a type of short-term loan where the borrower sells its accounts receivables to the lender at a discount to face value is called
Answer:
its called a letter of credit
Explanation:
here
If Tarek and Samantha do not write wills and one or both were to pass away, how will the distribution of their assets be decided
If both Trek and Samantha do not write wills and passed away, their asset will be distributed to the beneficiaries through the court's letter of administration.
Usually, when an estates dies without a will stating its beneficiary, the asset will be administer by a court because no-one is recognized as a beneficiary to the deceased.
In conclusion, If both Trek and Samantha do not write wills and passed away, their asset will be distributed to the beneficiaries through the court's letter of administration.
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The following diagram shows the five styles of handling conflict. Select the correct label for each. Then read the scenario and determine which conflict-handling style to use in the given situation.
WORD BANK
- compromising
- collaborating
- dominating
- accommodating
- avoiding
Answer:
A. dominating
B. collaborating
C. compromising
D. avoiding
E. accommodating
Handling conflict in simple words we can say that it usually means handle a situation or the problem.
What is Handling style?Handling style are known to be the principles which gradually underline the methods which the managers use to handle situations.
The conflict handling style which would be used as per the diagram would be as The following diagram in the question shows the five styles of handling conflict it would be used as.
A. dominating
B. collaborating
C. compromising
D. avoiding
E. accommodating
Therefore in Handling style every manager has his own style of handling employees.
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Jazz is a high-end handbag manufacturing firm based in Italy. It has achieved peak sales and profits in the home-country market. Jazz now wants to cater to the different fashion sensibilities of women across the world. The firm sets up facilities for production, marketing, and sales in the United States, India, and Japan. Which of the following is most likely the reason for Jazz's global expansion?
a. Diversifying its customer base
b. Accessing a deeper, more diverse talent pool of skilled managers
c. Obtaining investment capital for increased production
d. Accessing better raw materials
Answer: B
Explanation:
Accessing a deeper, more diverse talent pool of skilled managers is most likely the reason for Jazz's global expansion. The correct option is b.
What is a global expansion in business?In terms of business, global expansion is when a business begins operating in another country, usually to take advantage of local market conditions or lucrative opportunities to increase revenue or reduce costs.
Global expansion refers to any business activity in a new territory, from selling products or services, dealing in raw materials, manufacturing, exporting, importing or employing. Global expansion is often linked to fast-growing businesses that recognise they can make more money if there is a demand for what they do abroad, or if they can reduce costs by operating in a new territory. It can also be about driving brand recognition in a new region or even leveraging market share from a competitor who is also active in that part of the world.
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A machine costing $185,000 with a 5-year life and $20,000 residual value was purchased January 2. Compute depreciation for each of the five years, using the double-declining-balance method.
The computation of the depreciation for each of the five years under the Double-declining-balance method is as follows:
Year Depreciation Expense
Year 1 $74,000 ($185,000 x 40%)
Year 2 $44,400 ($111,000 x 40%)
Year 3 $26,640 ($66,600 x 40%)
Year 4 $15,984 ($39,960 x 40%)
Year 5 $3,976 ($23,976 - $20,000)
Data and Calculations:
Cost of Equipment = $185,000
Residual value = $20,000
Depreciable amount = $165,000 ($185,000 - $20,000)
Estimated useful life = 5 years
Depreciation rate = 40% (100/5 x 2)
Depreciation for the five years:
Year 1 = $74,000 ($185,000 x 40%)
Reduced balance = $111,000 ($185,000 - $74,000)
Year 2 = $44,400 ($111,000 x 40%)
Reduced balance = $66,600 ($111,000 - $44,400)
Year 3 = $26,640 ($66,600 x 40%)
Reduced balance = $39,960 ($66,600 - $26,640)
Year 4 = $15,984 ($39,960 x 40%)
Reduced balance = $23,976 ($39,960 - $15,984)
Year 5 = $3,976 ($23,976 - $20,000)
Thus, the accumulated depreciation at the end of year 5 is $165,000.
