Colin should regularly review current events to help him evaluate the underlying investment environment. Staying informed about current economic, political, and social events can provide valuable insights into market trends, industry developments, and potential risks or opportunities.
By monitoring news, financial reports, and other relevant sources, Colin can make more informed investment decisions and adjust his strategies accordingly.
While personal investment strategies and individual securities are important to consider, regularly reviewing the broader investment environment through current events will provide Colin with a broader perspective and help him assess the overall market conditions that may impact his investment decisions.
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The town of Khatmal has two citizens: a rich citizen (R) and a poor one (P). It has a road that leads to the neighbouring town; however, this road needs to be cleaned everyday, otherwise ash from the neighbouring thermal power plant settles on the road and makes it impossible to use it. Cleaning the road costs 1/- every day. R has to go to work in the neighbouring town and has to use this road, whereas P works in Khatmal and therefore do not use this road much. The daily income of R is 15/- and that of P is 10/-. Let x; denote the private good consumed by each citizen and m denote the amount of cleaning service provided. The cost of the private good is also 1. The utility functions of the two citizens are given by: UR = ln XR + 2ln m; Up = ln xp + ln m a. Set up the maximization problems for R and P. Let mR and mp denote the amount of road cleaning demanded by R and P, respectively. Without doing any math, describe whether you expect me and mp to be equal or different, and give two reasons for your answer. b. Solve mathematically for me and mp. What is the resulting utility of R and P? What is therefore the social surplus in the economy? The government of Khatmal is concerned that there is a market failure in the provision of road cleaning services and is considering a public provision option financed by taxes on R and P. However, the tax collector is unable to distinguish between R and P as it is each for R to disguise as P. Hence, the government is restricted to taxing everyone the same amount to finance the cleaning. I.e., if m units of cleaning are provided, everyone is charged m/2 in taxes. c. What amount of daily cleaning should the government provide to maximize social surplus (assume the government maximizes the sum of the utilities of R and P)? What would be the resulting utility of and P under this level of provision? Discuss any differences from the utilities in part b above, and also comment on any changes in social surplus. d. Does the sum of the individuals' marginal rates of substitution equal the price ratio? Why do you think? e. Now suppose that it is possible to distinguish between R and P, thus allowing differential taxation. Now how much of m does the government provide, and how is the tax burden divided? Calculate the sum of the individuals' marginal rates of substitution, and compare with part d above. Also calculate resulting individual and social surplus.
a) Maximization problem for R: max ln XR + 2ln m subject to 15 - X m - m >= 0. Maximization problem for P: max ln Xp + ln m subject to 10 - X m >= 0. If mR > mp, it would mean that R would pay more taxes but also get more benefit from the cleaning. The opposite would be true if mp > mR. Therefore, it is not clear whether mR and mp are equal or different.
b) Maximization problem for R: max ln XR + 2ln m subject to 15 - X m - m >= 0. Maximization problem for P: max ln Xp + ln m subject to 10 - X m >= 0. Solving the maximization problems, we get mR = mp = 1. The resulting utility of R is 2.3, and the resulting utility of P is 2.3. The social surplus in the economy is 1.6.
c) The government should provide 2 units of daily cleaning to maximize social surplus. The resulting utility of R is 2.38, and the resulting utility of P is 2.15. The utility of R is higher, and the utility of P is lower than in part b. The social surplus is 1.64, which is higher than in part b.
d) The sum of the individuals' marginal rates of substitution does not equal the price ratio. The reason for this is that the price ratio is the same for both individuals, but their marginal rates of substitution are not the same. Therefore, the sum of their marginal rates of substitution is not equal to the price ratio.
e) If it is possible to distinguish between R and P, the government should provide 1.5 units of daily cleaning. R should pay 0.75 in taxes, and P should pay 0.5 in taxes. The sum of the individuals' marginal rates of substitution is 3, which is higher than in part d. The resulting individual and social surplus are as follows: UR = 2.81, Up = 2.39, and social surplus = 1.42.
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If the interest on a note is 12.0% and the principal was $110,000, what is the maturity value of the note if the note is payable in 8 months? O $13,200 O $123,200 $8,800 O $118,800
Given that the interest on a note is 12.0% and the principal was $110,000. We have to find the maturity value of the note if the note is payable in 8 months.
Since the principal was $110,000 and the interest on the note is 12.0%. The interest would be the product of principal and interest rate per annum times time in years. Here, time is given in months; therefore, we need to convert it into years by dividing it by 12.Maturity Value = Principal + InterestInterest = (Principal × Rate × Time)/100Where,P = $110,000R = 12% per annumT = 8/12 yearsNow, we can use the above formula to calculate the interest.
I = (110,000 × 12 × 8/12) / 100= (110,000 × 1 × 2/3) / 100= $2,200Maturity Value = Principal + Interest= $110,000 + $2,200= $112,200Hence, the maturity value of the note is $112,200.
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Problem statement - Supply Chain Coordination Part II
S-Mart is a local convenience store (retailer), which manages an inventory of a SKU for resell to customers. S-Mart faces a constant demand for the SKU (i.e., demand rate is "horizontal" and not random) with the annual total demand being 25,000 units, and orders from a local supplier for resupplies.
S-Mart uses the EOQ model to manage its inventory. It costs $60 ordering cost for S-Mart to place an order. The supplier charges S-Mart $50 for each unit of supply. S-Mart’s inventory holding cost per unit, per year is 35% of the cost of purchase from the supplier. (Let's assume all assumptions for the EOQ model are satisfied.)
For every order received from S-Mart, the supplier executes one production run to fully and instantly meet the order's requirement. The supplier’s setup cost for each production run is $180. The supplier delivers the order to S-Mart immediately after production, so the supplier holds no inventory.
(Continue with supply chain in "Supply Chain Coordination Part I", but with the following new information.)
Suppose that you correctly calculate the costs of S-Mart and the supplier to be as follows:
If S-Mart uses the EOQ that is optimal for itself (i.e., S-Mart), then
S-Mart's annual total costs = $6,480
The supplier's annual total costs = $9,702
If S-Mart uses the EOQ that is optimal for for the supply chain (i.e., S-Mart and the supplier combined), then
S-Mart's annual total costs = $8,103
The supplier's annual total costs = $4,858
Answer the following questions:
1. To create an incentive for S-Mart and the supplier to participate in "coordination" with a transfer payment, it must be paid by _____ to the other firm.
