Answer:
See below
Explanation:
Given that ;
Beginning raw materials inventory
= $5,100
Indirect materials cost = $1,100
Indirect labor cost = $4,100
Maintenance of factory equipment = $1,900
Direct labor cost = $6,100
Factory overhead = Indirect materials + indirect labor + maintenance of factory equipment
Factory overhead = $1,100 + $4,100 + $1,900
Factory overhead = $7,100
The financial statements of New World, Incorporated, provide the following information for the current year: December 31 January 1 Accounts receivable $ 287,000 $ 381,500 Inventory $ 280,000 $ 266,000 Prepaid expenses $ 72,800 $ 70,000 Accounts payable (for merchandise) $ 258,300 $ 249,550 Accrued expenses payable $ 66,150 $ 79,450 Net sales $ 3,167,500 Cost of goods sold $ 1,669,500 Operating expenses (including depreciation of $63,000) $ 381,500 What is the amount of cash received from customers during the current yea
On April 1, 2021, Shoemaker Corporation realizes that one of its main suppliers is having difficulty meeting delivery schedules, which is hurting Shoemaker's business. The supplier explains that it has a temporary lack of funds that is slowing its production cycle. Shoemaker agrees to lend $420,000 to its supplier using a 12-month, 12% note.
Required:
1. The loan of $420,000 and acceptance of the note receivable on April 1, 2021
2. The adjustment for accrued interest on December 31, 2021
3. Cash collection of the note and interest on April 1, 2022.
Record the above transactions for Shoemaker Corporation.
Answer:
1.
April 1, 2021
Note Receivable $420000 Dr
Cash $420000 Cr
2.
December 31, 2021
Interest Receivable $37800 Dr
Interest Revenue $37800 Cr
3.
March 31, 2022
Interest Receivable $12600 Dr
Interest Revenue $12600 Cr
April 1, 2022
Cash $470400 Dr
Note Receivable $420000 Cr
Interest Receivable $50400 Cr
Explanation:
1.
The issuance of notes creates an asset in the books of Shoemaker and the note receivable is debited by the amount of the loan. In exchange, cash is paid out as loan and thus it is credited.
2.
Following accrual principle, the interest revenue related to year 2021, is recorded on 31 December 2021 and a receivable is created against it as the interest revenue has not been received on 31 December 2021. The amount of interest revenue will be,
Interest Revenue - 31 December 2021 = 420000 * 12% * 9/12 = $37800
The loan was issued on 1 April and 9 months interest has been earned till 31 December 2021.
3.
On 30 March 2022, the remaining three months interest revenue will be recorded against a receivable. The amount will be ,
Interest Revenue - March 2022 = 420000 * 12% * 3/12 = $12600
On 1 April, cash will be received for 420000 Principal and 50400 (37800 + 12600) (37800 + 12600 interest and it will be recorded as debit to cash for 470400 and credit to notes receivable for 420000 and interest receivable to 50400.
Relevance has always been the challenge of the advertising industry. Summarize Kristi Roger's assessment of the advertising industry in her Ted Talk. Considering her hypothesis and results, what are some implications for marketing managers as they seek to improve the ROI of marketing expenditures on all forms of marketing communications
Answer:
Advertising is a paid sort of promotion utilized by organizations for product promotion, hence being of a vital usage and a significant part in organizations. The achievement of any firm is reliant on the correct sort of advertising channels utilized.
Explanation:
In her Ted talk, it is clear Kristi Roger had conducted an extraordinary advertising analysis, in this way contending that relevance is a fundamental factor assuming an enormous part in advertising. She contends that the planned message of promotion should contact the perfect person at the perfect time. To guarantee this assertion is accomplished, an advertiser has the obligation to utilize the correct technology undeniably to make a pertinent directive for the correct crowd.
In addition, marketing managers are obligated to recognize the significant challenges in the market. They ought to get updated changes occurring in the market to stay away from any significant impacts on the Return On Investment (ROI).
To profit more from advertising, marketing managers should recruit the ideal person who is acceptable in quantitative skills rather than creative skills in light of the fact that the market analysis is of more significance than benefiting creative products into the market. A person with extraordinary quantitative skills can examine the market situations appropriately, henceforth s/he can dispose of a portion of the cycles that occur in computerized crusade improvement. To carry extraordinary outcomes to the organization, quantitative specialists guarantee important advertisements contact the perfect person at the perfect time.
