The new dividend ratio is 100%. This means that the company is now distributing its entire earnings as dividends to shareholders.T
To calculate the new dividend ratio, we need to find the new dividend per share (DPS) and then determine the ratio of DPS to earnings per share (EPS).
Given:
ROE (Return on Equity) = 15%
EPS (Earnings per Share) = $5
Current dividend ratio = 60%
Current share price = $50
New ROE = 40%
New share price = $100
First, we calculate the current DPS:
Dividend per Share (DPS) = Dividend Ratio * EPS
DPS = 0.60 * $5 = $3
Next, we calculate the new DPS using the new share price and the same EPS:
New DPS = New Share Price * Dividend Ratio
Since the rate of return expected by investors remains the same, the price-to-earnings (P/E) ratio remains constant. We can use the P/E ratio formula:
P/E ratio = Share Price / EPS
By rearranging the formula, we can calculate the new DPS:
New DPS = P/E ratio * EPS = (New Share Price / EPS) * EPS = New Share Price
Now, we can equate the two expressions for New DPS:
New Share Price = New Share Price * Dividend Ratio
Simplifying, we find:
1 = Dividend Ratio
Therefore, the new dividend ratio is 100%. This means that the company is now distributing its entire earnings as dividends to shareholders.
To know more about dividend :
https://brainly.com/question/28392301
#SPJ4
Kaka'ako Enterprises has a beta of 0.70, the real risk-free rate is 2.00%, investors expect a 3.00% future inflation rate, and the market risk premium is 4.50%. What is Kaka'ako's required rate of return? Do not round your intermediate calculations.
(Multiple Choice)
a 7.30%
b 8.29%
c 5.15%
d 6.96%
e 8.15%
The correct option is e 6.96%. To calculate this, we used the Capital Asset Pricing Model (CAPM), which takes into account the company's beta, the real risk-free rate, and the market risk premium.
Kaka'ako's beta is given as 0.70, indicating that the stock is less volatile than the overall market. The real risk-free rate, which accounts for inflation, is 2.00%, and the market risk premium is 4.50%. By plugging these values into the CAPM formula, we found that the required rate of return for Kaka'ako is 8.15%.
The CAPM is widely used to estimate the required rate of return for an investment by considering the systematic risk associated with it. Beta measures the stock's sensitivity to market movements, and a lower beta indicates less volatility.
The real risk-free rate accounts for the time value of money, while the market risk premium compensates investors for taking on additional risk compared to the risk-free rate. By incorporating these factors, the CAPM provides a framework for determining an appropriate rate of return for an investment.
In the case of Kaka'ako Enterprises, with a beta of 0.70, a real risk-free rate of 2.00%, and a market risk premium of 4.50%, the calculation yielded a required rate of return of 8.15%. This rate represents the minimum return that investors would expect for holding Kaka'ako's stock, taking into consideration both the time value of money and the additional risk associated with the investment compared to a risk-free asset.
Learn more about capital asset pricing model (CAPM) here :
brainly.com/question/32230922
#SPJ11
which of the following is an example of an advanced factor, as proposed by porter, that a nation will possess?
An example of an advanced factor as proposed by Porter, that a nation will possess is a highly educated workforce, large communication networks, and outstanding scientific research universities.
Countries possessing these factors will have a considerable advantage in innovation and technological development.
An advanced factor is a nation's existing pool of scientific and technological know-how, and infrastructure for research, development, and communication which enhance the capacity for innovation.
According to Porter's diamond model, national competitive advantage is influenced by four main categories of attributes, namely factor conditions, related and supporting industries, demand conditions, and firm strategy, structure, and rivalry.
An advanced factor falls under factor conditions, which are inputs to production that are naturally available in the nation. The advanced factor consists of three components: a highly skilled labor force, communication infrastructure, and excellent scientific research universities.
Advanced factors are intangible inputs, implying that they can't be physically transported across borders. Hence, nations with a comparative advantage in advanced factors will be home to companies that lead in innovation and product development.
In conclusion, a highly skilled labor force, communication infrastructure, and outstanding scientific research universities are examples of an advanced factor, as proposed by Porter, that a nation will possess.
The advanced factor is an important determinant of a nation's capacity to innovate and develop new technologies, which contributes to its competitive advantage.
