Answer:
a. 1. You would want the regulatory boards to see more competition, so you would argue that the relevant market is all toys, which is as broad as possible. This would make it less likely that the merger would violate merger guidelines.
b. 2. You would want to use the narrowest definition of the market, which would be dolls. This would make it more likely that the merger would violate merger guidelines.
Explanation:
a. In order to avoid anti-trust laws, it would be best that Mattel convinces the authorities that the relevant category is all toys not just a subsection. This will show that the toys made by the new company would have a lot of competition from other toy makers across the board which would reduce their chances of being a monopoly and violate merger guidelines.
b. As the bid is unsolicited, Hasbro might want to defend against it. In which case their strategy should be the exact opposite of that of Mattel and they should try to convince the regulatory boards that they would be in the narrowest of markets which would be dolls. This would mean that the merger has a strong chance of leading to a monopoly and would violate merger guidelines.
Gene Simmons Company uses normal costing in each of its three manufacturing departments. Factory overhead is applied to production on the basis of machine hours in Department A, direct labor cost in Department B, and direct labor hours in Department C. The following annual, budgeted data is available for the year:
first column is dept a then b then c going left to right
Factory Overhead $380,000 $420,000 $510,000
Direct Labor Cost $480,000 $600,000 $600,000
Direct Labor Hours 40,000 18,000 25,000
Machine Hours 95,000 70,000 35,000
The following actual information is available for January of the current year for each department: first column is dept a then b then c going left to right
Direct Materials Used $31,700 $57,600 $44,600
Direct Labor Cost $28,125 $53,000 $50,400
Factory Overhead $35,640 $36,040 $38,220
Direct Labor Hours Used 1,250 2,300 2,100
Machine Hours Used 8,100 1,440 1,280
REQUIRED:
A. Assume that Gene Simmons Company uses actual costing.
1. Compute the actual overhead rate for January for each department. Dept A Dept B Dept C
2. If one of the units produced in Department A used 650 machine hours, how much overhead cost would be applied to that unit?
3. What two disadvantages are associated with actual costing?
Assume that Gene Simmons Company uses normal costing.
1. How does normal costing "solve" the two problems associated with actual costing?
2. Compute the pre-determined annual overhead rate for the current year for each department. Dept A Dept B Dept C
3. Compute the manufacturing overhead applied in January in each department. Dept A Dept B Dept C
4. Compute under- or over-applied overhead at the end of January in each department. Dept A Over or Under (circle one) Dept B Over or Under (circle one) Dept C Over or Under (circle one)
5. On January 31, how will the balances of the Factory Overhead accounts be reported on the financial statements?
6. On December 31 (the end of the year), how will the balances of the Factory Overhead accounts be reported on the financial statements?
Answer:
Required A
Part 1
Actual overhead rate = Actual Overheads ÷ Actual hours used
Therefore,
Dep A = $35,640 ÷ 8,100 = $4.40
Dep B = $36,040 ÷ 1,440 = $25.03
Dep C = $38,220 ÷ 1,280 = $29.86
Part 2
Overheads applied = Overhead rate × hours used
Therefore,
Overheads applied = $4.40 × 650 hours = $2,860
Part 3
1. Actual costing delays product costing as the information is only available after the period.
2. Difficult to deal with for fluctuating or seasonal sales as new rates always need to be calculated.
Required B
Part 1
1. Product Costing can be done on time hence price setting can also be done at an earlier stage.
2. Rates are determined consistently for fluctuating or seasonal sales
Part 2
Predetermined overhead rate = Budgeted Overheads ÷ Budgeted hours
Therefore,
Dep A = $380,000 ÷ 95,000 = $4.00
Dep B = $420,000 ÷ 70,000 = $6.00
Dep C = $510,000 ÷ 35,000 = $14.57
Part 3
Overheads applied = Predetermined overhead rate × hours used
Therefore,
Overheads applied for January,
Department A = $4.00 × 8,100 hours = $32,400
Department B = $6.00 × 1,440 hours = $8,640
Department C = $14.57 × 1,280 hours = $18,649.60
Part 4
If Actual Overheads > Applied Overheads, we say overheads are under-applied,
and
If Applied Overheads > Actual Overheads, we say overheads are over-applied.