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While cultural differences should always be considered, which industry should be especially aware of traditions when trying to enter a foreign market
Countries of the world have different cultures. The food industry should be aware of traditions when trying to enter a foreign market.
A food industry entering a foreign market must take note of the traditions, customs and food that is consumed in that place.
There are different factor to consider when entering a foreign market. The
factors are;
Gross Domestic ProductUnemployment Rate InflationThe influence of culture on international marketing is very great. A marketer have to take a good study about the local culture thoroughly before offering a product to them.
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Select Service Partner (SSP) Group has operations in 30 countries involving food and beverage establishments, often in transit hubs such as airports and railway stations. SSP also operates Starbucks locations in airports in Finland, Sweden, and Norway. SSP pays Starbucks a royalty based on sales, as well as a fee for each store. In these instances, Starbucks is engaged in ____________.
In this situation, Starbucks is engaged in franchising.
Franchising is a business model or method that involves:
A big company allowing individual business owners to sell the products of the big company.Individual business owners must only sell the products of the company and use its brand and trademark.Individual business owners need to pay a fee to the company or give a percentage of the revenue.A good example of franchising is the situation of Starbucks previously described. This is because:
Starbucks is allowing Select Service Partner to sell its products, use its brand, etc.In exchange Select Service Partner must pay a fee and give Starbucks a royalty based on sales.Learn more in: https://brainly.com/question/11540013
Suppose the current price of a pound of chicken is $3 per pound and the equilibrium price is $6 per pound. What takes place
If the current price of a pound of chicken is $3 per pound and the equilibrium price is $6 per pound what takes place is: a) There is a shortage , so the price rises and quantity demanded decreases.
The current price of $3 per pound is lesser that the equilibrium price of $6 per pound which means that their is shortage.
The shortage indicate that their is increase in demand in the market because the quantity demanded is higher than the quantity supplied.
Therefore the rise in price of goods and services will lead to decrease in the quantity demanded of such goods or product.
Inconclusion what takes place is: a) There is a shortage , so the price rises and quantity demanded decreases.
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Your client, Leo Getz, was elected to the bench on the Supreme Court of Washington last year. As such, he is required to attend court in Olympia at a minimum of two days a week but usually spends four days each week at this location. Justice Getz resides in Spokane and has lived there for the last 30 years. He is registered to vote in Spokane, has a home and lives with his wife and three children there. In addition to being a state Supreme Court Justice, Mr. Getz is a professor at the Gonzaga School of Law and will continue teaching one class per semester. He plans on maintaining his residence in Spokane and to continue renting an apartment in Olympia for when he is required to be there. Justice Getzâs schedule is as follows:
He spends Sunday evening through Thursday in Olympia where he attends to his Supreme Court duties. He drives back to Spokane Thursday afternoon and teaches his class on Friday afternoon. For the remainder of Friday, Saturday and Sunday, he spends his time grading papers, preparing for his next class and also spends additional time with regard to his judicial duties reading briefs and records and clerk memos, writing opinions, etc. At the Washington Supreme Court, Justice Getz has an office, staff, and access to the State law library. Nonetheless, he completes much of his judicial work at the law school library in Spokane during the weekends.
Justice Getz earns $175,000 per year as a member of the Supreme Court and an additional $30,000 from Gonzaga for teaching his classes.
Justice Getz is reimbursed for much of his travel expenses to and from Olympia. In addition, he pays rent for his Olympia apartment and is wondering what the tax consequences of this situation are and whether he can take a deduction on Schedule A for his unreimbursed expenses and whether there are any tax consequences to his reimbursement for travel expenses.
Your client, Justice Getz, is late in filing his taxes so he provided the above information as it pertains to his 2017! tax return â prior to the Tax Cuts and Jobs Act that was effective in 2018⦠Ignore any potential limitations on employee business expenses that were effective starting in 2018. Determine where his "Tax Home" is located.