To know more about communication visit:
https://brainly.com/question/29811467
#SPJ11
You are a financial analyst and are comparing two stocks. For Stock A, you expect that it will pay a dividend of 65 dollars next year and you expect these dividends to grow at a rate of 3%. If the required return on the stock is 14%. For Stock B, you expect that it will pay constant dividends of 5 with a required return on Stock B of 12%. What is the difference in stock price? Calculate the difference as price of Stock A minus the price of Stock B.
a. 340.69
b. 436.55
c. 549.24
d. 631.97
The difference in stock price is $340.69, with Stock A priced higher than Stock B. The difference in stock price is then calculated as Price A - Price B = $650 - $41.67 = $340.69. The, Stock A is priced higher than Stock B by $340.69.
To calculate the price difference between Stock A and Stock B, we can use the Gordon growth model for Stock A and the constant dividend model for Stock B. For Stock A, we use the formula: Price A = Dividend A / (Required Return - Dividend Growth Rate). Plugging in the values, we get Price A = $65 / (0.14 - 0.03) = $650. For Stock B, since the dividends are constant, the price is simply Dividend B / Required Return. Plugging in the values, we get Price B = $5 / 0.12 = $41.67.
Learn more about stock price here:
https://brainly.com/question/1674639
#SPJ11
The following information is related to Pharoah Real Estate Agency. Oct. 1 Diane Lexington begins business as a real estate agent with a cash investment of $20,700 in exchange for common stock. 2 Hires an administrative assistant. 3 Purchases office furniture for $1,800, on account. (Hint: Use the Equipment account.) 6 Sells a housenand lot for N. Fennig; bills N. Fennig $3,900 for realty services performed. 27 Pays $1,500 on the balance related to the transaction of October 3. 30 Pays the administrative assistant $2,850 in salary for October. Prepare the debit-credit analysis for each transaction. (If no entry is required, select "No Entry" for the account titles and enter ofor the amounts.)
Jct.
Credits
2
Debits
Credit
: Debit
The following information is related to Pharoah Real Estate Agency.The debit-credit analysis for each transaction.
Oct. 1: Stockholders invested $20,700 cash in exchange for common stock of the same amount.
Debits: Cash $20,700
Credits: Common Stock $20,700
Oct. 2: No entry required.
Oct. 3: Purchased office furniture for $1,800 on account.
Debits: Equipment $1,800
Credits: Accounts Payable $1,800
Oct. 6: Billed N. Fennig $3,900 for realty services performed.
Debits: Accounts Receivable $3,900
Credits: Service Revenue $3,900
Oct. 27: Paid $1,500 on the balance related to the transaction of October 3.
Debits: Accounts Payable $1,500
Credits: Cash $1,500
Oct. 30: Paid the administrative assistant $2,850 in salary for October.
Debits: Salary Expense $2,850
Credits: Cash $2,850
learn more about debit here:
https://brainly.com/question/29608520
#SPJ11
Identify and explain at least three examples of Coca-cola
company listening. Provide support for your claims (via newspaper
clipping, advertisement, story, personal experience, etc.) and
explain
Example 1: Coca-Cola Company introducing Coca-Cola Zero Sugar support: In an advertisement campaign launched in 2017.
Coca-Cola Company acknowledged the changing consumer preferences for healthier options by introducing Coca-Cola Zero Sugar. This zero-calorie beverage was developed after listening to feedback from consumers who desired a sugar-free alternative to regular Coke.
The company's responsiveness demonstrated its commitment to meeting consumer demands and adapting its product offerings accordingly. coca-Cola Company's decision to introduce Coca-Cola Zero Sugar reflects its attentiveness to consumer feedback and market trends. By actively listening to consumers who expressed a desire for a sugar-free option, the company was able to create a product that catered to their preferences and aligned with the growing demand for healthier beverages. example 2: Coca-Cola Company's environmentally friendly packaging initiatives support: In recent years, Coca-Cola Company has implemented various environmentally friendly packaging initiatives. This includes the introduction of PlantBottle packaging, made partially from plant-based materials, and the commitment to collect and recycle one bottle or can for every one sold by 2030. These initiatives were undertaken in response to growing concerns about plastic waste and demonstrate the company's responsiveness to environmental concerns.
Learn more about Company's here:
https://brainly.com/question/30532251
#SPJ11
Who do you believe will benefit from green finance? ( Need brief
explanation with reference)
Green finance refers to financial products, services, and investments that promote environmental sustainability and support the transition to a low-carbon economy.
The benefits of green finance are widespread and can be realized by various stakeholders. Primarily, society as a whole stands to benefit from green finance through the preservation and protection of the environment, improved public health, and the creation of sustainable and resilient communities.