Therefore,
Department A :
Actual Overheads = $35,640
Applied Overheads = $32,400
Therefore, overheads are under-applied by $3,240
Department B :
Actual Overheads = $36,040
Applied Overheads = $8,640
Therefore, overheads are under-applied by $27,400
Department C :
Actual Overheads = $38,220
Applied Overheads = $18,649.60
Therefore, overheads are under-applied by $19,570.40
Part 5
Department A
Cost of Sales = $3,240
Department B
Cost of Sales = $27,400
Department C
Cost of Sales = $19,570.40
Part 6
Department A
Cost of Sales = $3,240
Department B
Cost of Sales = $27,400
Department C
Cost of Sales = $19,570.40
Explanations :
See the formulas and calculations tied together with the solution above.
Note that :
If Actual Overheads > Applied Overheads, we say overheads are under-applied,
and
If Applied Overheads > Actual Overheads, we say overheads are over-applied.
Also that ,
Balances in the Overheads Account are closed off against the Cost of Goods Sold in the Income Statement.
Diskind Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During October, the company budgeted for 6,700 units, but its actual level of activity was 6,650 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for October:
Data used in budgeting:
Fixed element
per month Variable element per unit
Revenue — $34.20
Direct labor $0 $6.20
Direct materials 0 13.80
Manufacturing overhead 37,000 1.70
Selling and administrative expenses 25,500 0.20
Total expenses
$62,500
$21.90
Actual results for October:
Revenue $228,900
Direct labor $41,130
Direct materials $93,235
Manufacturing overhead $43,500
Selling and administrative expenses $30,470
The direct materials in the flexible budget for October would be closest to:
A. $91,770
B. $93,965
C. $92,460
D. $93,055
Answer:
A. $91,770
Explanation:
The direct materials in the flexible budget for October:
Cost = Variable Cost + Fixed Cost
Variable Cost = Actual level of activity*Direct material Variable element per unit = 6,650 units * $13.80 = $91,770
Fixed Cost = $0
So, the direct materials in the flexible budget for October = $91,770 + 0 = $91,770.
On January 1, 2018, Legion Company sold $200,000 of 10% ten-year bonds. Interest is payable semiannually on June 30 and December 31. The bonds were sold for $177,000, priced to yield 12%. Legion records interest at the effective rate. Legion should report bond interest expense for the six months ended June 30, 2018, in the amount of:
Answer:
$10,620
Explanation:
Calculation for what Legion should report bond interest expense for the six months ended June 30, 2018,
Bond interest expense=(12%/2 semiannually*$177,000)
Bond interest expense=6% × $177,000
Bond interest expense=$10,620
Therefore Legion should report bond interest expense for the six months ended June 30, 2018, in the amount of:$10,620
Value added per employee is a financial measure of how much product was sold vs. how many employees worked during the
period. Is this statement true or false?
For each of the following transactions, identify it as a financial capital inflow or financial capital outflow in the United States Balance of Payments. Also, determine if the transaction is in the Current or Financial Account.
a. The U.S. exports cars to be sold in Canada.
b. Pepsi buys a factory in Mexico.
c. A Brazilian company buys an apartment building in Boston.
d. The central bank of China purchases a U.S. Treasury Bond.
f. A businessman is paid dividends on the stock from a foreign corporation that he owns.
Answer: See explanation
Explanation:
The balance of payment show tge transactions that occur between a country and another country.
a. The U.S. exports cars to be sold in Canada.
This is a financial capital inflow and the transaction is in the current account.
b. Pepsi buys a factory in Mexico.
This is a financial capital outflow and the transaction is in the financial account.
c. A Brazilian company buys an apartment building in Boston.