Dwyer Company reported the following results for the year ended December 31, 2007, its first year of operations: 2007 Income (per books before income taxes) $ 1,500,000 Taxable income 2,400,000 The disparity between book income and taxable income is attributable to a temporary difference which will reverse in 2008. What should Dwyer record as a net deferred tax asset or liability for the year ended December 31, 2007, assuming that the enacted tax rates in effect are 40% in 2007 and 35% in 2008?
Answer: $315,000 deferred tax asset
Explanation:
The amount that Dwyer should record as a net deferred tax asset or liability for the year ended December 31, 2007 will be calculated thus:
= ($2400000 – $1500000) × 35%
= $900000 × 35%
= $900000 × 35/100
= $900000 × 0.35
= $315000.
Therefore, the answer is $315,000 deferred tax asset
Identify which of the following statements are true for the corporate form of organization.
a. Shareholders are not personally liable for corporate acts.
b. The sale of shares from one stockholder to another does not impact operations.
c. An exception is when it changes the makeup or directors It has many of the same rights as an individual it does not end with the death of an owner.
d. Corporations are often subject to fewer regulations than partnerships
e. Stockholders are expected to hire and fire key executives.
f. The president and vice presidents choose the board of directors.
Answer:
?
Explanation:
The statements are true for the corporate form of organization is-
Shareholders are not personally liable for corporate acts.An exception is when it changes the makeup or directors It has many of the same rights as an individual it does not end with the death of an owner.The sale of shares from one stockholder to another does not impact operations.Corporations are often subject to fewer regulations than partnerships.Stockholders are expected to hire and fire key executives.What is the Importance of a corporate form of organization?A corporation protects its owners' personal assets from liabilities and improved opportunities for financial resources, expert management, continuity, and the ability to continue operating in the event of a death.
In comparison to partnerships, corporations frequently face fewer restrictions. Key executives should be hired and fired by stockholders. Corporate actions are not personally accountable to shareholders so their personal assets are protected.
Learn more about the corporate form of organization, here:
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how can a writer be grief when writing professional letters
A. By adding a writer be brief when writing professional letters
B. By adding background information
C. By avoiding words that end in " Ize or ton"
D. By writing a concise letters that addresses your purpose
Answer:
D. By writing a concise letters that addresses your purpose
Explanation:
Got it right.
Selling Something People Could Get for FREE". Is it possible? Comment with example.
Answer:
yes its possible. You could sell dirt
ABC Corporation is considering dropping product D14E. Data from the company's accounting system appear below: Sales $ 660,000 Variable expenses $ 285,000 Fixed manufacturing expenses $ 244,000 Fixed selling and administrative expenses $ 192,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $195,500 of the fixed manufacturing expenses and $110,500 of the fixed selling and administrative expenses are avoidable if product D14E is discontinued. Required: a. According to the company's accounting system, what is the net operating income earned by product D14E
Answer: $61000 Loss
Explanation:
The net operating income earned by product D14E will be calculated as:
Sales : $660,000
Less: Variable expenses : $285,000
Less: Fixed manufacturing expenses : $244,000
Less: Fixed selling and distribution expenses : $192,000
Net operating income = -$61000
A company has two options for manufacturing boots. The manual process has monthly fixed costs of $26,380 and variable costs of $5.16 per pair of boots and an automated process with fixed costs of $52,239 per month and variable costs of $2.09 per pair of boots. They expect to sell each pair of boots for $99. What is the monthly break-even quantity (number of units) for the manual process
Answer:
Break-even point for the manual process= 281.11 unit
Explanation:
Break-even point is the level of activity at which a firm must operate such that its total revenue will equal its total costs. At this point, the company makes no profit or loss because the total contribution exactly equals the total fixed costs.
Break even point in units is calculated using this formula:
Break even point in units = Total general fixed cost/ (selling price - Variable cost)
Break-even point for the manual process:
Break-even point in units = $26,380/(99- 5.16) = 281.11 units
Break-even point for the manual process= 281.11 units
outlinr the selection procedure as a huma resource activity
Answer and Explanation:
A selection process as a human resources activity must be outlined, starting with the filling out of a form by the candidates for the vacancy that they are being offered through the selection. This form must contain basic information that will allow the human resources department to select people who have the minimum requirements necessary to participate in the next phase of the process. The next phase should be an interview, to get to know the candidates, assess their communication skills and ask incisive questions about the skills they have and the level of interest in the vacancy they are competing for. This is the key moment in the process, where the human resources department will be able to determine who deserves to be selected.
