When designing an Amazon SQS message-processing solution, messages in the queue must be processed before the maximum retention time has elapsed. Which actions will meet this requirement?
Explanation:
The Amazon Easy Queue Service was launched by Amazon.com in late 2004 and is a centralized message queueing up service. It supports programmatic message transmission through web services as a means of communication via the Internet.
Instantly, Amazon SQS removes messages in line for a longer period of retention of messages.
The automatic processing period for the response is 4 days. Furthermore, the maintenance period of the message can be determined by the Set Queue Attributes actions to reach between 60 and 1.209.600 seconds (14 days).
CU, Incorporated (CUI) produces copper contacts that it uses in switches and relays. CUI needs to determine the order quantity, Q, to meet the annual demand at the lowest cost. The price of copper depends on the quantity ordered. Here are price-break and other data for the problem:
Price of copper $ 0.82 per pound up to 2,499 pounds
$ 0.81 per pound for orders between 2,500 and 5,000 pounds
$ 0.80 per pound for orders greater than 5,000 pounds
Annual demand 50,000 pounds per year
Holding cost 20 percent per unit per year of the price of the copper
Ordering cost $ 30
Which quantity should be ordered?
Answer:
If CUI buys at $0.82 per pound
Annual demand (Co) = 50,000 pounds
Ordering cost per order (Co) = $30
Holding cost per item per annum (H) = 20% x $0.82 = $0.164
EOQ = √2DCo
H
EOQ = √2 x 50,000 x $30
$0.164
EOQ = 4,277 units
The solution is not feasible since 4,277 units could not be bought at $0.82 per pound.
If CUI buys at $0.81 per pound
Annual demand (Co) = 50,000 pounds
Ordering cost per order (Co) = $30
Holding cost per item per annum (H) = 20% x $0.81 = $0.162
EOQ = √2DCo
H
EOQ = √2 x 50,000 x $30
$0.162
EOQ = 4,303 units
Total cost for 4,303 units
= DCo + QH + P x D
Q 2
= 50,000 x $30 + 4,303 x $0.162 + $0.81 x 50,000
4,303 2
= $348.59 + $348.54 + $40,500
= $41,197.13
If CUI buys at $0.80 per pound
Annual demand (Co) = 50,000 pounds
Ordering cost per order (Co) = $30
Holding cost per item per annum (H) = 20% x $0.80 = $0.16
EOQ = √2DCo
H
EOQ = √2 x 50,000 x $30
$0.16
EOQ = 4,330 units
The solution is not feasible since 4,330 units could not be bought at $0.80 per pound. Thus, EOQ is 5,001 units.
Total cost for 5,001 units
= DCo + QH + P x D
Q 2
= 50,000 x $30 + 5,001 x $0.16 + $0.80 x 50,000
5,001 2
= $299.94 + $400.08 + $40,000
= $40,700.02
Thus, EOQ equals 5,001 units because the quantity minimises the total cost.
Explanation:
EOQ is a function of square root of 2 multiplied by annual demand and ordering cost per order divided by holding cost per item per annum.
Since this question involves discounts, there is need to calculate EOQ at various discount levels. Holding cost is a function of price. For instance, when price is $0.82, holding cost is 20% of $0.82.
We will calculate the EOQ at various prices and corresponding total cost. Finally, we will consider the quantity that minimizes the total cost. Thus, EOQ equals 5,001 units.
Given the price breaks and costs, it is most cost-effective for CU, Incorporated to order more than 5,000 pounds of copper in order to get the price of $0.80 per pound, according to the Economic Order Quantity (EOQ) model.
Explanation:To answer the question, we first need to understand the concept of Economic Order Quantity (EOQ). EOQ is a model that identifies the optimal order quantity a company can purchase to minimize its inventory costs by calculating the total minimum cost. These costs include ordering costs, holding cost, and the cost of not having inventory when needed.
Given the price breaks in the question, we need to understand that EOQ calculation will give us the starting point to determine which price tier to use. Assuming that the cost of the ordering and the holding costs is the same across all price breaks, it would be more cost-effective to purchase at the lower cost per unit. Therefore, to meet the annual demand at the lowest cost, CUI should order more than 5,000 pounds to get the best price of $0.80 per pound.
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Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2019. Demers reported common stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review, goodwill has not been impaired.
Demers earns income and pays dividends as follows:
2019 2020 2021
Net income $ 100,000 $ 120,000 $ 130,000
Dividends 40,000 50,000 60,000
Assume the partial equity method is applied.