This is a financial capital inflow and the transaction is in the current account.
d. The central bank of China purchases a U.S. Treasury Bond.
This is a financial capital inflow and the transaction is in the financial account.
e. A businessman is paid dividends on the stock from a foreign corporation that he owns.
This is a financial capital inflow and the transaction is in the financial account.
Your coworker is creating the headings for a report. What advice should you give her?
Do not use first- and second-level headings.
Strive for parallel construction within heading levels.
Use headings as antecedents for pronouns.
Review the following report excerpt, and complete the sentence.
To: Tracy Smallman
From: Diane Martinez, Rene Guzman
Date: June 8, 2009
Subject: Online Certificate Program Status Report
The following status report provides an update on the progress of the Online Certificate Program. The report includes updates on the project outline, a summary of key findings, and an overall evaluation of the project to date.
Progress Update
Phase 1 (Development) is well underway, with research phase and discovery phase milestones completed. In the last month, we completed a course pilot and collected user feedback. Key findings have directed the development of new course offerings and guided the initial development of additional content for course modules to be launched next fall.
The heading "Progress Update" might be improved to read ________
To ensure formatting does not change, how should a report be sent?
As an Excel file
As a Word file
As a PDF file
As a Power Point file
Which of the following is best used for conveying complex information quickly and clearly?
Infographics
Slide decks
Templates
Written text
Which of the following are components of an effective report heading? Check all that apply.
It occurs no more often than every three pages in a report
It is grammatically equal to other headinggs in its level
It uses creative punctuation
It is short and clear
It has punctuation correctly applied
The heading "Progress Update" might be improved to read_______ "Currently accomplished tasks"
To ensure formatting does not change, how should a report Progress Update: Phase 1 accomplishments"
As an Excel file
Answer:
1. I will offer the following advice for creating effective reports:
a. Make use of appropriate heading levels
b. Use parallel construction
c. Use first- and second-level headings for short reports
d. Capitalize and underline headings carefully
e. Keep headings short and clear
f. Do not use headings as antecedents for pronouns, and
g. Include at least one heading per report page when appropriate.
2. The heading "Progress Update" might be improved to read ________
"Currently Accomplished Tasks"
3. To ensure formatting does not change, a report should be sent:
As a PDF file
4. To convey complex information quickly and clearly, the best is:
Infographics
5. Components of an effective report heading include:
It is short and clear
Explanation:
When writing informational reports, ensure that you emphasize the facts, using appropriate formats to convey them. But if it is an analytical report, the emphasis shifts to the reasoning process and the conclusion(s) to be drawn. Clear and short headings, including subheadings, are important in every report. They give reports more clarity and direction, guiding the reader appropriately.
Coronado Industries had the following accounts and balances:
Accounts payable $31400 Equipment $34900
Accounts receivable 4550 Land 34100
Buildings ? Unearned service revenue 10100
Cash 15250
Total stockholders' equity ?
If the balance of the Buildings account was $70200 and $5300 of Accounts Payable were paid in cash, what would be the balance of the total stockholders' equity?
Answer:
15250
Explanation:
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Answer:
1637
Explanation:
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Which of the following is/are inconsistent with the semi-strong form of the efficient market hypothesis? [I] Significant non-random price movements [II] Price overreaction to the public release of new information [III] Superior performance of professional traders [IV] Abnormal profits from illegal insider trading
A. I and III
B. II and IV
C. I and II
D. All are inconsistent with the semi-strong form of the EMH
Answer:
C. I and II
Explanation:
Semi strong form of efficient market hypothesis is a situation where stock prices adjust quickly to any new public information that circulates in the market. It assumes that stock prices incorporates the effect of all information which is publicly available in the market.
In a large metropolitan market, it is relatively easy to set up a law office. The ease of entry explains why you will find hundreds of lawyers listed in the New York City phone book. Each lawyer is a close substitute for another but with slight differences. Which of the following market structures best describes the one in which lawyers operate?
1) pure competition
2) perfect monopoly
3) monopolistic competition
4) oligopoly
5) none of the above
Answer:
1
Explanation:
A perfect competition is characterized by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.