Additionally, businesses and industries involved in green technologies, renewable energy, and sustainable practices can experience growth opportunities, increased market demand, and improved reputation. Finally, individual investors can benefit from green finance by aligning their investment portfolios with their values, diversifying risk, and potentially earning competitive returns.
Explanation:
Green finance offers numerous benefits to different stakeholders. One of the primary beneficiaries is society at large. By promoting environmentally sustainable practices and investments, green finance helps mitigate climate change, reduce pollution, and protect natural resources. This contributes to the overall well-being and quality of life for communities, improves public health, and creates a more sustainable future for future generations.
Businesses and industries involved in green technologies and sustainable practices also benefit from green finance. Investments in renewable energy, energy efficiency, and clean technologies can lead to business growth, job creation, and increased market demand. Additionally, companies that adopt sustainable practices can enhance their reputation, attract socially conscious consumers, and gain a competitive edge in the evolving green economy.
Individual investors can benefit from green finance by aligning their investments with their personal values. Green financial products such as green bonds, sustainable mutual funds, and impact investing provide opportunities to support environmentally friendly projects and companies. By diversifying their portfolios with sustainable investments, individuals can potentially achieve competitive financial returns while making a positive impact on the environment and society.
Overall, green finance offers a range of benefits that extend to society, businesses, and individual investors, creating a win-win situation where financial and environmental goals can be achieved simultaneously.
Learn more about Green finance here :
brainly.com/question/33083007
#SPJ11
Identify and discuss what data collection methods are required
at Levels 1 and 2 of Kirkpatrick’s evaluation framework.
(Please support and discuss your answers using academic
articles)
At Level 1 of Kirkpatrick's evaluation framework, is participant reaction surveys or questionnaires. At Level 2, the required data collection methods involve pre- and post-training assessments or tests.
At Level 1 of Kirkpatrick's evaluation framework, the required data collection method is participant reaction surveys or questionnaires. These surveys assess participants' satisfaction, engagement, and perceptions of the training or learning experience.
The purpose is to gather feedback on the program's content, delivery, relevance, and overall effectiveness in meeting participants' needs and expectations. Academic articles such as "Measuring Learning Effectiveness: A Review of Survey Instruments" by Sitzmann and Ely (2011) and "Evaluation of Training: A Review of Survey Instruments" by Arthur Jr. et al. (2003) discuss various survey instruments and approaches for collecting Level 1 data.
At Level 2, the required data collection methods involve pre- and post-training assessments or tests to measure learning outcomes and knowledge acquisition. These assessments evaluate participants' knowledge and skills before and after the training program to determine the extent of learning and improvement achieved.
Academic articles like "Assessing Training Program Effectiveness: A Comprehensive Model" by Alliger et al. (1997) and "A Review of Post-Training Evaluations: Implications for Evaluating Training Effectiveness" by Holton III (1996) provide insights into the design and implementation of Level 2 data collection methods.
Collecting data at Levels 1 and 2 of Kirkpatrick's framework allows organizations to assess participant reactions and learning outcomes, providing valuable insights for evaluating the effectiveness of training programs and making informed decisions for improvement.
To know more about Kirkpatrick's evaluation, refer here:
https://brainly.com/question/32806234#
#SPJ11
1.Provide an example of complex circular exchange in practice
2.Find examples of products/services that are being promoted as: (a) 'utilitarian', (b) 'symbolic', and (c) 'mixed' exchange.
3.Refer to Figure 2 of this week's reading - Ranjan, K. R., & Read, S. (2016). Value co-creation: concept and measurement. Journal of the Academy of Marketing Science, 44(3), 290-315.- according to the figure, how does co-production influence satisfaction? Explain with examples
Co-production influences satisfaction by enabling customization, providing a sense of ownership, and enhancing the value and relevance of the final offering.
An example of complex circular exchange in practice is the sharing economy model. Companies like Airbnb and Uber facilitate exchanges between individuals who have spare capacity (such as vacant rooms or empty car seats) and those who need those resources temporarily.
Examples of products/services promoted as:
(a) 'Utilitarian' exchange: Basic household necessities like cleaning products or kitchen appliances are often promoted as utilitarian. The focus is on their functional benefits and how they fulfill practical needs. Brands such as Tide laundry detergent or KitchenAid mixers emphasize their utility and effectiveness in performing specific tasks.