1. How much does Pell record as Income from Demers for the year ended December 31, 2019?
Multiple Choice
a. $80,000.
b. $74,400.
c. $73,000.
d. $42,400.
e. $41,000.
2. How much does Pell record as income from Demers for the year ended December 31, 2020?
Multiple Choice
a. $90,400.
b. $89,000.
c. $50,400.
d. $96,000.
e. $56,000.
3. How much does Pell record as income from Demers for the year ended December 31, 2021?
Multiple Choice
a. $98,400.
b. $56,000.
c. $104,000.
d. $97,000.
e. $50,400.
4. Compute the noncontrolling interest in the net income of Demers at December 31, 2019.
Multiple Choice
a. $20,000.
b. $12,000.
c. $18,600.
d. $10,600.
e. $14,400.
Answer:
The correct answer is
B ,A , A ,C
Explanation:
1_ 100,000×80%=80,000
Excess FV Annual Amortization 7,000×80%=5,600
80,000_5,600=74,400
_________________________________
2_120,000×80%=96,000
Excess FV Annual Amortization 7,000×80%=5,600
96,000_5,600 =90,400
________________________________
3_130,000×80%=104,000
Excess FV Annual Amortization 7,000×80= 5,600
104,000_5,600=98,400
______________________________
4_100,000×20%=20,000
Excess FV Annual Amortization 7,000×20%=1,400
20,000_1,400=18,600
GOOD LUCK ❤
Assume the partial equity method is applied.
The amount of income that Pell should record as income from Demers for the year ended December 31, 2019 is: b. $74,400.The amount of income that Pell should record as income from Demers for the year ended December 31, 2020 is: a. $90,400.The amount of income that Pell should record as income from Demers for the year ended December 31, 2021 is: a. $98,400.The noncontrolling interest in the net income of Demers at December 31, 2019 is: c. $18,600.1. Income for 2019:
2019 Income= Net income for 2019 -Excess FV Annual Amortization
2019 Income=($100,000 × .80) - [($30,000+$40,000÷10)× .80]
2019 Income=($100,000 × .80) - [($70,000÷10)× .80]
2019 Income=($100,000 × .80) - ($7,000 × .80)]
2019 Income= $74,400
2. Income for 2020:
2020 Income= Net income for 2020 -Excess FV Annual Amortization
2020 Income=($120,000 × .80) - [($30,000+$40,000÷10)× .80]
2020 Income=($120,000 × .80) - [($70,000÷10)× .80]
2020 Income=($120,000 × .80) - ($7,000 × .80)]
2020 Income= $90,400
3. Income for 2021:
2021 Income=Net income for 2020 -Excess FV Annual Amortization
2021 Income=($130,000 × .80) - [($30,000+$40,000÷10)× .80]
2021 Income=($130,000 × .80) - [($70,000÷10)× .80]
2021 Income=($130,000 × .80) - ($7,000 × .80)]
2021 Income= $98,400
4. 2019 noncontrolling interest in the net income
2019 Noncontrolling Interest in Net income=Net income for 2019-Excess FV Annual Amortization
2019 Noncontrolling Interest in Net income=[$100,000×(100%-80%]- [($30,000+$40,000÷10)×(100%-80%]
2019 Noncontrolling Interest in Net income=($100,000 × .20) - [($70,000÷10)× .20]
2019 Noncontrolling Interest in Net income= ($100,000 × .20) - ($7,000 × .20)]
2019 Noncontrolling Interest in Net income = $18,600
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The base year is 2012. Real GDP in 2012 was? $15 trillion. The GDP price index in 2015 was? 105, and real GDP in 2015 was? $16 trillion. ?? ?? Calculate nominal GDP in 2012 and in 2015 and the percentage increase in nominal GDP from 2012 to 2015.
Nominal GDP in 2012 is ?$ _ trillion. And percentage increase in production 2012-2015 is _.