In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.
Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.
In a perfect monopoly, there is only one firm operating in the industry
In a monopolistic competition, differentiated products are sold
In an oligopoly, there are few large firms
What is the Total expected equity financing for Amazon’s purchase of Walmart, at the assumed 50-50% equity and debt financing deal mix provided
Answer:
The correct solution is "$241,356".
Explanation:
The given values are:
Share price,
P0 = 140.50
Acquisition premium,
p = 20%
Diluted shares outstanding,
N = 2,863 MM
Now,
For Amazon, the purchase price every share will be:
⇒ [tex]P=P0\times (1 + p)[/tex]
On putting the values, we get
⇒ [tex]=140.50\times (1 + 20 \ percent)[/tex]
⇒ [tex]=168.60[/tex]
The purchase consideration will be:
= [tex]P\times N[/tex]
= [tex]168.60\times 2,863[/tex]
= [tex]482,702 \ MM[/tex]
So that,
The total equity financing expected will be:
= [tex]Purchase \ consideration\times Percentage \ of \ equity \ financing[/tex]
= [tex]482,702\times 50 \ percent[/tex]
= [tex]241,351 \ MM[/tex] ($)
Thus the above is the correct answer.
A___ Relationship would include your co-workers and friends.
Answer:
A colleague Relationship would include your co-workers and friends.
Categorizing U.S. taxes
Which of the following taxes are regressive?
a) A sales tax that adds 5% to the sale of all items
b) The U.S. payroll tax (a constant tax on wages up to a certain amount, after which the marginal tax rate is 0%) is a tax.
c) The U.S. income tax
Answer:
A
Explanation:
A regressive tax is a tax system where the same tax rate is applied uniformly. As a result, those earning less income are taxed higher than those earning more income.
Sales tax is an example of a regressive tax.
If sales tax is 5%. Worker A earns $100 and worker B earns $1000. Both buy a good worth $50 before tax. the sales tax is worth $2.5.
The tax comprises $2,5 / 100 = 2.5% of worker A's income and $2,5 / $1000 = 0.025% of Worker B's income.
It can be seen that worker A who earns less income is taxed higher
Warner Clothing is considering the introduction of a new baseball cap for sales by local vendors. The company has collected the following price and cost characteristics.
Sales price $15 per unit
Variable costs 5 per unit
Fixed costs 50,000 per month
Required:
a. What number must Warner sell per month to break even?
b. What number must Warner sell per month to make an operating profit of $34,000 and $8,400. Assume that the company plans to sell 9,000 units per month. Consider requirements (b), (c), and (d) independently of each other.
c. What will be the operating profit?
d. What is the impact on operating profit if the sales price decreases by 10 percent? Increases by 20 percent?
Answer:
a. 5,000 units
b. 8,400 units and 5,840 units
c. $40,000
d. decrease of operating profit by 22.50 % and increase of operating profit by 45.00%
Explanation:
Breakeven point is level at which a firm makes neither profit nor loss
Break even units = Fixed Costs ÷ Contribution per unit
Break even units = 5,000 units
Units to achieve target profit = Target Profit + Fixed Costs ÷ Contribution per unit
Units to achieve profit of $34,000 = 8,400 units
Units to achieve profit of $8,400 = 5,840 units
Operating Profit = Contribution - Fixed Costs
= $40,000
The effect on change of operating profit can be best shown by calculation of the Degree of Operating Leverage (DOL)
DOL = Contribution ÷ Profit
= 2.25
Sales decreases of 10 percent = decrease of operating profit by 22.50 % (10 % × 2.25)
Sales Increases of 20 percent = increase of operating profit by 45.00% (20%× 2.25)
Which of the following occupations would least likely to be
subjected to seasonal employment?
Select one:
a.
Easter Bunny.
b.
McDonald clown.
C.
Department store Santa Claus.
d.
Lifeguard.
= McDonald clown.