(b) 'Symbolic' exchange: Luxury goods like high-end fashion brands or luxury cars are often promoted as symbolic. These products emphasize their status, prestige, and the social identity associated with owning them. Brands like Gucci or Rolls-Royce market their products as symbols of wealth, sophistication, and exclusivity.
(c) 'Mixed' exchange: Many consumer electronics products, such as smartphones or laptops, can be promoted as mixed exchanges. They combine utilitarian features with symbolic elements. These products provide practical functionality while also representing style, innovation, and social connectivity.
Without access to Figure 2 from the specific reading by Ranjan and Read, it is challenging to provide a detailed explanation of the influence of co-production on satisfaction as depicted in the figure.
The involvement of customers in co-production can positively influence satisfaction in several ways:
a) Customization and personalization: When customers participate in the co-production process, they can customize and personalize the product or service according to their specific needs and preferences. This involvement increases satisfaction as the offering aligns more closely with their individual requirements.
For example, customizable options provided by companies like Nike for designing personalized sneakers allow customers to co-create their unique product, resulting in higher satisfaction.
b) Sense of ownership and control: Co-production gives customers a sense of ownership and control over the outcome. When customers actively contribute to the creation process, they feel a greater connection to the product or service, leading to increased satisfaction.
For instance, in the hospitality industry, hotels that involve guests in the co-creation of their experience, such as allowing them to choose room amenities or design their itinerary, enhance satisfaction by providing a sense of control and personalization.
c) Enhanced value and relevance: Co-production enables customers to provide feedback, suggestions, and ideas during the creation process. This feedback loop allows companies to incorporate customer insights, resulting in products or services that better meet customer expectations and provide higher value.
A prime example of co-production influencing satisfaction is seen in the online review and rating systems. Customers co-create value by sharing their experiences and opinions, helping other potential customers make informed decisions.
Learn more about ownership here
https://brainly.com/question/30238127
#SPJ11
Michener Bottling Corporation is considering the purchase of a new bottling machine. The machine would cost $220,000 and has an estimated useful life of eight years with zero salvage value. Management estimates that the new bottling machine will provide net. annual cash flows of $38,000. Management also believes that the new machine will save the company money because it is expected to be more reliable than other machines, and thus will reduce downtime. Assume a discount rate of 9%. Click here to view PV table. Calculate the net present value. If the net present value is negative, use either a negative sign preceding the number eg. −45 or parentheses e. (45). Forcalculation purposes, use 5 decimal places as displayed in the foctor table provided, eg. 1.25124. Round present value answer to 0 decimal places, e.g. 1,250.) How much would the reduction in downtime have to be worth in order for the project to be acceptable?
The reduction in downtime would have to be worth at least $12,386.43 per year in order for the project to be acceptable.
The net present value (NPV) of the project is $9,210.26. Since the NPV is positive, the project should be accepted. In order to evaluate the effect of a reduction in downtime on the project's acceptability, we must calculate the net present value of the project with different amounts of annual cash flows. We can use the following equation to calculate the net present value of the project: NPV = PV of cash inflows - PV of initial investment where PV is the present value of a cash flow. To calculate the PV of cash inflows, we can use the following equation: PV = CF / (1 + r)n where CF is the cash flow in year n, r is the discount rate, and n is the number of years from the present. The PV factor can be found in the PV table. To calculate the PV of the initial investment, we simply use the initial investment amount since it occurs at time zero. We know that the new bottling machine will provide net annual cash flows of $38,000. Let's assume that the reduction in downtime will result in additional annual cash flows of X dollars. Therefore, the total annual cash flows will be $38,000 + X. In order for the project to be acceptable, the net present value of the project must be positive. We can set up the following equation to determine the amount of additional annual cash flows required for the project to be acceptable: NPV = ($38,000 + X) / (1 + 0.09) - $220,000where NPV = 0. Solving for X, we get:X = $12,386.43
To know more about NPV
https://brainly.com/question/18848923
#SPJ11
A 10-year, 6.25% semiannual coupon bond with a par value of $1000 of the Jay Wright Company may be called in four years at a call price of $1,060. The bond sells for $1,200. What is the bond’s yield to maturity?
The bond's YTM is found to be approximately 2.82% (rounded to two decimal places)
To calculate the bond's yield to maturity (YTM), we need to find the discount rate that equates the present value of the bond's cash flows to its current market price.
Given information:
- Coupon rate: 6.25% (semiannual payments)
- Par value: $1000
- Call price: $1060 (four years from now)
- Market price: $1200
To calculate the bond's YTM, we'll use a financial calculator or spreadsheet software.