According to the IRS rules, Justice Leo Getz's tax home is Washington and not Spokane nor Olympia, where he maintains living homes.
The IRS tax home rule defines a tax home as the taxpayer's principal place of business, employment, or post of duty. This rule does not consider where the taxpayer maintains a family home. Without a regular or main place of business, or living place, the taxpayer is an itinerant worker and has a tax home as where they work.
Thus, Justice Getz's tax home is neither Spokane nor Olympia but Washington.
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the fijian dollar is currently trading for AUD 2.55. if the interest rate in australia is 5.5% and the interest rate in New Zealand is 6.5% what would be the one year forward exchange rate
Since the interest rate in Australia is 5.5% and the interest rate in New Zealand is 6.5%, then the one-year forward exchange rate is 1 Fijian dollar equals 2.53 AUD.
The information given from the question is that 1 Fijian dollar = 2.55 AUD.
Based on the information, the foreign currency is Fijian dollar while the home currency is AUD. Therefore, the forward rate will be:
= 2.55 × [(1 + 5.5%) / (1 + 6.5%)
= 2.55 × (1.055 / 1.065)
= 2.55 × 0.99
= 2.53
In conclusion, 1 Fijian dollar equals 2.53 AUD.
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In this chapter, we have been discussing pension plans (and a little bit about post-retirement plans), mainly how to account for defined benefit plans. After having learned at least some of the complexities of accounting for a defined benefit plan, express your opinion about whether these plans are worth it. Come at this from the perspective of the employer, the employee/retiree, and the government and write what you think -- are they worth it
It should be noted that defined benefit plans are worth it as they provide a secure lifetime retirement income for the employee.
Defined benefit plans are also known as the traditional pension plan. It gives a specified payment amount in retirement. It's important as it allows employees and employers to be able to invest funds in order to save for retirement.
Defined benefit plans are beneficial as they give eligible employees a guaranteed income for life when they retire. This is important as the person can have a source of income when they're not working anymore.
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a deductible of $500 requires ( select the correct answer )
Answer:
ɴᴏ ᴘɪᴄ sᴏʀʀʏ :(( ʙʏᴇ :)))
Multiple-choice help me, pls.
16) If the supply of iPads increases, then
i. the supply curve for iPads has shifted rightward.
ii. the price of iPads has decreased.
iii. there will be a movement upward along the iPad supply curve.
A) i only
B) i, ii and iii
C) i and ii
D) ii and iii
E) i and iii
30) Which of the following statements is correct?
A) Consumer surplus equals the price paid for a good.
B) The consumer surplus from a good is always larger than the total benefit from the good.
C) An increase in price decreases consumer surplus.
D) An increase in price has no effect on consumer surplus.
E) The consumer surplus from a good or service must always equal producer surplus.
Answer:
33) A firm's marginal revenue is
A) the change in total revenue that results from a one-unit increase in the quantity sold.
B) total revenue minus total cost.
C) the change in total revenue minus the change in total cost.
D) the change in total revenue that results from an increase in the demand for the good or service.
E) less than the market price for a perfectly competitive firm.
Answer:
34) Suppose a perfectly competitive firm's minimum average variable cost is $3 when it produces 50. If the price is $2 and the firm's marginal cost is $2, the firm should
A) continue to produce, but produce more than 50.
B) continue to produce 50.
C) continue to produce, but produce less than 50.
D) shut down.
E) continue to operate, but to determine the amount of production needs more information than is given.
Answer:
42) Discretionary fiscal policy is a fiscal policy action, such as
A) an interest rate cut, initiated by an act of Congress.
B) an increase in payments to the unemployed, initiated by the state of the economy.
C) a tax cut, initiated by an act of Congress.
D) a decrease in tax receipts, initiated by the state of the economy.
E) an increase in the quantity of money.
Answer:
43) The magnitude of the government expenditure multiplier is ________ the magnitude of the tax multiplier.