Answer:
McDonald Clown
Explanation:
B.
=MCDONALD
The situation in which expansionary fiscal policy does not lead to a rise in aggregate output is referred to as
Select one:
a. Fiscal neutrality.
b. Inflation.
c. Complete crowding out
d. A recession.
= Complete crowding out
Answer: The situation in which expansionary fiscal policy does not lead to a rise in aggregate output is referred to as
Select one:
a. Fiscal neutrality.
b. Inflation.
c. Complete crowding out
d. A recession.
Explanation:
The situation in which expansionary fiscal policy does not lead to a rise in aggregate output is referred to as complete crowding out.
What is fiscal policy?A fiscal policy refers to the use of government spending and policies for influencing economic conditions.
The situation in which expansionary fiscal policies do not lead to a rise in aggregate output is referred to as complete crowding out.
Therefore, C is the correct option.
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Give an example of one good or service produced in the United States using the command model. Justify your example using research (where did you find this).
Answer:
An example of production under the command system in the United States is that of the production of roads and passable roads throughout the nation. In this case, it is the production of a public service, and as such it is controlled by the government in all stages of its production: from the identification of the need, through the tender, the construction authorization and the supervision of the results, everything is controlled by the government. This implies that individuals or private companies cannot by their own initiative create this type of road, but rather depend exclusively on the will of the government.
Hamby Inc. has sales of $2,076,000 for the first quarter of 2020. In making the sales, the company incurred the following costs and expenses.
Variable Fixed
Cost of goods sold $779,000 $614,000
Selling expenses 96,700 63,500
Administrative expenses 81,600 70,800
Required:
Prepare a CVP income statement for the quarter ended March 31, 2017.
Answer:
Net income= $370,301
Explanation:
First, we need to calculate the total variable costs and the total fixed costs:
Total variable cost= 779,000 + 96,700 + 81,600
Total variable cost= $957,399
Total fixed cost= 614,000 + 63,500 + 70,800
Total fixed cost= $748,300
Now, we make the CVP income statement:
Sales= 2,076,000
Total variable cost= (957,399)
Total contribution margin= 1,118,601
Total fixed cost= (748,300)
Net income= $370,301
National Orthopedics Co. issued 9% bonds, dated January 1, with a face amount of $900,000 on January 1, 2018. The bonds mature on December 31, 2021 (4 years). For bonds of similar risk and maturity the market yield was 10%. Interest is paid semiannually on June 30 and December 31.
(FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the standard factor tables.)
Required:
1. Determine the price of the bonds at January 1, 2018.
2. Prepare the journal entry to record their issuance by National on January 1, 2018.
3. Prepare the journal entry to record interest on June 30, 2018.
4. Prepare the appropriate journal entries at maturity on December 31, 2021.
Table Values Based On:
n=
i=
Cash Flow Amount Present Value
Interest
Principal
Price of Bonds
Answer:
1. Determine the price of the bonds at January 1, 2018.
PV of face value = $900,000 / (1 + 5%)⁸ = $612,525
PV of coupon payments = $40,500 x 6.4632 (PV annuity factor, 5%, 8 periods) = $261,760