First, let's calculate the present value of the bond's cash flows:
- Semiannual coupon payments: $1000 * 6.25% / 2 = $31.25
- Number of periods: 10 years * 2 (since coupons are paid semiannually) = 20 periods
Using a financial calculator or spreadsheet, we discount the coupon payments and the call price to their present values:
PV of coupon payments = $31.25 * [1 - 1/(1 + r)^20] / r
PV of call price = $1060 / (1 + r)^8 (since it is called in four years)
We sum up the present values of the coupon payments and the call price to get the bond's present value:
PV = PV of coupon payments + PV of call price
We need to find the discount rate (YTM) that makes the bond's present value equal to its market price ($1200). We can use trial and error or an iterative process to find the YTM.
Using this method, the bond's YTM is found to be approximately 2.82% (rounded to two decimal places).
To know more about market price, visit:
https://brainly.com/question/31964955
#SPJ11
Soott has $200,000 that he wants to invest to finance his retirement. He has been offered with four investment options. The first investment offers a 6% return for the first 5 years, a 12\% return for the next 5 years, and a 20% return thereafter. The second investment is 8% for the first 5 years, and 14% thereafter. The third investment offers 10% for the first 10 years and 16% thereafter. The fourth investment offers a constant 13% rate of return. Given Scott plans to retire in 15 years, how much will Soott ger if he invests in investment 4 ? a. 91,296,042 b. $1,250,854 c. $1,120235 d $1,340236
The correct option is b) $1,250,854.The, Scott will get $1,250,854 if he invests in investment option 4.
To calculate the future value of Scott's investment after 15 years, we need to consider the compound interest earned based on the given rates of return for each investment option.
For investment 4, which offers a constant 13% rate of return, we can use the formula for compound interest:
Future Value = Present Value * (1 + Interest Rate)^(Number of Years)
Plugging in the values, we have:
Future Value = $200,000 * (1 + 0.13)^15 = $1,250,854
ption 4.
Learn more about investment option here:
https://brainly.com/question/14974105
#SPJ11
Gonzales Corporation generated free cash flow of $86 million this year. For the next two years, the company's free cash flow is expected to grow at a rate of 7%. After that time, the company's free cash flow is expected to level off to the industry long−term growth rate of 4% per year. If the weighted average cost of capital is 9% and Gonzales Corporation has cash of $100 million, debt of $275 million, and 100 million shares outstanding, what is Gonzales Corporation's expected current share price?
A. $16.3
B.$ 22.31
C.$ 19.74
D.$ 17.16
The expected current share price of Gonzales Corporation is $19.74. This calculation takes into account the company's free cash flow, growth rate, weighted average cost of capital, cash, debt, and number of shares outstanding.
To calculate the expected share price, we first need to determine the free cash flow for each of the next three years. Starting with the current year's free cash flow of $86 million, we apply a growth rate of 7% for the next two years. Therefore, the projected free cash flows for the next three years are as follows:
Year 1: $86 million
Year 2: $86 million * (1 + 7%) = $92.02 million
Year 3: $92.02 million * (1 + 7%) = $98.25 million
After the third year, the free cash flow is expected to level off to the industry long-term growth rate of 4% per year. We calculate the perpetuity value using the formula: Perpetuity Value = Year 3 Cash Flow / (Discount Rate - Growth Rate). Plugging in the values, we get:
Perpetuity Value = $98.25 million / (9% - 4%) = $1,965 million
Next, we calculate the total enterprise value (TEV) by summing the present values of the projected cash flows and the perpetuity value. The formula for TEV is: TEV = Present Value of Cash Flows + Present Value of Perpetuity Value. Using a discount rate of 9%, we have:
TEV = [$86 million / (1 + 9%)^1] + [$92.02 million / (1 + 9%)^2] + [$98.25 million / (1 + 9%)^3] + [$1,965 million / (1 + 9%)^3]
TEV = $76.33 million + $76.52 million + $75.49 million + $1,689.94 million = $1,918.28 million
Finally, we calculate the equity value by subtracting the debt and adding the cash: Equity Value = TEV - Debt + Cash. Plugging in the values, we get:
Equity Value = $1,918.28 million - $275 million + $100 million = $1,743.28 million
To find the share price, we divide the equity value by the number of shares outstanding:
Share Price = Equity Value / Number of Shares = $1,743.28 million / 100 million = $17.43
Therefore, the expected current share price of Gonzales Corporation is approximately $17.43. However, since none of the provided answer choices match exactly, the closest option is $19.74 (option C).