All of the following are cash and cash equivalents, EXCEPT *
Savings deposit
Money maker placement
Cash to be paid by a debtor
Currency that is legal tender
Answer:
money maker placements
Diversity in top teams can lead to which of the following? Check all that apply.
Available options are:
A. upper echelon team Confusion about group processes
B. Improved organizational performance
C. Increased probabilities of groupthink in the team
D. Complexity in group processes
Answer:
Improved organizational performance
Increased probabilities of groupthink in the team
Explanation:
Diversity in business or management means that all the company's employees' ideas and backgrounds are welcomed or encompassed to achieve the company's goals and improve the company's success.
Hence, in this case, Diversity in top teams can lead to
1. Improved organizational performance
2. Increased probabilities of groupthink in the team
A mother notices that when she divides brownies equally between her two children and gives each child her share on a separate plate, the brownies last a long time. But when she gives her children a plate to share, the brownies are gone pretty quickly. The mother concludes from this that brownies given on a single plate are:_______.
A) excludable but they might either be rival or nonrival.
B) nonexcludable and nonrival.
C) excludable and rival.
D) excludable and nonrival.
E) nonexcludable and rival.
Answer:
E
Explanation:
I think this because if the children had'nt rivaled over the brownies, they would've lasted longer.
Diamond Company manufactures two models of cassette recorders: VCH and MTV. Based on the following production data for April, prepare a production budget.
VCH MTV
Estimated inventory (units), April 1 2,900 4,000
Desired inventory (units), April 30 6,900 5,250
Expected sales volume (units):
Eastern zone 12,500 12,960
Midwest zone 19,000 19,800
Western zone 14,500 9,840
Answer and Explanation:
The preparation of the production budget is presented below:
Particulars VCH MTV
Expected Sales:
Eastern zone 12500 12960
Midwest zone 19000 19800
Western zone 14500 9840
Add: Desired inventory 6900 5250
Less: Opening inventory (2900) (4000)
Production in units 50,000 43,850
Colonnade Corporation purchased a machine for use in the firm's manufacturing process. The original cost of the machine was $1,800,000. The machine has a class life of 15 years, but after 13 years, the firm has decided to sell the machine for $320,000. If Colonnade has a marginal tax rate of 34%, what is the tax effect associated with the decision
Answer: $27,200
Explanation:
Machine depreciation:
There is no salvage value so depreciation is:
= 1,800,000 / 15
= $120,000
Gain on the machine when sold was:
= Selling price - Book Value of asset
= Selling price - (Cost price - Accumulated depreciation for 13 years)
= 320,000 - (1,800,000 - (120,000 * 13))
= $80,000
Tax on gain:
= 80,000 * 34%
= $27,200
uestion 31 Oriole Company has the following inventory data: July 1 Beginning inventory 114 units at $19 $2166 7 Purchases 399 units at $20 7980 22 Purchases 57 units at $22 1254 $11400 A physical count of merchandise inventory on July 30 reveals that there are 190 units on hand. Using the LIFO inventory method, the amount allocated to cost of goods sold for July is $3686. $3914. $7486. $7714.
Answer:
$7,714
Explanation:
The computation of the cost of good sold under LIFO method is shown below
But before that following calculations need to be done
Goods sold = Beginning inventory + Purchases - Ending inventory
= 114 + (399 + 57) - 190
= 380 units
Now 380 units sold would include 57 units of July 22 purchases and balance i.e. (380-57) 323 units of July 7 purchases
So, cost of goods sold
= (57 × 22) + (323 ×20)
= $7,714
The major benefits to a S.W.O.T Analysis are: a. Simple to use. b. Reduces the costs of strategic planning. c. Flexible. d. Integrates and synthesizes diverse information. e. Fosters collaboration among managers of different functional areas. f. ALL OF THE ABOVE. g. NONE OF THE ABOVE.
Answer:
f. ALL OF THE ABOVE
Explanation:
SWOT analysis can be regarded as
strategic planning technique that is been utilized to identify opportunities,
strengths as well as weaknesses, and threats associated with business competition as well as project planning of individuals or organization.
The major benefits to a S.W.O.T Analysis includes
✓Reduces the costs of strategic planning.
✓Simple to use.
✓Flexible
✓Fosters collaboration among managers of different functional areas.
✓Integrates and synthesizes diverse information.