Group of answer choices:
S-Mart
The supplier
Neither
2. The amount of the payment must fall in the range of [ Select ] ["from $3,222 to $3,245", "from $4,858 to $6,480", "from $8,103 to $9,702", "from $1,623 to $4,844"]
1) The incentive for S-Mart and the supplier to participate in "coordination" with a transfer payment must be paid by The supplier to the other firm.
2) The amount of the payment must fall in the range of from $3,222 to $3,245.
1. The coordination of the supply chain provides mutual benefit to both S-Mart and the supplier, which is why supply chain coordination is desirable. In the current situation, if S-Mart utilizes the EOQ that is optimal for itself, the annual total cost will be $6480, but if S-Mart utilizes the EOQ that is optimal for the supply chain, the annual total cost will be $8103.
To encourage the supply chain to participate in coordination with a transfer payment, the supplier must pay the incentive to the other firm as the supplier's annual total cost has a greater decline.
2. The transfer payment must be within a specific range to ensure that the coordination is beneficial to both parties. The transfer payment from the supplier to S-Mart must be between $3,222 and $3,245 for supply chain coordination to be beneficial.
This is found by calculating the annual total cost difference if S-Mart uses the EOQ that is optimal for itself and the annual total cost difference if S-Mart uses the EOQ that is optimal for the supply chain. In this scenario, the transfer payment falls in the above range.
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Ivanhoe Corporation borrowed $62,400 on November 1, 2020, by signing a $63,600, 3-month, zero-interest-bearing note. Prepare Ivanhoe’s November 1, 2020, entry; the December 31, 2020, annual adjusting entry; and the February 1, 2021, entry. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
The entries for Ivanhoe Corporation borrowed $62,400 on November 1, 2020, by signing a $63,600, 3-month, zero-interest-bearing note are as follows:
November 1, 2020, entry:
Cash 62,400.00Discount on Notes Payable 1,200.00Notes Payable 63,600.00December 31, 2020, annual adjusting entry:
Discount on Notes Payable 400.00Interest Expense 400.00February 1, 2021, entry:
Notes Payable 63,600.00Discount on Notes Payable 800.00Interest Expense 800.00Here’s the explanation:
The entry on November 1, 2020, will record the borrowing of $62,400 from the bank. The difference between the face value of the note and the cash received is the discount on notes payable. Here, the discount on the note is $1,200 ($63,600 - $62,400). The journal entry to record the borrowing on November 1, 2020, is:Cash 62,400.00Discount on Notes Payable 1,200.00Notes Payable 63,600.00On December 31, 2020, the end of the accounting period, adjusting entries are made for the accrued interest expense and to recognize the increase in the discount on the notes payable. As the note is a zero-interest-bearing note, the company has to pay back the full amount due ($63,600) on maturity, which is on February 1, 2021.
Interest is calculated by multiplying the face value of the note by the annual interest rate by the fraction of the year from issuance to maturity. Here, the amount of interest expense is $400 ($63,600 × 0% × 2/12). The journal entry to record the adjusting entry on December 31, 2020, is:
Discount on Notes Payable 400.00Interest Expense 400.00On February 1, 2021, the company pays back the loan in full. The journal entry to record the payment on February 1, 2021, is:
Notes Payable 63,600.00Discount on Notes Payable 800.00Interest Expense 800.00
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what is the gross margin percentage for pcg-how hotas warthog pc?
As an AI language model, I don't have real-time access to current financial data or specific product information. As of my knowledge cutoff in September 2021, Pacific Gas and Electric Company (PCG) is a utility company and not directly related to the "Hotas Warthog" PC.
Gross margin percentages can vary depending on various factors such as production costs, sales prices, and industry standards. To obtain the specific gross margin percentage for the mentioned product, it would be best to consult the manufacturer, retailer, or official sources for the most up-to-date and accurate information.
The gross margin percentage is a financial metric that indicates the profitability of a product or company. It is calculated by subtracting the cost of goods sold (COGS) from the total revenue and then dividing the result by the total revenue. This percentage represents the portion of revenue that remains after deducting the direct production costs.
In the case of the "Hotas Warthog" PC, which appears to be a product related to gaming or flight simulation, the specific gross margin percentage would depend on factors such as the cost of manufacturing the product, including components, labor, and overhead expenses, as well as the selling price.
To determine the exact gross margin percentage for the "Hotas Warthog" PC, it would be necessary to have access to the financial information of the manufacturer or retailer responsible for the product. They would be able to provide detailed data on production costs and revenues to calculate the specific gross margin percentage for that particular product.
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A corporation issued 6,000 shares of its $10 par value common stock in exchange for land that has a market value of $84,000 The entry to record this transaction would include A. A debit to Land for $60,000. B. A credit to paid (Contributed) Capital in Excess of Par Value, Common Stock for $24.000 C. A debit to Common Stock for $60,000 D, A credit to Land for $60,000
The entry to record the transaction where a corporation issued 6,000 shares of its $10 par value common stock in exchange for land that has a market value of $84,000 would include:
A. A debit to Land for $60,000.
C. A debit to Common Stock for $60,000.
The correct answer is a combination of options A and C.
When a corporation issues stock in exchange for non-cash assets, such as land, the general principle is to record the transaction at the fair market value of the assets received. In this case, the market value of the land is $84,000. To properly record the transaction, the following entries would be made: Debit Land for $60,000: This recognizes the fair market value of the land received. The difference between the fair market value ($84,000) and the par value of the stock ($10 x 6,000 shares = $60,000) represents the contributed capital in excess of par value. Debit Common Stock for $60,000: This entry records the par value of the shares issued, which is $10 per share multiplied by the number of shares issued (6,000 shares). The answer options B and D are incorrect because they do not accurately reflect the accounting treatment required in this scenario. Option B suggests crediting Contributed Capital in Excess of Par Value, but this account is not applicable in this specific transaction. Option D suggests crediting Land for $60,000, but this amount does not represent the fair market value of the land received. Therefore, the correct answer is A. A debit to Land for $60,000 and C. A debit to Common Stock for $60,000.
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According to Barak Obama, ""middle-class squeeze"" is largely due to ethical problems with:
O corporate culture
O the white community
O the black community
O racism, sexism, and power
According to Barack Obama, the "middle-class squeeze" is largely due to ethical problems with Corporate culture.
Barack Obama has highlighted corporate culture as a significant factor contributing to the "middle-class squeeze." Corporate culture refers to the values, norms, and behaviors that exist within an organization, particularly in relation to the treatment of employees and the pursuit of profit. Obama suggests that ethical problems within corporate culture can contribute to the challenges faced by the middle class.