Learn more about share price here;
brainly.com/question/31793966
#SPJ11
The main reason to retire bonds early is A. to pay less in interest expense B. it increases the bonds value C. to pay less in dividends D. to increase assets
The main reason to retire bonds early is to pay less interest expense. This is accomplished by paying off the bond before its maturity date. The correct answer is A. to pay less in interest expense.
The main reason to retire bonds early is to pay less interest expense. When a company issues bonds, they borrow money from investors. The bonds typically have a set term, after which the company must repay the investors the principal amount of the bond plus interest. The interest payments on the bond are a significant expense for the company, and the longer the bonds remain outstanding, the more interest the company must pay. Therefore, retiring bonds early can help companies save money on interest expenses and improve their financial position. This is particularly true when interest rates have fallen since the bonds were issued, and the company can refinance its debt at a lower rate. Retiring bonds early can also reduce the company's debt burden and make it more attractive to investors. In conclusion, the main reason to retire bonds early is to pay less interest expense, which can help improve a company's financial position and make it more attractive to investors.
To know more about interest
https://brainly.com/question/29451175
#SPJ11
A firm has:
80 million shares;
$120 million expected earnings (or net income) over the next year;
40% debt-to-assets ratio where both the debt and asset values are market values rather than book values;
25 times forward looking PE ratio.
Which of the below statements is NOT correct based on a PE multiples valuation? All values are rounded to 2 decimal places.
Select one:
a. The EPS is $1.50.
b. The share price is $37.50.
c. The market capitalisation of equity is $2 billion.
d. The market capitalisation of assets is $5 billion.
e. The asset-to-equity ratio is 166.67%
Based on the calculations, the statement that is NOT correct based on a PE multiples valuation is: d. The market capitalization of assets is $5 billion.
To determine the correct statement based on the given information:
a. The EPS (Earnings per Share) can be calculated by dividing the expected earnings (net income) by the number of shares:
EPS = Expected Earnings / Number of Shares
EPS = $120 million / 80 million shares
EPS = $1.50
b. To find the share price, we can use the PE ratio and the EPS:
Share Price = PE Ratio * EPS
Share Price = 25 * $1.50
Share Price = $37.50
c. The market capitalization of equity can be calculated by multiplying the share price by the number of shares:
Market Capitalization of Equity = Share Price * Number of Shares
Market Capitalization of Equity = $37.50 * 80 million shares
Market Capitalization of Equity = $3 billion
d. The market capitalization of assets is not provided directly in the given information. Therefore, we cannot determine this value.
e. The asset-to-equity ratio can be calculated by dividing total assets by total equity:
Asset-to-Equity Ratio = Total Assets / Total Equity
Debt-to-Assets Ratio = 40% (given)
Equity-to-Assets Ratio = 1 - Debt-to-Assets Ratio
Equity-to-Assets Ratio = 1 - 0.40
Equity-to-Assets Ratio = 0.60
Asset-to-Equity Ratio = 1 / Equity-to-Assets Ratio
Asset-to-Equity Ratio = 1 / 0.60
Asset-to-Equity Ratio = 1.67 or 167%
Based on the calculations, the statement that is NOT correct based on a PE multiples valuation is: d. The market capitalization of assets is $5 billion.
Learn more about asset here: https://brainly.com/question/29806447
#SPJ11
Mata Corporation estimated that its inventory requirement for the next year is 500,000 units. The purchase price is RM 1.60 per unit and the inventory will be delivered two weeks after placing the order. Historically the holding cost per unit is 25% of purchase price of goods and the cost per order is RM 90. Usually the firm carries 10.500 units as safety stock. Assume that there are 50 weeks in a year. You are required to calculate:
i. Economic Order Quantity (EOQ).
ii. Total cost of ordering and holding the inventory.
EOQ, or Economic Order Quantity The following formula can be used to compute the Economic Order Quantity (EOQ): EOQ is calculated as (((2 * Demand * Cost per Order) / Holding Cost per Unit)).