Harlen Company is involved in a competitive bidding situation. The following costs are anticipated for a project to be bid with the City of Crimson:
Direct material $340,000
Direct labor 610,000
Allocated variable overhead 420,000
Allocated fixed cost 110,000
Which of the following cost figures should be used in setting a minimum bid price if Harlen has excess capacity?
A. $530,000.
B. $950,000.
C. $1,370,000.
D. $1,480,000.
E. None of the answers is correct.
Answer:
C. $1,370,000
Explanation:
Calculation to determine the cost figures that should be used in setting a minimum bid price if Harlen has excess capacity
Direct material $340,000
Direct labor $610,000
Allocated variable overhead $420,000
Minimum bid price $1,370,000
($340,000+$610,000+$420,000)
Therefore the cost figures that should be used in setting a minimum bid price if Harlen has excess capacity is $1,370,000
Peter and Lois are planning to open a restaurant that will feature Lois's world-renowned meatloaf. Everyone who has tasted Lois's meatloaf has ranted and raved that it is the most delectable meal they have ever had. Luckily for Peter and Lois, the meatloaf is made using a secret recipe that no one else in the whole world knows about. The only detail of the plan that troubles them is that neither of them knows anything about running a business. In S.W.O.T. Analysis, Lois's secret meatloaf recipe is a _____ and the couple's ignorance about running a business is a _____ in their situation analysis.
Answer:
Peter and Lois Restaurant
In S.W.O.T. Analysis, Lois's secret meatloaf recipe is a _strength____ and the couple's ignorance about running a business is a __weakness___ in their situation analysis.
Explanation:
SWOT means Strengths, Weaknesses, Opportunities, and Threats. Strengths and Weaknesses refer to internal capabilities or resources that are available or lacking. Opportunities and Threats refer to external returns and risks that can elevate or threaten the achievement of business goals.
List three pieces of criteria that economists use to determine if someone is employed
Answer:
The summary as per the given query is summarized below.
Explanation:
The criterion used by economists to decide whether the individual was working wasn’t employed.Employees hold down jobs for full as well as part-time pay where they already haven't a job and therefore are provisions of these terms for work even though they are unemployed.The labor force seems to be the number among all jobs working as well as unemployment.If you owned a trade secret, what methods would you employ to protect it?
Answer:
You would restrict access to the information,advise new employees and you would have an agreement with employees abd business partners.
Determining Amounts to be Paid on Invoices Determine the amount to be paid in full settlement of each of the following invoices, assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period. Merchandise Freight Paid by Seller Terms Returns and Allowances a. $14,200 - FOB shipping point, 1/10, n/30 $700 b. 10,700 $400 FOB shipping point, 2/10, n/30 1,300 c. 5,700 - FOB destination, 1/10, n/30 500 d. 3,800 200 FOB shipping point, 2/10, n/30 500 e. 1,500 - FOB destination, 2/10, n/30 -
Answer:
a. Amounts to be Paid on Invoice = $12,150
b. Amounts to be Paid on Invoice = $7,920
c. Amounts to be Paid on Invoice = $4,680
d. Amounts to be Paid on Invoice = $2,840
e. Amounts to be Paid on Invoice = $1,200
Explanation:
a. $14,200 - FOB shipping point, 1/10, n/30 $700
Amounts to be Paid on Invoice = ($14,200 - $700) * (10/10 - 1/10) = $12,150
b. 10,700 $400 FOB shipping point, 2/10, n/30 1,300
Amounts to be Paid on Invoice = (($10,700 - $1,300) * (10/10 - 2/10)) + $400 = $7,920
c. 5,700 - FOB destination, 1/10, n/30 500
Amounts to be Paid on Invoice = ($5,700 - $500) * (10/10 - 1/10) = $4,680
d. 3,800 200 FOB shipping point, 2/10, n/30 500
Amounts to be Paid on Invoice = (($3,800 - $500) * (10/10 - 2/10)) + $200 = $2,840
e. 1,500 - FOB destination, 2/10, n/30 -
Amounts to be Paid on Invoice = $1,500 * (10/10 - 2/10) = $1,200
Riverview Company's budget for the coming year includes $7,000,000 for manufacturing overhead, 40,000 hours of direct labor, and 200,000 hours of machine time. If Riverview applies overhead using a predetermined rate based on machine-hours, what amount of overhead will be assigned to a unit of output which requires 0.4 machine hours and 0.30 labor hours to complete
Answer:
$70
Explanation:
With regards to the above, we need to compute first the overhead application rate.