Answer:
nominal GDP = 15 trillion
nominal GDP = 16.8 trillion
percentage change in nominal GDP = 12%
percentage change in real GDP = 6.67 %
Explanation:
given data
Real GDP in 2012 = $15 trillion
GDP price index 2015 = 105
real GDP in 2015 = $16 trillion
solution
we get here GDP in 2012 that is express as
GDP deflator = [tex]\frac{nominal\ GDP}{real\ GDP}[/tex] × 100 ................1
100 = [tex]\frac{nominal\ GDP}{15}[/tex] × 100
nominal GDP = 15 trillion
and
nominal GDP in 2015 that is
105 = [tex]\frac{nominal\ GDP}{16}[/tex] × 100
nominal GDP = 16.8 trillion
and
now we get percentage increase in nominal GDP is
nominal GDP = [tex]\frac{nominal\ GDP(current) -Nominal\ GDP(initial)}{Nominal\ GDp(initial)}[/tex] × 100 .....................2
nominal GDP = [tex]\frac{16.8-15}{15}[/tex] × 100
percentage change in nominal GDP = 12%
and
percentage change in real GDP is
percentage change in real GDP = [tex]\frac{real\ GDP(current) -real\ GDP(initial)}{real\ GDp(initial)}[/tex] × 100 .....................3
percentage change in real GDP = [tex]\frac{16-15}{15}[/tex] × 100
percentage change in real GDP = 6.67 %
The nominal GDP in 2012 is $15 trillion, the nominal GDP in 2015 is $16.8 trillion, and the percentage change in nominal GDP in 2012 is 12%, and the percentage change in real GDP in 2015 is 6.67 %.
What is the real GDP?GDP means the Gross Domestic Product, It is a monetary measurement of the market value of every final goods and service created in a limited time period by countries.
According to the above situation,
Real GDP in 2012 = $15 trillion
GDP price index 2015 = 105
Real GDP in 2015 = $16 trillion
Computation of the GDP and the rate of percentage:
The GDP in the year 2012 are:
GDP Deflatlator:
[tex]=\frac{\text{Nominal GDP}}{\text{Real GDP}} \times 100\\\\100=\frac{\text{Nominal GDP}}{15}\times 100\\\\{\text{Nominal GDP}} = 15 \text{trillion}[/tex]
and,
The GDP in the year 2015 are:
[tex]=\frac{\text{Nominal GDP}}{\text{Real GDP}} \times 100\\\\105=\frac{\text{Nominal GDP}}{16}\times 100\\\\{\text{Nominal GDP}} = 16.8 \text{trillion}[/tex]
Then,
Now, the percentage increase in nominal GDP in 2012 is:
[tex]\text{Nominal GDP} =\dfrac{\text{Current Nominal GDP- Initial Nominal GDP}}{\text{Initial Nominal GDP}}\times100\\\\\\\text{Nominal GDP}= \dfrac{16.8-15}{15}\times100\\\\[/tex]
The percentage change in nominal GDP in 2012 is 12%.
The percentage increase in nominal GDP in 2015 is:
[tex]\text{Nominal GDP} =\dfrac{\text{Current Nominal GDP- Initial Nominal GDP}}{\text{Initial Nominal GDP}}\times100\\\\\\\text{Nominal GDP}= \dfrac{16-15}{15}\times100\\\\[/tex]
Percentage change in nominal GDP in 2015 is 6.67%
Therefore, the percentage change in nominal GDP in 2015 is 6.67%.
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At each value of the domestic interest rate, decreases in the riskiness of domestic assets ______ capital inflows, ______ capital outflows, and ______ net capital inflows.A. increase; increase; increase B. increase; increase; decrease C. increase; decrease; increase D. decrease; increase; decrease
Answer:
The answer is C. increase; decrease; increase
Explanation:
As the domestic interest rate remains unchanged, decreases in the riskiness of the domestic assets will help to increase the risk-adjusted return on domestic assets and as a result:
+ Stimulate foreign investors to start holding/ holding more domestic asset which means they will inject more capital into the country => Capital inflows increase
+ Discourage foreign investors from decreasing holding on domestic asset because they enjoy higher risk-adjusted return which means there will be less sales of domestic assets subsequently less capital outflows => Capital outflows decrease.
As net capital inflows = Capital inflows - Capital outflows, increase in capital inflows and decrease in capital outflows will Increase net Capital inflows
Thus, C is the correct choice.
CompuTronics, a manufacturer of computer peripherals, has excess capacity. The company's Utah plant has the following per-unit cost structure for item no. 89:
Variable manufacturing $ 60
Fixed manufacturing 25
Variable selling 8
Fixed selling 11
Traceable fixed administrative 4
Allocated administrative 2
The traceable fixed administrative cost was incurred at the Utah plant; in contrast, the allocated administrative cost represents a "fair share" of CompuTronics' corporate overhead. Utah has been presented with a special order of 5,600 units of item no. 89 on which no selling cost will be incurred. The proper relevant cost in deciding whether to accept this special order would be:
a. $60.
b. $89.
c. $91.
d. $110.
e. None of these.
Answer:
a. $60.