A) greater than
B) equal to
C) less than
D) not comparable to
E) greater than for expansionary policy and less than for contractionary policy
Answer:
44) An increase in government expenditure can ________ potential GDP and an increase in taxes can ________ potential GDP.
A) increase; increase
B) increase; never change
C) decrease; decrease
D) never change; never change
E) increase; decrease
Answer:
45) When the Fed increases the federal funds rate,
A) there is no effect on investment because investment depends on the real interest rate.
B) the real interest rate falls, and investment increases.
C) the real interest rate rises, and investment decreases.
D) the real interest rate is unaffected, but investment still decreases.
E) the real interest rate rises, and investment does not change.
Answer:
46) The Fed raises the federal funds rate. Which of the following changes occurs most rapidly?
A) Exchange rate rises.
B) Consumption expenditure decreases.
C) Aggregate demand decreases.
D) Real GDP growth decreases.
E) Inflation rate decreases.
Answer:
47) If the Fed increases the quantity of money and lowers the federal funds rate, real GDP ________ and the price level ________.
A) increases; increases
B) increases; decreases
C) decreases; increases
D) decreases; decreases
E) increases; does not change
Answer:
48) Raising the federal funds rate shifts the aggregate demand curve ________ so that real GDP ________ and the price level ________.
A) rightward; increases; rises
B) leftward; decreases; rises
C) rightward; increases; falls
D) leftward; decreases; falls
E) leftward; increases; rises
Answer:
A(n) ________ is a coherent set of interdependent processes and structures that dictates how the company searches for novel problems and solutions, synthesizes ideas into a business concept and product designs, and selects which projects get funded. innovation system organizational development human resource inventory organizational behavior
Based on business analysis, an innovation system is a coherent set of interdependent processes and structures that dictates how the company searches for novel problems and solutions.
Innovative systems generally synthesize ideas into a business concept and product designs and select which projects get funded.
Innovation system usually involves significant components such as the following:
Information, TechnologyPeople, Enterprises, InstitutionsInnovation system. Generally used to facilitate and assist innovation to the success stage.
Hence, in this case, it is concluded that the correct answer is "innovation systems."
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Efficiency wages are a way to reward raw talent and abilities. a way to compensate workers for experience and training. a way to compensate workers in unattractive or unpleasant jobs. an incentive scheme designed to motivate and retain workers.
Answer:
An incentive scheme designed to motivate and retain workers.
Explanation:
Answer:
An incentive scheme designed to motivate and retain workers.
Explanation:
The market value weighted-average beta of firms included in the market index will always be _____________.
The key issue in oligopoly markets is the seller's actions: a.Completely independent of each other. b.Controlled by the main seller in the market. c.Interdependent in that the actions of one seller directly impact all other sellers. d.Regulated or controlled by a government agency.
It should be noted that a key factor in oligopoly markets is that the sellers are C. Interdependent in that the actions of one seller directly impact all other sellers.
Oligopoly simply refers to the market that has a small number of firms who are interdependent of each other's price and output policies.
It should be noted that the firms cannot act independently. They have to take other sellers into consideration when making a decision.
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Correct answers only and no links please:)
Explain the term 'Social enterprise'. State the differences between the objectives of Social enterprises and Business enterprises
Answer:
Social entrepreneurs seek innovative ways and operate to drive change, whereas social enterprises form to fulfill a business purpose and solve societal needs through their commercial activities.
Personal communication systems such as personal networks and grapevines:
a. Contain only a small amount of organizational communications.
b. Spread more information across organizations than formal communication channels such as downward communications.
c. Contain less accurate information than other organizational communication systems.
d. Spread information hierarchically throughout the organization, from boss to employee and from employee to boss, for example.
Answer:
b. Spread more information across organizations than formal communication channels such as downward communications.
Explanation:
Personal communication systems carry more information in organizations than any other type of communication channel or system. They also carry large amounts of information, which is often very accurate, and they spread information widely, without regard for organizational levels or hierarchy.
define motivation.explain it's importance.
Answer:
motivation refers to those wishes,desire, drive that stimulates or activation the man to do things..