This perspective aligns with Obama's broader concerns about income inequality and economic opportunities for the middle class. He argues that when corporations prioritize profits over the well-being of their employees and the broader society, it can exacerbate the squeeze on the middle class. This can manifest through stagnant wages, reduced job security, and limited upward mobility.
By highlighting corporate culture as a key factor, Obama emphasizes the need for ethical reforms within the business world to address the middle-class squeeze and promote a more inclusive and prosperous society.
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Mary Willis is the advertising manager for Bargain Shoe Store. She is currently working on a major promotional campaign. Her ideas include the installation of a new lighting system and increased display space that will add $24,000 in fixed costs to the $270,000 currently spent. In addition, Mary is proposing that a 5% price decrease ($40 to $38) will produce a 20% increase in sales volume (20,000 to 24,000). Variable costs will remain at $24 per pair of shoes. Management is impressed with Mary's ideas but concerned about the effects that these changes will have on the break-even point and the margin of safety. Compute break-even point and margin of safety ratio, and prepare a CVP income statement before and after changes in business environment.
Before computing the break-even point and margin of safety ratio, let's first calculate the new variable cost of the shoes using the information provided. Variable cost per pair of shoes = $24Fixed cost = $270,000 + $24,000 = $294,000New selling price per pair of shoes = $38The contribution margin per pair of shoes can now be computed as follows:
Contribution margin = Selling price per pair of shoes - Variable cost per pair of shoes Contribution margin = $38 - $24Contribution margin = $14Now, let's compute the break-even point:
BEP = Fixed cost / Contribution marginBEP = $294,000 / $14BEP ≈ 21,000 pairs of shoes Next, let's compute the margin of safety ratio:Margin of safety ratio = (Current sales - BEP) / Current sales margin of safety ratio = (20,000 - 21,000) / 20,000Margin of safety ratio = -0.05 or -5%This negative result suggests that the store is not making any profits, as it is operating below its break-even point. Therefore, the store should be wary of the effects of the changes on the margin of safety ratio.
Preparing the CVP income statement, before the changes, will give: Sales revenue = 20,000 × $40 = $800,000Variable costs = 20,000 × $24 = $480,000Contribution margin = $320,000Fixed costs = $270,000Net income before taxes = $50,000After the changes, the CVP income statement will be: Sales revenue = 24,000 × $38 = $912,000Variable costs = 24,000 × $24 = $576,000Contribution margin = $336,000Fixed costs = $294,000Net income before taxes = $42,000
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Answer the questions following the fact patterns using the IRAC format:
1) James and Conrad enter into a valid contract that reads, "Conrad will pick-up and deliver to James a car. Conrad will drive the car from New York to James' residence in California."
A] While driving the car to California Conrad is involved in an accident with Aileen. Aileen sues Conrad and wins. Conrad pays Aileen. What is Conrad's best argument to recover from James?
IRAC format refers to Issue, Rule, Analysis, and Conclusion. I. Issue: Can Conrad recover from James for the damages he paid to Aileen as a result of the accident?
R. Rule: To determine Conrad's best argument, we need to consider the principles of contract law. Generally, a party may seek indemnification or reimbursement from another party if there is an agreement or legal basis for such recovery.
A. Analysis: 1) In this case, Conrad entered into a valid contract with James, which obligated Conrad to pick up and deliver a car from New York to James' residence in California.
2) The contract does not explicitly address the issue of liability for accidents or damages incurred during transportation.
3) Generally, absent any specific contractual provisions, a party may not hold the other party liable for damages resulting from the performance of a contract unless there is a breach of duty or negligence.
4) However, in this situation, Conrad may argue that James should bear the responsibility for the accident and the resulting damages.
5) Conrad's argument could be based on the implied warranty of workmanlike performance, which implies that the person performing the contract has the necessary skills and will carry out the task in a reasonably competent manner.
6) Conrad can contend that James breached this implied warranty by providing a defective car or by failing to disclose any known mechanical issues that contributed to the accident.
7) If Conrad can establish that James breached the implied warranty and this breach directly caused the accident, Conrad may have a valid argument for recovering from James.
C. Conclusion:Conrad's best argument to recover from James would be based on the implied warranty of workmanlike performance. If Conrad can show that James provided a defective car or failed to disclose known mechanical issues that led to the accident, Conrad may be able to seek indemnification or reimbursement from James for the damages paid to Aileen.
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Case Study
Charlotte is being groomed for a future position at an executive level within a multinational organization in the petrochemical industry. She has performed a variety of roles within the company, all of which were located in her home country, and in non-technical areas. The organization’s policy is for each individual on its fast track to occupy at least one position overseas, running a subsidiary or overseas office.
Charlotte was offered a position in Algeria, a predominantly Arabic-speaking and Muslim North African country. It was a relatively new location for the organization. It had opened an office there because oil had recently been discovered offshore and there was a great opportunity to drill for oil and share in the proceeds with the government. Charlotte had not been briefed in any way about the country, its security concerns or politics, only about the exciting oil partnership deal. She had decided that as it was located close to Europe, she could fly back to her home country fairly easily if required. With a husband willing to take a leave of absence from his job, and her young children excited for the "new adventure," she was all set.
A few weeks before starting her new assignment, Charlotte travelled to the country in question. Her first meeting was with the US ambassador, (as there was no UK embassy in the country), who warned her that her forthcoming appointment was already widely known about, and not just in a positive way. She was already apparently on the radar of Al-Qaeda, which was known to be operating within the country. What’s more, her place of residence was right next to the TV station, which had been taken over recently during a coup d'état. To make matters worse, on meeting with the newly appointed oil minister, he announced that the formula for the royalties split was being amended, so that her organization would receive less than what had been agreed upon initially, so it seemed she would face a tough challenge in dealing with the government. Charlotte met with a couple of locally recruited staff to get acquainted with them in advance of her assignment. The employees turned out to be contractors, and all appeared to be relatives of government ministers, their appointments ratified by the government. None spoke English and no one had any expertise in the oil industry.
Finally, the employee discovered that there were no schools which provided schooling in English or even French. Arabic was the national language. With small children, she had assumed there would be plenty of English-speaking nannies and teachers. As for her husband, who had planned to take leave of absence from his job, it transpired that the government was not granting entry visas for anyone other than direct employees working for organizations that had contracted with the government.
Question
In the absence of pre-departure training, discuss some aspects of Algerian culture, society, language, etiquette, manners, protocol, etc. would Charlotte likely experience that could lead to culture shock and psychological disorientation should she accept this international assignment? [15 marks]
In the absence of pre - departure training, Charlotte may experience certain thing that lead to culture shock such as Algerian culture, society, language, etiquette, manners, and protocol.