Explanation:
While computing the relevant cost in case of special order only the variable manufacturing cost is to be considered as it will be changed in special order case.
And the other cot like - fixed manufacturing, variable & fixed selling, traceable fixed administrative cost, etc are not relevant as it remains constant
These costs are not useful for decision making. Hence, it is to be ignored
Variable manufacturing costs of $60 should be considered for deciding on whether to accept this special order as the relevant costs are always affected by the management decision.
What are Relevant Costs?
Relevant cost is a management accounting term that describes the avoidable costs incurred only when making certain business decisions. The concept of relevant costs is used to eliminate unnecessary data that can make the decision-making process difficult.
While calculating relevant costs in the event of a special order only variable production costs should be considered as they will be changed in the case of a special order.
And other costs like - consistent production, flexible & consistent sales, consistent management costs, etc. are not as important as they remain constant.
These costs are not helpful in making decisions. Therefore, it should be ignored.
Thus, Option A. is the correct choice.
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Use the data provided on Cadbury to answer the question below. The risk free rate is 4.25%. The expected return on the market portfolio is 9.75%. The corporate tax rate is 40%. The face value of Cadbury's outstanding bonds is 2.450 billion pounds sterling. The coupon rate on Cadbury's bonds is 4.5%. Assume that the bonds pay annual coupons. The yield to maturity on Cadbury's bonds is 4.5%. Cadbury's bonds mature in 7 years. Cadbury has 1.650 billion common shares outstanding. The market price of Cadbury's common shares as of Dec 31, 2008 is 6.25 pounds sterling. Cadbury's Beta is 0.8. Cadbury's cost of debt (afterminus tax) is 2.7%. Cadbury's cost of equity is 8.65%. What is Cadbury's WACC?
Answer:
7.51%
Explanation:
The formula to compute WACC is shown below:
= (Weightage of debt) × (after cost of debt) + (Weightage of common stock) × (cost of common stock)
where,
Weighted of debt = Debt ÷ total firm
The total firm includes debt, and the equity which equals to
= 2.450 billion × $ 1 + 1.650 billion × $6.25
= 2.450 billion + 10.3125 billion
= 12.7625 billion
So, Weighted of debt = ($2.450 billion ÷ $12.7625 billion) = 0.192
And, the weighted of common stock = (Common stock ÷ total firm)
= $10.3125 billion ÷ $12.7625 billion
= 0.808
Now put these values to the above formula
So, the value would equal to
= (0.192 × 2.7%) + (0.808 × 8.65%)
= 0.5184% + 6.9892%
= 7.51%
Final answer:
The Weighted Average Cost of Capital (WACC) measures the average cost of capital for a company, taking into account the proportion of debt and equity financing. To calculate Cadbury's WACC, we need to find the weighted average cost of debt and the weighted average cost of equity. Assuming Cadbury has a 100% debt-to-equity ratio, the WACC can be calculated as follows: WACC = (Weight of Debt * Cost of Debt) + (Weight of Equity * Cost of Equity) = (0.5 * 2.7%) + (0.5 * 8.65%).
Explanation:
The Weighted Average Cost of Capital (WACC) measures the average cost of capital for a company, taking into account the proportion of debt and equity financing. To calculate Cadbury's WACC, we need to find the weighted average cost of debt and the weighted average cost of equity.
For Cadbury, the cost of debt (after tax) is given as 2.7% and the cost of equity is 8.65%. The weights for debt and equity can be calculated by dividing the respective values by the total capital structure.
Assuming Cadbury has a 100% debt-to-equity ratio, the WACC can be calculated as follows:
WACC = (Weight of Debt * Cost of Debt) + (Weight of Equity * Cost of Equity) = (0.5 * 2.7%) + (0.5 * 8.65%).
Aptitude tests measure: a. The cognitive abilities that intelligence tests measure. b. Learning that has occurred as a result of exposure to a relatively defined learning experience. c. Learning that has occurred informally through life experiences. d. Learning that has occurred through formal structured input.
Answer: c. Learning that has occurred informally through life experiences
Explanation: Aptitude test is used to determine a candidates level of intelligence, abilities, and skills in different areas, this test helps to discover inherent abilities of a person to perform in certain areas of task. It is widely used by top organizations during their recruitment exercise to get the best candidate for a particular position.
•Note: In undergoing an aptitude test, no previous knowledge is put into consideration.
There are various types of aptitude tests and they are adopted based on the area of skills to be discovered, a few of them includes
• Numerical test: It is used to test ones ability in calculations, figures or numbers, charts, graphs, etc.