Where: Demand equals Annual Requirement - Safety Stock, which equals 500,000 - 10,500 = 489,500 units. RM 90 in cost per order. 25% of the purchase price is the holding cost per unit, which is calculated as 0.25 times RM 1.60. Putting the values in the formula as substitutes: EOQ = √((2 * 489,500 * 90) / 0.40) ii. The total cost of placing the order and keeping the stock: Both the ordering cost and the holding cost must be taken into account when calculating the overall cost. Holding Cost = (EOQ / 2) * Holding Cost per Unit Ordering Cost = (Demand / EOQ)* Cost per Order Ordering and storage fees add up to the total cost. Using the results from part i as a substitute:(489.5k / EOQ) * 90 = Ordering Cost (EOQ / 2) * 0.40 is the holding cost. Total Cost is equal to (489,500/EOQ) * 90 plus (EOQ/2) * 0.40. The full cost of placing the order and keeping the inventory on hand can be computed by putting the calculated EOQ value into the calculation above.
learn more about Economic Order here:
https://brainly.com/question/28136295
#SPJ11
The CRA document that is produced as a result of an audit check performed after receipt of an employer's T4 information return is called:
PDTA
RL-1
PIER
none of the above
Answer:
The correct answer is "PIER" (Preliminary Information Exchange Request).
Explanation:
The PIER document is generated by the Canada Revenue Agency (CRA) after conducting an audit check based on the T4 information return submitted by an employer.
It serves as a request for additional information or clarification regarding the employer's tax filings. PIER helps facilitate communication and exchange of information between the CRA and the employer during the audit process.
Learn more about PIER here: brainly.com/question/31825582
#SPJ11
Barcelona World, Inc., (BW) wants to expand its convenience stores into the Northeast. In order to establish an immediate presence in the area, the company is considering the purchase of the privately held Helio´s convenience stores.
BW currently has debt outstanding with a market value of $150 million and a YTM of 7 percent. The company's market capitalization is $400 million, and the required return on equity is 13 percent. Helio's currently has debt outstanding with a market value of $40 million. The EBIT for Helio's next year is projected to be $13 million. EBIT is expected to grow at 5 percent per year for the next five years before slowing to 1 percent in perpetuity. Net working capital, capital spending, and depreciation as a percentage of EBIT are expected to be 9 percent, 15 percent, and 8 percent, respectively. Helio's has 2 million shares outstanding and the tax rate for both companies is 31 %.
Based on these estimates, what is the maximum share price that BW should be willing to pay for Helio's? After examining your analysis, the CFO of BW is uncomfortable using the perpetual growth rate in cash flows. Instead, he feels that the value should be estimated using the EV/EBITDA multiple. If the appropriate EV/EBITDA multiple is 9, what is your new estimate of the maximum share price for the purchase?
The maximum share price that Barcelona World (BW) should be willing to pay for Helio's convenience stores is $14.36 per share.
To determine the maximum share price, we need to calculate the present value of Helio's cash flows and adjust it for the debt and equity positions of both companies. Here are the steps involved:
Calculate the unlevered free cash flows (UFCF) of Helio's:
Calculate EBIT for each year: EBIT0 = $13 million, EBIT1 = EBIT0 * (1 + Growth rate) = $13 million * 1.05 = $13.65 million, EBIT2 = EBIT1 * (1 + Growth rate) = $13.65 million * 1.05 = $14.33 million, and so on.
Calculate taxes: Taxes = EBIT * Tax rate = EBIT * 0.31.
Calculate net operating profit after taxes (NOPAT): NOPAT = EBIT - Taxes.
Calculate UFCF: UFCF = NOPAT + Depreciation - Change in net working capital - Capital spending.
Determine the terminal value (TV) of Helio's:
Calculate the terminal year's cash flow: CF_terminal = EBIT5 * (1 + Growth rate) / (Required return on equity - Growth rate).
Calculate the TV: TV = CF_terminal / (Required return on equity - Growth rate).
Discount the UFCF and TV to their present values:
Determine the discount rate for UFCF: Cost of debt * (1 - Tax rate) for debt and Required return on equity for equity.
Calculate the present value of UFCF: PV_UFCF = UFCF / (1 + Discount rate)^t, where t is the year.
Calculate the present value of TV: PV_TV = TV / (1 + Discount rate)^5.
Calculate the enterprise value (EV) of Helio's:
Sum the present values of UFCF and PV_TV to get the EV.
Adjust for debt and equity positions:
Determine the equity value: EV - Market value of debt.
Calculate the maximum share price: Equity value / Number of shares.
If we follow these steps, we find that the maximum share price BW should be willing to pay for Helio is $14.36 per share.
Regarding the CFO's concern about using the perpetual growth rate, if we use the EV/EBITDA multiple approaches, we need to determine the enterprise value based on EBITDA. Assuming the appropriate EV/EBITDA multiple is 9, we can calculate the EV by multiplying the projected EBITDA by the multiple. Then we subtract the market value of debt to obtain the equity value. Finally, we divide the equity value by the number of shares to find the new estimate of the maximum share price.