How would a person without pre-departure training experience culture shock in Algeria ?Arabic is the national language of Algeria, and Charlotte's lack of proficiency in Arabic may pose a significant language barrier. It is essential for her to familiarize herself with local customs, traditions, and social expectations to avoid misunderstandings or unintentionally causing offense.
As a predominantly Muslim country, Algeria has specific religious and social observances that Charlotte should be aware of and respect. Algeria, like many other countries, has its own cultural perspectives on gender roles and equality.
The absence of schools providing education in English or French can pose challenges for Charlotte's children. Adjusting to a new educational system, language barriers, and cultural differences in parenting and family life can contribute to the overall culture shock experienced by the entire family.
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At of 6.5 percent and a cost of equity of 11.9 percent. The debt-equity ratio is .75. As n's weighted average cost of capital?
The weighted average cost of capital for the company, given the cost of equity and debt - equity ratio is 9. 59 %.
How to find the weighted average cost of capital ?Debt - equity ratio is the same as:
= Debt / equity
Assuming equity is x, it can be put into the formula to denote it:
Debt = 0. 75 x
Total = 1. 75 x
Weighted average cost of capital is :
= Cost of debt x Weight of debt + Cost of equity x Weight of equity
= ( x / 1. 75x * 11. 9 ) + ( 0. 75x / 1. 75 x * 6. 5 )
= 9. 59%
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Full question is:
A firm has a cost of debt of 6.5 percent and a cost of equity of 11.9 percent. The debt–equity ratio is .75. There are no taxes. What is the firm's weighted average cost of capital?
be specific to the questions and answer them.
COMPANY RESEARCH Independently, pick a company of your choice. Read their sustainability plan, often available through their website • What kinds of goals have they outlined? Where is their focus in
The kinds of goals and focus areas that companies often include in their sustainability plans:
1. Environmental Sustainability: Companies may set goals related to reducing their carbon footprint, energy consumption, water usage, waste generation, and greenhouse gas emissions. They may also focus on adopting renewable energy sources and sustainable practices in their operations.
2. Social Responsibility: Companies may outline goals related to promoting diversity and inclusion, ensuring fair labor practices, providing safe working conditions, and supporting local communities through philanthropy and social initiatives.
3. Supply Chain Sustainability: Companies may emphasize responsible sourcing and supplier engagement, ensuring that their supply chain operates ethically, minimizes environmental impacts, and respects human rights.
4. Product Innovation and Circular Economy: Companies may prioritize developing sustainable products, promoting product recycling and reuse, and embracing the principles of the circular economy to minimize waste and maximize resource efficiency.
5. Stakeholder Engagement and Transparency: Companies may commit to engaging with stakeholders, including employees, customers, investors, and communities, and maintaining transparency in reporting their sustainability performance and progress towards goals.
It's important to note that the specific goals and focus areas can vary significantly depending on the industry, company size, and corporate values. Conducting independent research on a specific company's sustainability plan will provide more detailed insights into their goals and areas of focus.
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true/false answer section provided.
An information systems audit is an examination of the management controls within an Information technology (IT) infrastructure and business applications.
The external auditors represent outsiders, internal auditors represent the interests of the organization.
Fraud audit may be initiated by management who suspect employee fraud.
Control risk is the likelihood that the control structure is flawed because controls are either absent or inadequate to prevent or detect errors in the accounts.
The purpose of transaction authorization is to ensure that all material transactions processed by the information system are valid and in accordance with management’s objectives.
Information systems audit is an examination of the management controls within an Information technology (IT) infrastructure and business applications.
True/false statements regarding information systems audit and related terms are as follows:
Information systems audit is an examination of the management controls within an Information technology (IT) infrastructure and business applications:
True The external auditors represent outsiders, internal auditors represent the interests of the organization:
True Fraud audit may be initiated by management who suspect employee fraud:
True Control risk is the likelihood that the control structure is flawed because controls are either absent or inadequate to prevent or detect errors in the accounts:
True The purpose of transaction authorization is to ensure that all material transactions processed by the information system are valid and in accordance with management’s objectives:
True These are the five questions that were answered and they are all true.
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Conway, Kip, and Zack are partners with capital balances as follows: Conway, $367,200; Kip, $122,400; and Zack, $244,800. The partners share incomes and losses in a 30%: 40%: 30% ratio. Young is admit
After admitting Young as a new partner, the capital balances of the partners would be as follows:
Conway: $305,000
Kip: $102,000
Zack: $204,000
Young: $0
To determine the new capital balances after admitting Young as a partner, we need to calculate the new capital contributions and adjust the existing capital balances accordingly.
The given information states that Conway, Kip, and Zack have capital balances of $367,200, $122,400, and $244,800, respectively. The income and losses are shared in a 30%:40%:30% ratio.
First, we calculate the total capital of the existing partners:
Total capital = Conway's capital + Kip's capital + Zack's capital
Total capital = $367,200 + $122,400 + $244,800
Total capital = $734,400
Next, we determine the individual capital contributions of the partners based on the given income-sharing ratio:
Conway's capital contribution = Total capital * Conway's ratio
Conway's capital contribution = $734,400 * 30%
Conway's capital contribution = $220,320
Kip's capital contribution = Total capital * Kip's ratio
Kip's capital contribution = $734,400 * 40%
Kip's capital contribution = $293,760
Zack's capital contribution = Total capital * Zack's ratio
Zack's capital contribution = $734,400 * 30%
Zack's capital contribution = $220,320
The new capital balances would be the sum of the capital contributions and the existing capital balances:
Conway's new capital balance = Conway's capital contribution + Conway's existing capital
Conway's new capital balance = $220,320 + $367,200
Conway's new capital balance = $587,520
Kip's new capital balance = Kip's capital contribution + Kip's existing capital
Kip's new capital balance = $293,760 + $122,400
Kip's new capital balance = $416,160
Zack's new capital balance = Zack's capital contribution + Zack's existing capital
Zack's new capital balance = $220,320 + $244,800
Zack's new capital balance = $465,120
Finally, since Young is being admitted as a new partner, their capital balance would initially be $0 until they make a capital contribution.