•Verbal test: It is used to test verbal skills, ability to interpret information and get the best out of it.
•Cognitive ability test: used to determine a candidate's level of intelligence, therefore it covers so many areas.
•In-tray test is used to determine time and resource management skills
Others includes; diagrammatic test, abstract reasoning, mechanical reasoning test etc.
Aptitude tests primarily measure the cognitive abilities that intelligence tests measure. They are designed to evaluate an individual's potential to learn new skills, adapt to new situations, and solve problems, which are all aspects of cognitive abilities. The other options provided may be aspects of what aptitude tests measure, depending on the specific aptitude test.
Explanation:Aptitude tests are utilized to gauge various aspects of our cognitive capabilities. Broadly speaking, these tests are structured to measure the ability to learn or acquire a particular skill or set of skills. They provide information on an individual's potential to use the mind to solve new problems, learn from experience, and adapt to new situations.
With reference to the options provided, the most accurate choice would be (a) The cognitive abilities that intelligence tests measure. Intelligence tests and aptitude tests share a common objective, which is to measure cognitive abilities, nevertheless, they are not exactly the same. Intelligence tests, such as the WAIS-IV and WISC-V, typically measure a wider range of cognitive abilities, whereas aptitude tests are used to measure specific skills or areas of knowledge.
The other options could be aspects of what aptitude tests measure contingent on the precise aptitude test and what it was designed to evaluate. For instance, an aptitude test might evaluate learning that has occurred formally through defined learning experiences (option b), informally through life experiences (option c), or through formal structured input (option d). However, it's the cognitive abilities that are the foundational components of these learning experiences.
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Goods a company acquires to use in making products are called:
Select one:
a. Cost of goods sold.
b. Raw materials inventory.
c. Finished goods inventory.
d. Work in Process inventory.
e. Conversion costs.
Answer:
b. Raw materials inventory.
Explanation:
There are basically three cycles to make a product ready to sale
1. Raw material
2. Work in process
3. Finished goods
The raw material is the part of the product. In the work in process, the products parts are in process to combine all the parts of the products. And, in the finished goods cycle, after processing the product, the product is finished and then the product is ready to sale.
The costs of goods sold and the conversion cost are the cost which are related to the product
The following costs result from the production and sale of 4,550 drum sets manufactured by Tom Thompson Company for the year ended December 31, 2013. The drum sets sell for $305 each.
The company has a 40% income tax rate. Variable production costs Plastic for casing $ 127,400 Wages of assembly workers 423,150 Drum stands 168,350 Variable selling costs Sales commissions 118,300 Fixed manufacturing costs Taxes on factory 9,500 Factory maintenance 19,000 Factory machinery depreciation 79,000 Fixed selling and administrative costs Lease of equipment for sales staff 19,000 Accounting staff salaries 69,000 Administrative management salaries 149,000 Required: 1. Prepare a contribution margin income statement for the company.2. Compute its contribution margin per unit.
Answer:
See below.
Explanation:
Contribution margin income statement is as follows,
Sales (4,550*305) 1,387,750
Less: Variable costs
Plastic for casting 127,400
Wages 423,150
Drum Stand 168,350
Variable selling 118,300
Contribution 550,550
Less: Fixed costs
Taxes on factory 9,500
Maintenance 19,000
Depreciation 79,000
Lease of equipment 19,000
Accounting staff 69,000
Admin staff 149,000
Profit before tax 206,050
Tax @ 40% 82,420
Profit after tax 123,630
Contribution margin per unit can be calculated as,
Contribution margin / unit = Total contribution / Number of units
Contribution Margin / unit = 550,550 / 4550 = $121/unit
Contribution margin % = 121/305 = 39.6%
Hope hat helps.
Andrew's share of net income is $35,000 and Barbara's share of net income is $45,000. Which of the following would be included in a closing entry as a result of these allocations?a. Andrew's capital account would be debited for $35,000.b. Andrew's capital account would be credited for $40,000.c. The income summary would be debited for $80,000.d. Barbara's capital account would be credited for $40,000.
Answer:
c. The income summary would be debited for $80,000
Explanation:
While closing the entry we debited the income summary account for $80,000 which includes the Andrew share of net income for $35,000 and Barbara share of net income for $45,000
In mathematically,
Income summary = Andrew share of net income + Barbara share of net income
$80,000 = $35,000 + $45,000
$80,000 = $80,000 = Balanced
Mervon Company has two operating departments: mixing and bottling. Mixing has 300 employees and occupies 23,485 square feet. Bottling has 200 employees and occupies 19,215 square feet.