Overhead application rate = Budgeted overhead / Budgeted activity/Budgeted machine hour
= $7,000,000 / 40,000 labor hours
= $175
Overhead application rate = $175 per direct labor hour
Assigned overhead = Overhead application rate × Number of machine hours consumed
= $175 × 0.4
= $70
Suppose that applying for membership in the European Monetary Union (EMU) is expensive, so three hypothetical countries, Baltia, Polsha, and Atlantida, have come to you with their relevant data and want advice on if they should apply to join the EMU. Suppose that the average inflation rate of the three European countries with the lowest inflation rates is 3.0%, and the average long-term interest rate of those countries is 3.2%.
Evaluate the characteristics of Baltia, Polsha, and Atlantida presented in the following table using the Maastricht convergence criteria. Then, complete the bottom row by identifying whether each country is eligible to become an EMU member.
Criteria Baltia Polsha Atlantida
Inflation 4.5% 4.0% 4.1%
Long-term interest rates 5.0% 4.0% 3.0%
Exchange rates Last devaluated three years ago Stable Stable
Budget deficit 2.4% of GDP 3% of GDP 2.1% of GDP
Debt outstanding 45% of GDP 45% of GDP 46% of GDP
Qualifies to enter the EMU ? ? ?
Answer:
European Monetary Union Membership
All three countries are eligible to enter into the European Monetary Union, having met all the Maastricht convergence criteria.
Note that Baltia devalued its currency in the last three years and not two as set by the exchange rate criterion.
Explanation:
a) Maastricht convergence criteria are:
1. Price stability: the inflation rate not more than 1.5 point of average best three.
2. Deficit not more than 3% of GDP.
3. Government debt must not exceed 60% of GDP.
4. Exchange rate: No currency devaluation in last two years.
5. Long-term interest rates: not more than 2% higher than those of the three best performing Member states in terms of price stability.
b) The Maastricht Convergence Criteria Performances:
Criteria Baltia Polsha Atlantida
Inflation 4.5% 4.0% 4.1%
Long-term interest rates 5.0% 4.0% 3.0%
Exchange rates Last devalued Stable Stable
3 years ago
Budget deficit 2.4% of GDP 3% of GDP 2.1% of GDP
Debt outstanding 45% of GDP 45% of GDP 46% of GDP
Qualifies to enter
the EMU ? ? ?
c) The Maastricht Convergence Criteria Matching:
Criteria Baltia Polsha Atlantida Decision
Inflation 4.5% 4.0% 4.1%
Lowest EU inflation rates 3.0% 3.0% 3.0%
Difference 1.5 1.0 1.1 Met
Maastricht criteria 1.5 1.5 1.5
Long-term interest rates 5.0% 4.0% 3.0%
Highest EU rates 3.2% 3.2% 3.2%
Difference 1.8 0.8 -0.2 Met
Maastricht criteria 2% 2% 2%
Exchange rates Last devalued Stable Stable Met
3 years ago
Budget deficit 2.4% of GDP 3% of GDP 2.1% of GDP
Maastricht criteria 3% of GDP 3% of GDP 3% of GDP Met
Debt outstanding 45% of GDP 45% of GDP 46% of GDP
Maastricht criteria 60% of GDP 60% of GDP 60% of GDP Met
Qualifies to enter
the EMU YES YES YES
Using these data from the comparative balance sheet of Rollaird Company, perform horizontal analysis.
December 31, 2020 December 31, 2019
Accounts receivable $524,000 $400,000
Inventory 868,000 620,000
Total assets 3,018,600 2,580,000
Increase or (Decrease)
December 31, 2020 December 31, 2019 Amount Percentage
Accounts receivable $524,000 $400,000 $ %
Inventory 868,000 620,000 $ %
Total assets 3,018,600 2,580,000 $ %
Answer:
Increase
2020 - 2019 Amount Percentage
Accounts receivable 524,000 400,000 $124,000 31%
Inventory 868,000 620,000 $248,000 40%
Total Assets 3,018,600 2,580,000 $438,600 17%
Percentage increase:
Accounts receivable = 124,000 / 400,000 = 31%
Inventory = 248,000 / 620,000 = 40%
Total Assets = 438,600 / 2,580,000 = 17%
Three major transportation segments and a major company within each segment are as follows:
Segment Company Motor carriers YRC Worldwide Inc. (YRCW) Railroads Union Pacific Corporation (UNP) Transportation Arrangement C.H. Robinson Worldwide Inc. (CHRW) YRC Worldwide Union Pacific C.H. Robinson Worldwide Sales $4,832 $21,813 $13,470 Average long-term operating assets 1,016 47,569 1,092
a. Determine the asset turnover for all three companies. Round to two decimal places.