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GMAT Success From "Cost Accounting". Horngren, Foster & Datar Adapted by C. Mendoza Emma Frost is considering selling GMAT Success, a test prep book and software package for the business school admission test, at a college fair in Chicago. Emma knows she can purchase this package from a wholesaler at $120 per package, with the privilege of returning all unsold packages and receiving a full $120 refund per package. She also knows that she must pay $2 000 to the organizers for the stand rental at the fair. She will incur no other costs. She must decide whether she should rent the stand. Emma gathers information about the type of individuals likely to attend the fair and other test- prep packages that might be sold at the fair. She also gathers evidence on her past experiences selling GMAT Success at fairs very much like the Chicago fair. Using all the information available to her, Emma predicts that she can charge a price of $200 for GMAT Success. At that price, she is reasonably confident that she can sell at least 30 packages and possibly as many as 60. Question n° 1: What will be the operating profit if sales are 20 packages? 40 packages? Question n° 2: What will be the breakeven point in units? What will be breakeven revenues? What will be the safety margin if expected sales are 40 packages? Question n°3: How many packages must be sold to earn a target operating profit of $1,600? Emma is contemplating whether to reduce the selling price to $175. At this price, she thinks she will sell 50 units (instead of 40). At this quantity, the test-prep package wholesaler who supplies GMAT Success will sell the packages to Emma for $115 per unit instead of $120. Question n°4: Should Emma reduce the selling price?
The cost accounting will be calculated as follows:Operating profit = Revenue - CostsTotal cost of Emma = $2000 (stand rental) + $120x (cost of 1 package) = $2000 + $120x; Where x is the number of units sold
1: If the sales are 20 packages, then the operating profit will be:Operating profit = Revenue - CostsRevenue = Selling price × Units soldRevenue = $200 × 20 = $4000Operating profit = $4000 - $2000 - $120(20) = $1600If the sales are 40 packages, then the operating profit will be:Revenue = $200 × 40 = $8000Operating profit = $8000 - $2000 - $120(40) = $4002:Breakeven point: To find the breakeven point in units, we will equate total cost to the total revenue.
Total revenue = Total cost$200x = $2000 + $120x$80x = $2000x = 25. Therefore, Emma will have to sell 25 units to reach the breakeven point.
In dollar terms, breakeven revenues = Selling price × Number of units sold = $200 × 25 = $5000The safety margin:Expected sales = 40 packages.Therefore, the safety margin will be (Expected sales - Breakeven point) / Expected sales× 100%=(40 - 25) / 40 × 100%= 37.5%3:To earn the target operating profit of $1,600:Operating profit = Revenue - Costs $1600 = ($200x) - [$2000 + ($120x)]$1600 + $2000 = $200x - $120x$3600 = $80xX = $3600 / $80 = 45.Therefore, Emma needs to sell 45 units to earn the target operating profit of $1,600.
4:If Emma reduces the selling price to $175 and she can sell 50 units, then the operating profit will be:
Operating profit = Revenue - Costs Revenue = Selling price × Units sold = $175 × 50 = $8750 Total cost of Emma = $2000 (stand rental) + $115x (cost of 1 package) = $2000 + $115x If 50 units are sold, then x = 50O perating profit = $8750 - $2000 - $115(50) = $1750Thus, Emma should not reduce the selling price because the operating profit would decrease from $4,000 to $1,750.
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The Cupcakery is a chain of bakeries in the mid-Atlantic region of the US dust operates wing on a calendar year hos Assane the net profit (low) for the Cupcakery in 2020 before incorporating my deprecation deduction is $34.000 of a profit to addon the only tangible personal property the company still owns in 2020 is a large amount of expponent that had purchased on May 5, 2013 for $390,000, which has been used each year to make is cupcakes. In the your in which it acquired the epopeant, de Capcalary opted not to ale any Sec. 179 on the equipment and no other tangible personal was purchased throughout 2018 However, the company dad apply hom depreciation to the expugnent in 2018. Assume the bonus deprecation%lowed in 2011 for this property was 5% (feat from be% allowed in 2020)
What is the net profit (loss) for 2020 per chuding the relevant total deprecation deduction for year 2020
Use the appre depreciation table from your note sheet textbook where necessary.
The net profit (loss) for 2020, including the relevant total depreciation deduction, is -$21,701.
To calculate the net profit (loss) for 2020 including the relevant total depreciation deduction, we need to consider the depreciation expenses for the equipment and subtract them from the net profit before incorporating depreciation.
Given information:
Net profit (loss) before incorporating depreciation deduction in 2020: $34,000
Equipment purchase date: May 5, 2013
Equipment purchase cost: $390,000
Bonus depreciation rate in 2011: 5%
To calculate the depreciation expense for the equipment in 2020, we need to determine the depreciable base and apply the appropriate depreciation rate.
Depreciable Base:
The depreciable base is the purchase cost minus any depreciation deductions taken in previous years. Since the Cupcakery opted not to take any Section 179 or other depreciation deductions in 2018, the depreciable base for 2020 is still $390,000.
Depreciation Expense:
Bonus depreciation was allowed at a rate of 5% for the equipment acquired in 2013. Since the bonus depreciation rate has changed over the years, we need to use the appropriate depreciation table provided in your note sheet or textbook to calculate the depreciation expense.
Assuming the depreciation table shows a 7-year recovery period for the equipment, the annual depreciation rate for year 2020 would be 14.29% (100% divided by 7 years).
Depreciation Expense for 2020:
Depreciation Expense = Depreciable Base * Depreciation Rate
Depreciation Expense = $390,000 * 14.29% = $55,701
Net Profit (Loss) for 2020 including Depreciation Deduction:
Net Profit (Loss) = Net Profit before incorporating depreciation - Depreciation Expense
Net Profit (Loss) = $34,000 - $55,701 = -$21,701
Therefore, the net profit (loss) for 2020, including the relevant total depreciation deduction, is -$21,701.
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1. what are taxonomic categories and how do consumers use them to structure knowledge in memory
2. what is a schema? identify strategies that marketers can use in order to increase :
- favorability
- uniqueness
- salience
1. Taxonomic categories are divisions or classifications of things based on their characteristics. These categories help consumers structure knowledge in memory by providing a mental framework for organizing and remembering information.
2. A schema is a mental framework or blueprint that helps individuals organize and interpret information.Marketers can use various strategies to increase the favorability, uniqueness, and salience of their product schemas
1. Taxonomic categories are divisions or classifications of things based on their characteristics. These categories help consumers structure knowledge in memory by providing a mental framework for organizing and remembering information. Consumers use taxonomic categories to compare and contrast products, identify patterns and relationships, and make decisions based on their needs and preferences. For example, a consumer might use taxonomic categories like "electronics" or "kitchen appliances" to group similar products together in their mind and recall information about them more easily.
2. A schema is a mental framework or blueprint that helps individuals organize and interpret information. Schemas are used to make sense of new experiences and information by comparing them to existing knowledge in memory.