Indirect factory costs for the current period follow: administrative, $220,000; and maintenance, $208,000.If the maintenance costs are allocated to operating departments based on square footage, determine the amount of maintenance costs allocated to each operating department.
Answer:
Mixing department = $208,000 × 0.55 = $114,400
Bottling department = $208,000 × 0.45 = $93,600
Explanation:
The computation of the allocation of the maintenance costs to each operating department is shown below:
Mixing department = 23,485 square feet
Bottling department = 19,215 square feet
Total square feet = 42,700 square feet
Now the weightage would be
Mixing department = Mixing department square feet ÷ Total square feet
= 23,485 ÷ 42,700
= 0.55
And, for bottling department would be
= Bottling department square feet ÷ Total square feet
= 19,215 ÷ 42,700
= 0.45
Now the allocation would be
Mixing department = $208,000 × 0.55 = $114,400
Bottling department = $208,000 × 0.45 = $93,600
Compute the dollar change and percent change for each account title, and select the answer choice from the drop-down list. Use year 1 as the base year. Accounts Payable balance on Year 1 is $75,000 and on Year 2 is $65,000. Bonds Payable balance on Year 1 is $225,000 and on Year 2 is $220,000. Common Stock balance on Year 1 is $300,000 and on Year 2 is $310,000. Retained Earnings balance on Year 1 is $100,000 and on Year 2 is $145,000. Total Stockholder’s Equity balance on Year 1 is $400,000 and on Year 2 is $455,000.
Answer:
See Below.
Explanation:
We calculate the changes as follows,
Accounts payable
Year 1 = 75,000
Year 2 = 65,000
$ Change = $-10,000
% Change = -10000/75000 = -13.3%
Bonds Payable
Year 1 = 225,000
Year 2 = 220,000
$ Change = $-5,000
% Change = -5000/ 225,000 = -2.22%
Common Stock
Year 1 = 300,000
Year 2 = 310,000
$ Change = $10,000
% Change = 10000/300000 = 3.33%
Retained Earnings
Year 1 = 100,000
Year 2 = 145,000
$ Change = $45,000
% Change = 45,000/ 100,000 = 45%
Total Stockholders' Equity
Year 1 = 400,000
Year 2 = 455,000
$ Change = $55,000
% Change = 55,000/400,000 = 13.75%
Hope that helps.
Flagstaff Company has budgeted production units of 9,800 for July and 10,000 for August. The direct materials requirement per unit is 3 ounces (oz.). The company has determined that it wants to have safety stock of direct materials on hand at the end of each month to complete 25% of the units of budgeted production in the following month. There was 7,350 ounces of direct material in inventory at the start of July. The total cost of direct materials purchases for the July direct materials budget, assuming the materials cost $1.20 per ounce, is:
Answer:
$35,460
Explanation:
The computation of the total cost of direct material purchase is shown below:
= Ending inventory + required production - beginning inventory
where,
Ending inventory would be
= 10,000 × 3 ounces × 25%
= 7,500 ounces
Opening inventory is 7,350 ounces
And, the required production would be
= 9,800 × 3 ounces
= 29,400 ounces
Now put these values to the above formula
So, the value would equal to
= 7,500 ounces + 29,400 ounces - 7,350 ounces
= 29,550 ounces
For $1.20 per pounce, it would be
= 29,550 ounce × $1.20
= $35,460
Consider the following events:25,000 shares of preferred stock, cumulative, 5%, $10 par was issued for $15 a share.The annual cash dividend was declared and paid to the above preferred stock.The company purchased 12,000 shares of common stock at $17 per share to be held as Treasury stock.Interest of $8,000 was paid to bondholders.Bonds Payable with a par value of $100,000 were retired at $108,000.Compute the net cash flow from financing activities (parentheses indicate an outflow):A) $ 58,500B) $(71,500)C) $ 50,500D) $ 45,500
Answer
The answer and procedures of the exercise are attached in the following archives.
Step-by-step explanation:
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
Value of a mixed stream Harte Systems, Inc., a maker of electronic survillance equipment, is considering selling the rights to market its home security system to a well-known hardware chain. The proposed deal calls for the hardware chain to pay Harte $28 comma 000 and $21 comma 000 at the end of years 1 and 2 and to make annual year-end payments of $12 comma 000 in years 3 through 9. A final payment to Harte of $15 comma 000 would be due at the end of year 10. a. Select the time line that represents the cash flows involved in the offer. b. If Harte applies a required rate of return of 11% to them, what is the present value of this series of payments? c. A second company has offered Harte an immediate one-time payment of $90 comma 000 for the rights to market the home security system. Which offer should Harte accept?