Explanation:
The important words here are 'needs', 'values' and 'goals' and these are the building blocks of motivation that lead to actions: Needs are basic requirements for survival and may be physical or psychological; for example, hunger, thirst, love or friendship.
I hope you are motivated to this answer......
4. List and discuss five key ideas of the Tanpin Kanri business approach and explain how companies and organizations outside of the retail industry, specifically using universities as an industry example (higher education), could learn from this approach.
Tanpin Kanri's business approach focuses on demand chain driving using the point of sale to determine the most effective points of sale to generate sales and which products available at the point of sale are selling the most.
The five key ideas of the Tanpin Kanri approach are as follows:
Market analysis.Analysis of market share potential.Attractiveness analysis.Competitiveness Analysis.Value creation analysis.Therefore, making a parallel with this approach used in the retail sector for universities, the analyzes can be used to analyze knowledge production and identify new strategies to ensure greater student adherence, generating motivation and value for students.
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On December 31, 2015, Dow Steel Corporation had 600,000 shares of common stock and 300,000 shares of 8%, noncumulative, nonconvertible preferred stock issued and outstanding. Dow issued a 4% common stock dividend on May 15 and paid cash dividends of $400,000 and $75,000 to common and preferred shareholders, respectively, on December 15, 2016. On February 28, 2016, Dow sold 60,000 common shares. In keeping with its long-term share repurchase plan, 2,000 shares were retired on July 1. Dowâs net income for the year ended December 31, 2016, was $2,100,000.
The income tax rate is 40%.
As part of an incentive compensation plan, Dow granted incentive stock options to division managers at December 31 of the current and each of the previous two years. Each option permits its holder to buy one share of common stock at an exercise price equal to market value at the date of grant and can be exercised one year from that date. Information concerning the number of options granted and common share prices follows:
Date Granted (adjusted for the stock dividend) Options Granted Share Price
31-Dec-14 8,000 $24
31-Dec-15 3,000 $33
31-Dec-16 6,500 $32
Required:
Compute Dowâs earnings per share for the year ended December 31, 2016.
Dowâs earnings per share for the year ended December 31, 2016 is $3 per share.
First step is to compute common shares on January 1 to December 31
Common shares on January 1 to December 31 = 600,000 ×(1 + 0.04) × (12/12)
Common shares on January 1 to December 31 = 600,000 × 1.04 ×1
Common shares on January 1 to December 31 =624,000
Second step is to compute common shares on February 28 to December 31
Common shares on February 28 to December 31 = 60,000 × (1 + 0.04) × (10/12)
Common shares on February 28 to December 31= 60,000 ×1.04 × (10/12)
Common shares on February 28 to December 31= 52,000
Third step is to compute number of repurchased shares on July 1 to December 31
Number of repurchased shares on July 1 to December 31 = 2,000 × (6/12)
Number of repurchased shares on July 1 to December 31 = 1,000
Fourth step is to compute number of weighted shares
Number of weighted shares=624,000 + 52,000- 1,000
Number of weighted shares= 675,000
Fifth step is to compute the earning per share
Earnings per share = (Net income - Preferred dividend) / Number of weighted shares
Earnings per share= ($2,100,000 - $75,000) / 675,000
Earnings per share= $2,025,000 / 675,000
Earnings per share=$3 per share
Inconclusion Dowâs earnings per share for the year ended December 31, 2016 is $3 per share.
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George wants to buy a Government Bond that will mature in 4 years. which type of bond will best meet his needs ?
A. T-bills
B. treasury notes
C. treasury bonds
D. treasury information protection securities
Answer: b
Explanation:
George wants to buy a Government Bond that will mature in 4 years. The bond which will best meet his needs would be treasury notes. Thus option (B) is correct.
What are treasury notes?A treasury note is a U.S. government debt security. A treasury note has a fixed interest rate and maturity between two and 10 years.