Marketers can use various strategies to increase the favorability, uniqueness, and salience of their product schemas:
Favorability: Marketers can increase the favorability of a product schema by creating positive associations with the brand. This can be achieved through advertising, endorsements, or product placement, among other methods.
Uniqueness: Marketers can increase the uniqueness of a product schema by highlighting distinctive features or benefits that set it apart from competitors. This can be achieved through product design, packaging, or branding.
Salience: Marketers can increase the salience of a product schema by making it more memorable and easily accessible in memory. This can be achieved through repetition, visual cues, or other mnemonic devices.
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Arabian Gulf Corporation reports the following stockholders' equity section on December 31, 2020. - Common stock; $10 par value; 500,000 shares authorized; 200,000 shares issued and outstanding.. .$ 2,000,000 - Paid in capital in excess of par value, common stock -Retained earnings.. ..400,000 900,000 $3,300,000 Total The Corporation completed the following transactions in 2021. 1- Jan. 10, Directors declared a $1 per share cash dividend payable on March 15 to the Jan. 31 stockholders of record. 2- Mar. 01, Purchased 10,000 shares of its own common for $15 per share. 3- Mar. 15, Paid the cash dividend declared on Jan. 10. 4- May 01, Sold 6,000 of its treasury shares at $15 cash per share. 5-Sep. 30, Directors declared a 30% stock dividend when the share market price is $16. 6- Nov. 01, Distributed stock dividends declared on Sep. 30. 7- Nov. 15. The company implemented 5-for-1 stock split for the common stock. Required; Prepare journal entries to record each of these transactions for 2021. CLEARLY INDICATE THE DEBITS & CREDITS Example: XYZ Company pays $10,000 cash to purchase land Answer: Dr. Land 10,000 Cr. Cash 10,000 For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac)
Journal entries to record each of these transactions for 2021 are:Jan. 10:Declaration of cash dividends payable on March 15 to the Jan. 31 stockholders of record means that: Total amount of dividend = $1 × 200,000 = $200,000 Dividend payable account Dr. $200,000 Dividend payable account Cr. $200,000
Mar. 01: Purchase of 10,000 shares of its own common for $15 per share: Treasury stock account Dr. $150,000 Cash account Cr. $150,000 Mar. 15: Payment of cash dividends: Dividend payable account Dr. $200,000 Cash account Cr. $200,000 May 01: Sale of 6,000 treasury shares at $15 cash per share: Cash account Dr. $90,000 Treasury stock account Cr. $90,000
Sep. 30: Declaration of 30% stock dividends: Total number of new shares = 30% of 200,000 = 60,000 Total amount to be transferred from retained earnings = Market price × 60,000 = $16 × 60,000 = $960,000 Retained earnings account Dr. $960,000 Common stock dividend distributable Cr. $240,000 ([$16 par value × 60,000 shares] /
Oct. 31: After adjusting the retained earnings balance, the Common Stock Dividend Distributable account reflects the shares to be distributed: Common stock dividend distributable account Dr. $240,000 Common stock account Cr. $240,000
Nov. 01: Implementation of 5-for-1 stock split: Common stock account Dr. $2,000,000 ([$10 par value × 200,000 shares] × 5) Additional paid-in capital account Cr. $2,000,000 ([$10 par value × 200,000 shares] × 4) Hope this helps!
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Which of the following statements is true? A. As the degree of specialization and interdependence has increased over the years, dependency on government services has declined. B. Decreased specialization leads to increased reliance on others. C. Increased specialization leads to decreased interdependence. D. Increased specialization leads to increased interdependence. E. The degree of specialization in the U.S. has decreased over the years. F. I'm not sure A. B. C. D. E.
The correct answer is D. Increased specialization leads to increased interdependence.
Specialization refers to the process of individuals, firms, or countries focusing on producing specific goods or services in which they have a comparative advantage. As specialization increases, individuals and entities become more specialized in their respective areas, leading to greater expertise and efficiency in production.
This increased specialization fosters interdependence among various parties. As each specialized entity focuses on producing a specific product or service, they rely on other specialized entities to provide goods or services that they do not produce themselves. This interdependence is driven by the need for trade and exchange of specialized products, creating a network of interconnected economic relationships.
Therefore, as specialization increases, so does interdependence, as entities rely on each other's specialized contributions to meet their diverse needs and create a more efficient economy.
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number 24
24) You have just deposited $14,500 into an account that promises to pay you an annual interest rate of 7.2 percent each year for the next 8 years. You will leave the money invested in the account and
This is the future value of the initial investment and the interest that it has earned. This calculation shows that compounding can be a powerful tool for growing your savings over time.
Investing in an account that earns interest is a smart way to grow your money over time. This process is called compounding. Compound interest is the interest earned on the initial investment and the accumulated interest on that investment. It is calculated by multiplying the initial investment amount by one plus the interest rate raised to the number of compounding periods.
In this case, the initial investment is $14,500, the interest rate is 7.2 percent, and the compounding period is annually. The time frame is eight years.
To calculate the interest, we can use the following formula:
Future Value = Present Value * (1 + Interest Rate)Time
We plug in the given information into the formula as follows:
Future Value = $14,500 * (1 + 0.072)⁸
Future Value = $14,500 * 1.6768
Future Value = $24,324.96
After 8 years, the account will have accumulated a total of $24,324.96.
This is the future value of the initial investment and the interest that it has earned. This calculation shows that compounding can be a powerful tool for growing your savings over time.
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Consider a 20-year (T) lease providing for annual payments at the end of the years. The initial rent is $30/SF (CF), but that rent will grow at a rate of 2.5% per year (g) each year thereafter. What is the PV of the lease, per SF, assuming an opportunity cost of capital of 8% (r) per year?
The present value (PV) of the lease, per square foot (SF), is $25.47.
To calculate the present value (PV) of the lease, we need to determine the annual cash flows and discount them to their present value using the opportunity cost of capital rate. The lease provides for annual payments at the end of each year for a period of 20 years. The initial rent is $30 per square foot (SF), and it will increase by 2.5% per year thereafter.
Step 1:
To calculate the PV, we can use the formula for the present value of an annuity:
PV = CF * [1 - (1 + g)^(-T)] / (r - g)
where PV is the present value, CF is the cash flow in the first year, T is the number of years, r is the opportunity cost of capital rate, and g is the growth rate.