market price of bonds = $874,285
2. Prepare the journal entry to record their issuance by National on January 1, 2018.
January 1, 2018, bonds issued at a discount
Dr Cash 874,285
Dr Discount on bonds payable 25,715
Cr Bonds payable 900,000
3. Prepare the journal entry to record interest on June 30, 2018.
Dr Interest expense 43,714
Cr Cash 40,500
Cr Discount on bonds payable 3,214
4. Prepare the appropriate journal entries at maturity on December 31, 2021.
Dr Bonds payable 900,000
Dr Interest expense 43,714
Cr Cash 940,500
Cr Discount on bonds payable 3,214
Assume an investor purchases the net assets of an investee for the cash purchase price is $75,600. The investor is willing to purchase the investee's business for this amount because the fair value of PPE is $70,560 and the fair value of a (previously unrecognized) customer list is $15,120 (the fair values of all other assets and liabilities are equal to their book values). The investee company reports the following balance sheet on the acquisition date:
Cash $2,800 Accounts payable $5,600
Accounts receivable 5,600 Accrued liabilities 8,400
Inventories 11,200 -
Current assets 19,600 Current liabilities 14,000
Long-term liabilities 11,200
PPE, net 28,000 Stockholdersâ equity 22,400
Total assets $47,600 Total liabilities and equity $47,600
Required:
Provide the journal entry if the investor pays cash and purchases the assets and assumes the liabilities of the investee company (assume that the fair value of the assets is equal to their book values).
Answer and Explanation:
The journal entry is given below;
Cash $2,800
Account receivable $5,600
Inventories $11,200
PPE $28,000
To Account payable $5,600
To Accrued liabilities $8,400
To Long term liabilities $11,200
To Cash $22,400
(Being the cash is paid is recorded)
Here all the assets are debited as it increased the assets and credited all the liabilities except cash as it increased the liabilities and the remaining balance left would be credited to cash account
Overheating of the economy means
output is occurring at an unsustainably high level, at which the unemployment rate is lower than the natural rate of unemployment.
Select one:
a. The business cycle curve is below the growth trend, the economy is experiencing a negative output gap.
b. The business cycle will reach a peak and enter a recession.
c. None of the above
d. The business cycle will reach a troughand enter a recovery
= The business cycle will reach a peak and enter a recession.
Answer:
A is correct.
Explanation:
thank you.
Which of the following is punctuated correctly?
1) I need to know whether you are able to perform the following functions of the job, revising existing marketing materials, promoting the company at trade shows, and reaching potential customers through direct mail campaigns.
2) I need to know whether you are able to perform the following functions of the job; revising existing marketing materials, promoting the company at trade shows, and reaching potential customers through direct mail campaigns.
3) I need to know whether you are able to perform the following functions of the job: revising existing marketing materials, promoting the company at trade shows, and reaching potential customers through direct mail campaigns.
Answer:
The correctly punctuated is:
3) I need to know whether you are able to perform the following functions of the job: revising existing marketing materials, promoting the company at trade shows, and reaching potential customers through direct mail campaigns.
Explanation:
It has the colon at the right place, and the commas observe the standard Oxford Comma convention for making a list. Both colon and comma are punctuation marks that can be used in making a list. Usually, the colon is put after stating "the following," while commas separate one item from the other and are used when the items are three or more, with the last item started with a comma.
Explain one recognised technique used by innovations to protect the intellectual property (IP) of their ideas.
Answer:
Register copyrights, trademarks, and patents.
Explanation:
Copyright GIVES protection of tangible and intangible creative works. The moment you create something, you are the owner. However, you will have proof if you register your work.
the same goes with trademarks and patents. Register so that you will have proof of creation.
Which one is not a benefit to
employee which results through
positive attitude of an employee
Select one:
a. Job security
b. Promotion
c. Less stress
d. Enjoying life
= Promotion
Answer:
I think its B
Explanation:
A is the probability of not losing your job
C Needs a Postive Attitude
D also Needs a Positive Attitude
The one which does not benefit the employee as a result of positive attitude of an employee is Promotion. Thus, option (B) is correct.
What is Promotion?Promotion in the context of a career means raising a worker's position or rank within a hierarchical structure of the organization. The promotion given to those employees who excel in their performance.
Promotion is the one that does not benefit the employee as a result of the employee's positive attitude. Therefore, it can be concluded that option (B) is correct.
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Fill in the blanks with the category of the expanded accounting equation (assets; liabilities; owner, capital; owner, withdrawals; revenues; expenses).
Inventory
Retained Earnings
Dividends
Cost of Goods Sold
Utilities Payable
Service Revenue
Accounts Payable
Rent Expense
Answer and Explanation:
The classification is as follows;
Inventory = current assets
Retained Earnings = stockholder equity
Dividends = dividend
Cost of Goods Sold = expense
Utilities Payable = current liabilities
Service Revenue = revenue
Accounts Payable = current liabilities
Rent Expense = expense
In this way it could be classified and the same is relevant
Provide an example of how an international company (such as Unilever or Mondelez International) changes its distribution channels and/or marketing messages based on country.