Answer:
A. See attached image
B. $93,446.35
C. He should accept the first offer from the hardware chain
Explanation:
A time line is a line that chronological orders events according to the time they occurred
The present value is the present value of after tax cash flows from an investment.
The present value can be calculated using a financial calculator.
Cash flow for year 1 =$28,000
Cash flow for year 2 =$21,000
Cash flow for year 3 -9 =$12,000
Cash flow for year 10 =$15.000
I = 11%
PV =$93,446.35
Hart should accept the first offer from the hardware chain because the present value of the first offer $93,446.35 is greater than the present value of $90,000.
I hope my answer helps you.
A newspaper article informs you that most businesses reduced production in the last quarter of the year, but also sold from their inventories during that quarter. Based on this information, GDP llikely___________.
1. increased.
2. decreased.
3. stayed the same.
4. may have increased, decreased, or stayed the same.
Answer:
2. decreased.
Explanation:
GDP represents the monetary value of all goods and services produced within a nation's geographic borders over a specified period of time. So, since production is reduced, it means GDP will decrease.
Marigold Corp. issued at a premium of $9200 a $198000 bond issue convertible into 4800 shares of common stock (par value $20). At the time of the conversion, the unamortized premium is $3600, the market value of the bonds is $218000, and the stock is quoted on the market at $60 per share. If the bonds are converted into common, what is the amount of paid-in capital in excess of par to be recorded on the conversion of the bonds?
Prepare the journal entry to record the conversion of the bonds to common stock.
Answer:
Explanation:
The journal entry is shown below:
Bonds payable A/c Dr $198,000
Premium on bonds payable A/c Dr $3,600
To Common stock A/c $96,000
To Paid in capital in excess of par - Common stock A/c $105,600
(Being the conversion of bonds is recorded)
The computation is shown below:
For Common stock:
= 4,800 shares × $20
= $96,000
And, the remaining balance is credited to paid in capital in excess of par
An economy is operating with output $400 billion above its natural level, and fiscal policymakers want to close this expansionary gap. The central bank agrees to adjust the money supply to hold the interest rate constant, so there is no crowding out. The marginal propensity to consume is 4/5, and the price level is completely fixed in the short run.
Answer:
[tex]\Delta G= 400 billion \frac{1}{5}= 80 billions[/tex]
To close the expansionary gap, the government would need to spending by 80 billion
Explanation:
Assuming this question: "To close the expansionary gap, the government would need to spending by ? billion"
Previous concepts
The government expenditure multiplier "denoted by K, the impact of a change in income following a change in government spending".
The marginal propensity to consume denoted by MPC "is a metric that quantifies induced consumption, the concept that the increase in personal consumer spending occurs with an increase in disposable income"
Solution to the problem
Fo this problem we need to find the Government multiplier (K) with the following formula:
[tex] K=\frac{1}{1-MPC}[/tex]
Wehre MPC represent the marginal propensity to consume. And if we replace we got this:
[tex] K=\frac{1}{1-\frac{4}{5}}=5[/tex]
And now we can find the government decrease with the following formula:
[tex]\Delta G= \Delta Y \frac{1}{K}[/tex]
And for this case the output is [tex]\Delta Y = 400 billion[/tex], and we have everything in order to replace:
[tex]\Delta G= 400 billion \frac{1}{5}= 80 billions[/tex]
So thn the answer woud be: "To close the expansionary gap, the government would need to spending by 80 billion"
Economist Bruce Kirchhoff contends that business failures are much lower than traditionally reported.
A. True
B. False
A company wishes to hedge its exposure to a new fuel whose price changes have a 0.6 correlation with gasoline futures price changes. The company will lose $1 million for each 1 cent increase in the price per gallon of the new fuel over the next three months. The new fuel's price change has a standard deviation that is 50% greater than price changes in gasoline futures prices. If gasoline futures are used to hedge the exposure what should the hedge ratio be? What is the company's exposure measured in gallons of the new fuel? What position measured in gallons should the company take in gasoline futures? How many gasoline futures contracts should be traded? Each contract is on 42,000 gallons.
Answer:
0.9; 100 million; 90 million; 2,143
Explanation:
The new fuel's price change has a standard deviation that is 50% greater than price changes in gasoline futures prices.