A person can buy a treasury notes trough a competitive bids, in which an investor specifies the yield, or non-competitive bids, in which the investor accepts whatever yield is determined.
A Treasury note is just like a treasury bond, except that it owns a differing maturities. The treasury bond has lifespan between 20 to 30 years.
So we can say that the George wants to buy a Government Bond that will mature in 4 years. The bond which will best meet his needs would be treasury notes. Therefore, option (B) is correct.
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Suppose Malaysia's production possibilities include a maximum of 120 units of rice or 300 units of lumber, and Canada's production possibilities include a maximum of 200 units of rice or 200 units of lumber. Then suppose each country initially allocates 50% of its labor to producing each product. a) Total production by the two countries equals tons of rice and ft3 of lumber. b) Now suppose that Malaysia increases the labor it allocates to lumber by 10%. Its lumber production rises by and its rice production falls by . c) Of Canada allocates its labor to increase its rice production by exactly the amount that Malaysia's rice production fell, by how much must its lumber production fall
A) the total production of Malaysia would be 60 tons of rice and 150 ft3 of lumber, and the total production of Canada would be 100 tons of rice and 100 ft3 of lumber; B) the production of rice would fall by 6 tons and the production of lumber would rise by 15 ft3; and C) Canada's lumber production would fall by 10 ft3.
Supposing Malaysia's production possibilities include a maximum of 120 units of rice or 300 units of lumber, and Canada's production possibilities include a maximum of 200 units of rice or 200 units of lumber, and supposing each country initially allocates 50% of its labor to producing each product, to determine A) the total production by the two countries equals tons of rice and ft3 of lumber, B) now supposing that Malaysia increases the labor it allocates to lumber by 10%, the number by which its lumber production rises by and its rice production falls by, and C) if Canada allocates its labor to increase its rice production by exactly the amount that Malaysia's rice production fell, by how much must its lumber production fall, the following calculations should be performed:
A)
120 x 0.5 = 60 300 x 0.5 = 150 200 x 0.5 = 100
B)
50 x 1.1 = 55 120 x 0.45 = 54 300 x 0.55 = 165
C)
200 x 0.55 = 110 200 x 0.45 = 90
Therefore, A) the total production of Malaysia would be 60 tons of rice and 150 ft3 of lumber, and the total production of Canada would be 100 tons of rice and 100 ft3 of lumber; B) the production of rice would fall by 6 tons and the production of lumber would rise by 15 ft3; and C) Canada's lumber production would fall by 10 ft3.
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Apart from a subsidy, how might a government change the market price of a good?
Answer:
Governments can tax the public and giving the money to an industry, or tariffs, adding taxes to foreign products to lift prices and make domestic products more appealing. Higher taxes, fees, and greater regulations can stymie businesses or entire industries.
One of the important decisions managers have to make is whether to buy and commit to upgrading its computer equipment every couple of years. One way of avoiding having to buy costly upgrades, which can quickly become obsolete, is to use:
One way of avoiding having to buy costly software upgrades, which can quickly become obsolete (out-dated), is to use: Application service provider.
A software can be defined as a set of executable instructions (codes) or collection of sequential data that is typically used to instruct a computer on how to perform a specific task and solve a particular problem.
Generally, a software should be upgraded to its latest version when made available by the software developer.
Hence, an important decision managers have to make is whether to buy a computer equipment and become committed to upgrading it every couple of years or from time to time.
An effective way of avoiding having to buy costly computer upgrades, which can quickly become obsolete (out-dated), is to use an application service provider (ASP).
An application service provider (ASP) is a business firm or company that is saddled with the responsibility of providing computer-based services to its customers (individuals or enterprises) over a network.
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A business owner makes 60 items by hand in 45 hours. She could have earned $35 an hour working for someone else. Her total explicit costs are $225. If each item she makes sells for $18, her economic profit equals:
$-720 is her economic profit equals. A business owner makes 60 items by hand in 45 hours. She could have earned $35 an hour working for someone else. Her total explicit costs are $225.