Step 2:
In this case, CF is $30/SF, T is 20 years, r is 8% per year, and g is 2.5% per year. Plugging these values into the formula, we get:
PV = $30 * [1 - (1 + 0.025)^(-20)] / (0.08 - 0.025)
≈ $30 * [1 - (1.025)^(-20)] / 0.055
≈ $30 * [1 - 0.5605] / 0.055
≈ $30 * 0.4395 / 0.055
≈ $13.185 / 0.055
≈ $239.727
To express the PV per SF, we divide the PV by the SF:
PV per SF = $239.727 / 9.4
≈ $25.47
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Farmer's market is open to all residents in Swissburg. Right now there are 28 farmers, each sells a unique variety of cheese. Cheese prices on the market vary from $4 to $26 per pound. Most farmers love the cheese they make and earn positive profits. What type of market is this? (monopoly, oligopoly, perfect competition, or monopolistic competition) Is it accurate to say that this market is definitely not in a short-run equilibrium because cheese prices do not appear to converge to one level? Can we say that this market is not in long-run equilibrium?
The type of market is monopolistic competition. It is also accurate to say that this market is not in short-run equilibrium and not in the long run equilibrium.
This is because there are many producers of similar but not identical products. Each of the 28 farmers has a unique variety of cheese to offer. They compete with each other to attract customers by selling their cheeses at a price lower than their competitors’.
It is also accurate to say that this market is not in short-run equilibrium because cheese prices do not appear to converge to one level. This is because of the unique varieties of cheese that each farmer offers. They are able to set their prices based on the uniqueness of their product. There is no standard price for cheese in this market, which means it is not in short-run equilibrium.
We can say that this market is not in long-run equilibrium because in long-run equilibrium, all firms in the industry would be earning zero economic profit. This is not the case in this market as most farmers love the cheese they make and earn positive profits. Therefore, the market is not in long-run equilibrium.
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a physician has written a study plan to test whether an approved drug can prevent headaches. the physician has sent this plan to the pharmaceutical company that makes the drug, and the company has agreed to provide the drug at no cost for the study. this is an example of:
We can see here that this is an example of: clinical trial.
What is a study plan?A study plan is a structured schedule or outline that individuals create to guide their learning and academic activities. It serves as a roadmap for organizing and managing one's time, resources, and efforts in order to achieve specific learning goals and academic success.
A clinical trial is a research study that tests the safety and effectiveness of a medical intervention in humans. In this case, the medical intervention is the drug that the physician wants to test for its ability to prevent headaches.
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The physician has devised a study plan, outlining the methodology and objectives of the research.
By reaching out to the pharmaceutical company that manufactures the drug, the physician has successfully obtained their agreement to provide the medication free of charge for the study. This demonstrates a cooperative effort between the medical community and the industry to conduct scientific investigations and gather valuable data on the drug's potential in headache prevention. The arrangement signifies a mutually beneficial relationship, as the pharmaceutical company benefits from the scientific inquiry into their product, while the physician gains access to the necessary resources to conduct the study.For such more questions on methodology
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The cash register tape for Waterway Industries reported sales of $27,192.00. Record the journal entry that would be necessary for each of the following situations. (a) Sales per cash register tape exceeds cash on hand by $54.50. (b) Cash on hand exceeds cash reported by cash register tape by $33.00. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 52.75.)
The journal entry of the given transactions would include (a) Dr. Accounts Receivable $27,192.00 and Cr. Sales $27,192.00 and (b) Dr. Cash $27,159.50 and Cr. Sales $27,126.50.
The cash register tape for Waterway Industries reported sales of $27,192.00.
Record the journal entry that would be necessary for each of the following situations.
(a) Sales per cash register tape exceed cash on hand by $54.50.
Debit Credit
Accounts Receivable $27,192.00
Sales $27,192.00
Since the sales per cash register tape exceeds cash on hand by $54.50, the company needs to record the sales in their journal entry as Accounts Receivable $27,192.00 and Sales $27,192.00.
(b) Cash on hand exceeds cash reported by cash register tape by $33.00.
Debit Credit
Cash $27,159.50
Sales $27,126.50
If cash on hand exceeds cash reported by cash register tape by $33.00, the company has to record the cash on hand as Debit to Cash $27,159.50 and Sales $27,126.50 as Credit.
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Fill in the blanks in the following table, where Q is units of output, FC is fixed cost, VC is variable cost, TC is total cost, MC is marginal cost, AFC is average fixed cost, AVC is average variable
The following is the filled table, where Q is units of output, FC is fixed cost, VC is variable cost, TC is total cost, MC is marginal cost, AFC is average fixed cost, AVC is average variable cost. Output (Q) Fixed Cost (FC) Variable Cost (VC) Total Cost (TC) Marginal Cost (MC) Average Fixed Cost (AFC) Average Variable Cost (AVC) 0 $ 600 $ 0 $ 600 - - - 1 600 200 800 200 600 200 2 600 350 950 150 300 475 3 600 450 1050 100 200 350 4 600 550 1150 100 150 287.5 5 600 700 1300 150 120 260 6 600 900 1500 200 100 250 7 600 1200 1800 300 85.7 257.14 8 600 1700 2300 500 100 287.5 9 600 2700 3300 1000 200 366.67 10 600 4200 4800 1500 300 480AFC = FC/Q, AVC = VC/Q, TC = FC + VC.QTherefore,FC/Q = AFC, VC/Q = AVC, TC/Q = AC.Let's define each of the terms used in the table;Output (Q) - This is the units of productionFixed Cost (FC) - These are the costs that do not vary with the level of outputVariable Cost (VC) - These are the costs that vary with the level of outputTotal Cost (TC) - These are the total costs incurred to produce a specific output levelMarginal Cost (MC) - This is the change in total cost resulting from an additional unit of production.Average Fixed Cost (AFC) - This is the fixed cost per unit of productionAverage Variable Cost (AVC) - This is the variable cost per unit of productionTherefore, the above table is the filled form of the cost schedule or table where all the terms of the cost analysis are defined and analyzed.
What is the value today of a money machine that will pay
$4,431.00 every six months for 15.00 years? Assume the first
payment is made 5.00 years from today and the interest rate is
5.00%?
The value today of a money machine that will pay $4,431 every six months for 15 years at an interest rate of 5% is $89,536.67.
The value today of a money machine that will pay $4,431 every six months for 15 years at an interest rate of 5% can be calculated by using the formula of the present value of an annuity. An annuity is a series of payments made at equal intervals of time. It is either a series of payments received by an individual or a series of payments paid by an individual.
The value of an annuity can be determined by calculating the present value of that annuity. Present value of an annuity: PV = A/i [1 - 1/(1+i)^n]Where, PV = Present value of an annuity = Annuity payments, I = Interest rate n = Number of payments. The first payment will be received after 5 years. Since the payment is made every 6 months, the number of payments will be 30 (15 years x 2 payments per year).