So, if standard deviation of future prices is taken as '1' then for spot price it will be 50% higher, i.e 1.5
The hedge ratio:
= Correlation × (standard deviation of spot price ÷ Standard deviation of future prices)
= 0.6 × (1.5 ÷ 1)
= 0.9
The company has an exposure of 100 million gallons of the new fuel.
Gallons in future gasoline:
= Hedge ratio × 100 million gallons of the new fuel
= 0.9 × 100
= 90 million
Each contract is on 42,000 gallons, then
Number of gasoline futures contracts should be traded:
= 90,000,000 ÷ 42,000
= 2,142.9 or 2,143
Final answer:
The hedge ratio is 0.9, and the company has an exposure of 100 million gallons. The company should take a position of approximately 90 million gallons in gasoline futures, which corresponds to about 2143 contracts.
Explanation:
The hedge ratio can be calculated using the formula Hedge Ratio = Correlation Coefficient * (Standard Deviation of the Asset's Price Changes / Standard Deviation of the Futures Price Changes). Given that the correlation between the new fuel's price changes and gasoline futures price changes is 0.6 and the standard deviation of the new fuel's price changes is 50% greater than that of gasoline futures, the hedge ratio is 0.6 * (1 + 0.5) = 0.9.
The company's exposure measured in gallons is the amount it stands to lose for a 1 cent increase in the price per gallon of the new fuel. As it loses $1 million for each 1 cent increase, and each gallon increments by 1 cent, the exposure is $1 million / ($0.01/gallon) = 100 million gallons.
Given this exposure, the company should take a position in gasoline futures that is the product of the exposure and the hedge ratio: 100 million gallons * 0.9 = 90 million gallons. To find out the number of gasoline futures contracts to be traded, we divide the gallons hedged by the size of one contract: 90 million gallons / 42,000 gallons per contract ≈ 2143 contracts. Therefore, the company should trade approximately 2143 gasoline futures contracts to hedge its exposure.
Suppose you invest $20,000 by purchasing 200 shares of Abbott Labs (ABT) at $50 per share, 200 shares of Lowes (LOW) at $30 per share, and 100 shares of Ball Corporation (BLL) at $40 per share. Suppose over the next year Ball has a return of 12.5%, Lowes has a return of 21%, and Abbott Labs has a return of -10%. The return on your portfolio over the year is ________.
a. 0%
b. 5.7%
c. 3.8%
d. 7.6%
Answer:
ER(P) = RABT(WABT) + RLOW(WLOW) + RBBL(WBBL)
ER(P) = -10(0.50) + 21(0.30) + 12.5(0.20)
ER(P) = -5 + 6.3 + 2.5
ER(P) = 3.8%
Value of ABT = 200 shares @ $50 = $10,000
Value of LOW = 200 shares @30 = $6,000
Value of BBL = 100 shares @ $40 = $4,000
Total value of investments $20,000
Weight of ABT = $10,000/$20,000 x 100 = 50%
Weight of LOW = $6,000/$20,000 x 100 = 30%
Weight of BBL = $4,000/$20,000 x 100 = 20%
Explanation:
In this case, we need to calculate the expected return of the portfolio, which is the aggregate of return of each stock multiplied by the weight of each stock. The weight of each stock is the value of each stock divided by the total investment. The variables are defined as follows:
ER(P) = Expected return of portfolio, WABT = Weight of ABT, WLOW = weight of LOW, WBBL = weight of BBL, RABT= Return of ABT, RLOW = Return of LOW and RBBL = return of BBL.
According to given equation, the return on your portfolio over the year is equal to option C: 3.8%
What is the term Portfolio about?The term portfolio refers to as a collection of various investments, stocks, bonds and fixed deposits. It can include gold and mutual funds.
ER(P) = Return on ABT (Weight of ABT) + Return on LOW(Weight of LOW) + Return on BLL (Weight of BBL)
ER(P) = -10(0.50) + 21(0.30) + 12.5(0.20)
ER(P) = -5 + 6.3 + 2.5
ER(P) = 3.8%
Working Note:-
Value of ABT= 200 shares $50 = $10,000
Value of LOW = 200 shares 30 = $6,000
Value of BLL= 100 shares $40 = $4,000
Total value of investments =$20,000
Weight of ABT = $10,000/$20,000 x 100 = 50%
Weight of LOW = $6,000/$20,000 x 100 = 30%
Weight of BLL= $4,000/$20,000 x 100 = 20%
Therefore, correct option is C.
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