What is economic profit equals?Economic profit is equal to total revenue less total costs, which include both explicit and implicit costs. Economists use the term "zero economic" to indicate that a company has no economic profit when its total costs and total revenues are equal.
When a business is competitive and generates enough income to cover its costs, it may often declare a zero economic profit. Economic profit is calculated as revenues minus explicit costs minus opportunity costs.
In this equation, leaving out the opportunity costs only results in the accounting profit; however, leaving out the opportunity costs can also be used as a stand-in for assessing other strategies.
Thus, it is $-720.
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Richard's Sporting Goods reports net income of $100,000, net sales of $500,000, and average assets of $1,000,000. The return on assets is:
Based on the information given the return on assets is: 0.1 times.
Using this formula
Return on assets=Net income/Average assets
Where:
Net income=$100,000
Average assets=$1,000,000
Let plug in the formula
Return on assets=$100,000/$1,000,000
Return on assets=0.1 times
Inconclusion the return on assets is: 0.1 times.
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a. Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 4.5% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method. b. Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $12,000 credit. c. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $1,000 debit.
Based on the information give the estimated balance of the allowance for doubtful accounts is $25,650.
a. Estimated allowance for doubtful accounts
Estimated allowance for doubtful accounts =$570,000×4.5%
Estimated allowance for doubtful accounts =$25,650
b. Adjusting journal entry
Dec 31
Debit Bad debt expense $13,650
($25,650-$12,000)
Credit Allowance for doubtful accounts $13,650
(To record bad debts expense)
c. Adjusting journal entry
Dec 31
Debit Bad debt expense $26,650
($25,650+$1,000)
Credit Allowance for doubtful accounts $26,650
(To record bad debts expense )
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Black Diamond Company produces snowboards. Each snowboard requires 2 pounds of carbon fiber. Management reports that 5,000 snowboards and 6,000 pounds of carbon fiber are in inventory at the beginning of the third quarter, and that 150,000 snowboards are budgeted to be sold during the third quarter. Management wants to end the third quarter with 3,500 snowboards and 4,000 pounds of carbon fiber in inventory. Carbon fiber costs $15 per pound. Each snowboard requires 0.5 hour of direct labor at $20 per hour. Variable overhead is budgeted at the rate of $8 per direct labor hour. The company budgets fixed overhead of $1,782,000 for the quarter. Required: 1. Prepare the production budget for the third quarter. Hint: Desired ending inventory units are given.
1.Based on the information given the production budget for the third quarter is 148,500.
2. Budgeted cost of direct material purchases is 4,425,000.
3. Budgeted Direct labor cost is $1,485,000.
4. Total factory overhead is $2,376,000.
1. Budgeted production
BLACK DIAMOND COMPANY
Production Budget (in units) Third Quarter
Budgeted units sales 150,000
Add: Budgeted ending inventory 3,500
Less: Budgeted beginning inventory (5,000)
Budgeted production 148,500
2. Direct material budget
BLACK DIAMOND COMPANY
Direct Materials Budget Third Quarter
Budgeted production 148,500 units
Materials requirement per unit 2
Materials needed for production 297,000
(148,500units×2)
Budgeted ending inventory 4,000
Total material requirements(lbs.) 301,000
(297,000+4,000)
Budgeted beginning inventory 6000
Direct Materials to be purchased (lbs.) 295,000
(301,000-6,000)
Materials price per pound 15.00per
Budgeted cost of direct material purchases 4,425,000
(295,000×15 per)
3. Direct labor budget
BLACK DIAMOND COMPANY
Direct labor Budget Third Quarter
Budgeted Production 148,500
Budgeted Direct labor hours 74,250
(148,500×0.5)
Budgeted Direct labor cost $1,485,000
(74,250×$20)
4. Factory overhead budget
BLACK DIAMOND COMPANY
Factory Overhead Budget Third Quarter
Variable overhead $594,000
(74,250×$8)
Add Fixed overhead $1,782,000
Total factory overhead $2,376,000
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