Answer:
The examples of the given circumstances are provided below.
Explanation:
Interpretations of how the international corporation (including such Unilever) was indeed changing the distribution platform:
Unilever transforms this same distribution network to potential consumers as well as ensures immediate access includes a multitude of shareholder but instead everyday items. The corporation has a more adaptable distribution network which virtually guarantees direct services to consumers worldwide thru all the different retailers, shopping centers as well as other chain stores.Interpretations of how and why the International Corporation is changing targeted advertising:
Unilever Advertisements have been created on the basis of the cultural values including its Country-Advertising Notifications besides Unilever impacts negatively on either the values of the people throughout order to determine if the project is uniquely equipped to address the requirements of the cultural identity as well as to raise the effectiveness of purchases.Candice is a jewelry shop owner, specializing in beaded necklaces. For each of the following inputs, classify each item as a variable input or a fixed input in the long run.
1. upper management salaries
2. hourly labor
3. shipping
4. two-year lease on office and retail space
5. chairs
6. computers
7. beads
Answer and Explanation:
The classification of the each item as a variable input or fixed input is as follows:
1. upper management salaries = variable input
2. hourly labor = variable input
3. shipping = variable input
4. two-year lease on office and retail space = variable input
5. chairs = variable input
6. computers = variable input
7. beads = variable input
As all the items are calculated as a variable so no fixed input would be considered
ICOT Industries issued 15 million of its $1 par common shares for $424 million on April 11, 2012. Legal, promotional, and accounting services necessary to effect the sale cost $2 million.
Required: Show the journal entry to record the issuance. How does this treatment compare to debt issue costs we talked about in chapter 14?
Answer:
Date Account title and Explanation Debit Credit
Apr 11 Cash ($424 million - $2 million) $422,000,000
Common stock $15,000,000
Paid in capital in excess of par value $407,000,000
($422,000,000 - $15,000,000)
(To record the issue of common Stock)
What is the mental and physical effort made by humans for the production of goods and services?
Labor
Capital
Land
Entrepreneurship
If workers demand and receive higher real wages as a result of successful wage push, the cost of production __and the aggregate supply curve shifts
Select one:
a. falls; left
b. rises; left
c. falls, right
d. rises; right
= rises; left
Answer:
b. rises; left
Explanation:
Wage is the amount incurred in compensating workers for their services. It is a major expense for producers. Wage is one of the inputs in the manufacturing process; producers need labor services to continue operating. An increase in wages raises the production cost of the finished goods.
An increase in the cost of production may limit the quantity of output from the producers. As production cost increase, producers will require additional funds to finance the high production costs. Since resources are scarce in every industry, producers may opt to lower their output to avoid incurring high costs. A decrease in the production volume shifts the aggregate supply curve to the left.
Stocks A and B have the following data. Assuming the stock market is efficient and the stocks are in equilibrium, which of the following statements is correct?
A B
Price $25 $40
Expected growth 7% 9%
Expected return 10% 12%
A) The two stocks should have the same expected dividend
B) The two stocks could not be in equilibrium with the numbers given in the question
C) A's expected dividend is $0.50
D) B's expected dividend is $0.75
E) A's expected dividend is $0.75 and B's expected dividend is $1.20
Answer: E) A's expected dividend is $0.75 and B's expected dividend is $1.20
Explanation:
Using the Gordon growth model, you can calculate the expected dividend. The formula is:
Price = Expected dividend/ (expected return - expected growth)
Stock A expected dividend
25 = D/ (10% - 7%)
D = 25 * 3%
= $0.75
Stock B expected divided
40 = D / (12% - 9%)
D = 40 * 3%
= $1.20
Option A, C and B are therefore wrong.
Option E is correct.