YRC Worldwide ________
Union Pacific _______
C.H. Robinson Worldwide ______
b. Based on your calculations above which of the following statements are correct.
Answer:
Segment Company Motor
a) The asset turnover ratios for all three companies. Round to two decimal places are:
YRC Worldwide ___4.76_____
Union Pacific ___0.46____
C.H. Robinson Worldwide __12.34____
b) Based on the Asset Turnover Ratio computed above, Transportation Arrangement is the most efficient. It outperformed YRC Worldwide and Union Pacific Corporation in deploying assets to generate revenue. The performance of Union Pacific Corporation in comparison is very abysmal.
Explanation:
a) Data and Calculations:
YRC Worldwide Railroads Union Transportation
Inc. (YRCW) Pacific Corporation Arrangement C.H.
(UNP)
Sales $4,832 $21,813 $13,470
Average long-term
operating assets 1,016 47,569 1,092
Asset turnover = Sales/Average operating assets
= 4.76 0.46 12.34
Complete the journal entries for the following financing transactions.
a. A farmer deposits $350 from a garage sale of personal items into the farm checking account.
b. A farmer pays $100 for groceries with the farm checking account utilities of $65 for the farmer's house is paid with a check from the farm checking account.
c. A farmer culls his cow herd and sells the cows for $3,000 A farmer builds a shed for $7,000
Answer:
The answer is
Explanation:
The answer is ___, because
Kim works for a clothing manufacturer as a dress designer. During 2020, she travels to New York City to attend five days of fashion shows and then spends three days sightseeing. Her expenses are as follows:
Airfare $1,800
Lodging (8 nights) 2,340
Meals (8 days) 2,160
Airport transportation 115
Assume lodging/meals are the same amount for the business and personal portion of the trip ($293 per day for lodging and $270 per day for meals).
Required:
a. Presuming no reimbursement, how much can kim deduct as to the trip?
b. Would the tax treatment of Kim's deduction differ if she was an independent contractor (rather than an employee)? Explain.
Answer: See explanation
Explanation:
a. Presuming no reimbursement, how much can kim deduct as to the trip?
Airfare = $1,800
Add: Lodging = $2340 × 5/8 = $1462.50
Add: Meals = $2160 × 5/8 × 50% = $675
Add: Airport transportation = $115
Total deduction = $4052.50
b. Would the tax treatment of Kim's deduction differ if she was an independent contractor (rather than an employee)? Explain
The tax treatment of Kim's deduction if she was an independent contractor will be:
Airfare = $1,800
Add: Lodging = $2340 × 5/8 = $1462.50
Add: Meals = $2160 × 5/8 × 50% = $675
Add: Airport transportation = $115
Total deduction = $4052.50
Therefore, the tax treatment of Kim's deduction still remains the same.
The financial information for Pear Company is provided below: Sales $2.8 million Cost of goods sold $2.3 million Purchases $2.1 million Average receivables $0.6 million Average inventory $0.5 million Average payables $0.2 million The company's cash conversion cycle is closest to: (Choose the closest one.) Select one: A. 122 days B. 192 days C. 129 days D. 114 days
Answer:
A. 122 days
Explanation:
The computation of the cash conversion cycle is shown below:
= DAys sales outstanding + days inventory outstanding - days payable outstanding
where
Days sales outstanding is
= 365 ÷ $2.8 ÷ $0.6
= 78.16 days
The days inventory oustandings is
= 365 ÷ $2.3 ÷ $0.5
= 79.35 days
And, the days payable outstanding is
= 365 ÷ $2.1 ÷ $0.2
= 34.76 days
Now the cash conversion cycle is
= 78.16 days + 79.35 days - 34.76 days
= 122.75 days
= 122 days
1. Explain the concept of opportunity cost with an appropriate example.
Answer:
Concept & example of Opportunity Cost
Explanation:
Opportunity Cost is the cost of next best alternative foregone, while choosing an alternative. This arises because of 'choice' problem, due to unlimited wants & limited resources - having alternative uses.
Eg : If I can have 2 chapatis or a bowl of rice. And, I eat a bowl of rice. Then, 'opportunity cost' of a rice bowl is - the next best available '2 chapattis' foregone for the former.