Therefore, n = 30 and i = 2.5% (5% ÷ 2). A = $4,431PV = 4431/0.025 [1 - 1/ (1.025)^30]PV = $89,536.67Hence, the value today of a money machine that will pay $4,431 every six months for 15 years at an interest rate of 5% is $89,536.67.
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Problem 3-12A (Algo) Nigel McCloskey is a waiter at Albicious Foods in South Carolina. He is single with one other dependent. He receives the standard tipped hourly wage. During the week ending Octobe
The payroll register for Nigel McCloskey for the week ending October 22, 20XX will include:
Regular hours: 44 hoursOvertime hours: NoneOvertime earnings: $0.00Tips: $210.00.What is Nigel McCloskey's gross pay for the week ending?To get Nigel McCloskey's gross pay, we need to consider his regular hourly wage, overtime pay, and tips.
We will calculate his regular earnings:
Regular hours worked: 44 hours
Regular hourly wage: Standard tipped hourly wage
Regular earnings = Regular hours worked x Regular hourly wage
Overtime hours worked: None (as Nigel worked 44 hours, which is within the regular hours limit)
Overtime hourly wage: Standard tipped hourly wage x 1.5
Overtime earnings = Overtime hours worked x Overtime hourly wage
Gross pay = Regular earnings + Overtime earnings + Tips.
Full question:
Nigel McCloskey is a waiter at Albicious Foods in South Carolina. He is single with one other dependent. He receives the standard tipped hourly wage. During the week ending October 22,20XX, he worked 44 hours and received $210 in tips. Calculate his gross pay, assuming his tips are included in the overtime rate determination. Complete the payroll register for Nigel McCloskey.
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Sato Awards has had a request for a special order of 10 silver-plated trophies from the provincial tennis association. The normal selling price of such a trophy is $249.95 and its unit product cost is $164.00, as shown below: Direct materials Direct labour Manufacturing overhead Unit product cost $ 93.00 56.00 15.00 $164.00 Most of the manufacturing overhead is fixed and unaffected by variations in how many trophies are produced in any given period. However, $7 of the overhead is variable, depending on the number of trophies produced. The customer would like a special logo applied to the trophies requiring additional materials costing $6 per trophy and would also require acquisition of a special tool costing $195 that would have no other use once the special order was completed. This order would have no effect on the company's regular sales, and the order could be filled using the company's existing capacity without affecting any other order. Required: a. What effect would accepting this order have on the company's operating income if a special price of $199.95 is offered per trophy for this order? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Net operating income increased by
Accepting the special order at the offered price of $199.95 per trophy would increase the company's operating income by $229.50.
Answer to the questionsSelling price per trophy for the special order: $199.95
Unit product cost of the trophy: $164.00
Additional materials cost per trophy: $6.00
Additional fixed manufacturing overhead cost per trophy: $0.00
Additional variable manufacturing overhead cost per trophy: $7.00
Additional cost for the special tool: $195.00
Contribution margin per trophy = Selling price per trophy - Unit product cost per trophy
Contribution margin per trophy = $199.95 - $164.00 = $35.95
Incremental contribution margin for the special order = Contribution margin per trophy - Additional materials cost per trophy - Additional variable manufacturing overhead cost per trophy
Incremental contribution margin for the special order = $35.95 - $6.00 - $7.00 = $22.95
Now, we can calculate the effect on the company's operating income:
Effect on operating income = Incremental contribution margin per trophy * Number of trophies in the special order
Effect on operating income = $22.95 * 10 = $229.50
Therefore, accepting the special order at the offered price of $199.95 per trophy would increase the company's operating income by $229.50.
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Make vs. Buy (Sourcing Decision) Eggers Company needs 37,000 units of a part to use in producing one of its products. If Eggers buys the part from McMillan Company for $100 instead of making it, Eggers will not use the released facilities in another manufacturing activity. Forty percent of the fixed overhead will continue irrespective of CEO Donald Mickey’s decision. The cost data are as follows:
Cost to make the part: Direct materials $ 37 Direct labor 20 Variable overhead 28 Fixed overhead 20 $ 105 Required:
1. Determine which alternative is more attractive to Eggers, and by what amount.
Based on the given data, the alternative of buying the part from McMillan Company is more attractive to Eggers, and the amount by which it is more attractive is $5.
The alternative which is more attractive to Eggers is to buy the part from McMillan Company for $100. The amount by which this alternative is more attractive can be determined as follows:
For Eggers Company,The cost to make the part:
Direct materials + Direct labor + Variable overhead + Fixed overhead= $ 37 + $20 + $28 + $20= $ 105
McMillan Company is selling the same part to Eggers for $100. This price is less than the cost to make the part, so Eggers should buy the part from McMillan Company. The amount by which this alternative is more attractive to Eggers is:
Amount = Cost to make - Cost to buy= $ 105 - $ 100= $ 5.
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A monopoly sells its goods in the United States, where the elasticity of demand is -2, and in Japan, where the elasticity of demand is -5. Its marginal cost is $10. At what price does the monopoly sell its goods in each country if resale is impossible?
The monopoly sells its goods at a price of $30 in the United States and $60 in Japan.
To determine the prices at which the monopoly sells its goods in each country, we need to consider the elasticity of demand and the monopoly's marginal cost.
In the United States:
Elasticity of demand (US) = -2
Since the elasticity is negative, we know that the demand curve is downward sloping. In this case, a more elastic demand indicates that consumers are more responsive to changes in price.
To maximize its profit, the monopoly sets its price where marginal cost equals marginal revenue. Since the demand elasticity is -2, the monopolist would set the price markup at half of the elasticity (1/2) to maximize profit.
Price markup = 1/2 * elasticity of demand = 1/2 * (-2) = -1
Marginal revenue (US) = 1 + price markup = 1 + (-1) = 0
To find the price, we need to add the marginal cost to the marginal revenue:
Price (US) = Marginal cost + Marginal revenue = $10 + $0 = $10
Therefore, the monopoly sells its goods at a price of $10 in the United States.
In Japan:
Elasticity of demand (Japan) = -5
Using the same logic as above, the price markup for Japan would be 1/2 * (-5) = -2.5.
Marginal revenue (Japan) = 1 + price markup = 1 + (-2.5) = -1.5
Price (Japan) = Marginal cost + Marginal revenue = $10 + (-$1.5) = $8.5
Therefore, the monopoly sells its goods at a price of $8.5 in Japan.
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