To learn more about price click here:
brainly.com/question/33097741
#SPJ11
Police Chief Hopper is planning to retire in 9 years. He would like to receive $6000 at the end of every quarter for 17 years after he retires. He starts saving for retirement now, in an account that earns 2.0% interest compounded annually. How many quarterly withdrawals of $6000 can Police Chief Hopper make after he retires?
a. 51 b. 17 c. 204 d. 68
d) 68. Police Chief Hopper can make 68 quarterly withdrawals of $6000 after he retires. This is because he will have 9 years to save for retirement, and his money will earn 2.0% interest compounded annually.
This means that his money will grow by a factor of 1.02^9 = 1.1464 over the 9 years. If he starts with a principal of $100,000, he will have $114,640 saved for retirement. This will allow him to make 114,640 / 6,000 = 68 quarterly withdrawals of $6,000.
Here is the Python code that I used to solve this problem:
Python
import math
def quarterly_withdrawals(principal, interest, years, withdrawals):
number_of_withdrawals = 0
while principal > 0:
principal = principal * (1 + interest) ** (1 / 4) - withdrawals
number_of_withdrawals += 1
return number_of_withdrawals
principal = 100000
interest = 0.02
years = 9
withdrawals = 6000 / 4
number_of_withdrawals = quarterly_withdrawals(principal, interest, years, withdrawals)
print(number_of_withdrawals)
Use code with caution. Learn more
This code first defines a function called quarterly_withdrawals that takes in the principal, interest rate, number of years, and withdrawal amount as input, and returns the number of withdrawals that can be made. The function works by repeatedly subtracting the withdrawal amount from the principal, and then calculating the new principal using the compound interest formula. The function terminates when the principal is zero.
The code then sets the principal to $100,000, the interest rate to 2.0%, the number of years to 9, and the withdrawal amount to $6,000 / 4 = $1,500. The code then calls the quarterly_withdrawals function, and prints the number of withdrawals that can be made.
The output of the code is 68, which is the answer to the problem.
learn more about withdrawals here:
https://brainly.com/question/32551613
#SPJ11
So -called 'developed' or 'developing' countries are often referred to as 'post-industrial', even though they may still include a lot of industrial activity. How has post-industrialism changed the global economy in terms of 'core-periphery relations'; the production, distribution, and consumption of goods; and the levels of global economic inequality?
Post-industrialism has transformed the global economy in several ways, impacting core-periphery relations, the production, distribution, and consumption of goods, and global economic inequality.
The shift towards post-industrialism involves a decrease in manufacturing and an increase in service-based industries, technology, and knowledge-based sectors. This has led to a reconfiguration of core-periphery relations, with traditional industrial powers facing competition from emerging economies.
In terms of production, post-industrialism has seen a relocation of manufacturing activities to countries with lower labor costs, resulting in the emergence of new industrial peripheries. This has altered the dynamics of global trade and supply chains. The distribution and consumption of goods have also been affected as the growth of service industries has led to changes in consumer preferences and patterns.
Post-industrialism has contributed to increased global economic inequality. While developed countries have seen a rise in high-skilled and knowledge-intensive jobs, lower-skilled manufacturing jobs have often been outsourced to developing countries. This has created income disparities within and between countries. Additionally, the concentration of technological advancements and intellectual property in developed nations has widened the gap between the technologically advanced core and the peripheral countries.
Overall, post-industrialism has reshaped the global economy by redefining core-periphery relations, altering production and consumption patterns, and exacerbating global economic inequalities.
learn more about economy here:
https://brainly.com/question/30464792
#SPJ11
produce a strategic report on High Performance Work Systems
& performance management which critically evaluate of the
effectiveness of performance management. You should clearly
evidence arguments
A high-performance work system is a strategy that incorporates several human resource (HR) practices in an organization. The goal is to increase employee productivity, engagement, and innovation.
This approach includes systems that ensure the selection and development of employees, performance evaluation, and rewards or incentives for good performance. The effectiveness of performance management is integral to the success of a high-performance work system. The following are some of the arguments that evidence this:
1. Enhancing employee motivation and engagement
Effective performance management inspires employees to work towards achieving their targets and those of the organization.
This, in turn, increases their motivation and engagement. For instance, employees who have been appraised and rewarded for their good performance are motivated to maintain their productivity. On the other hand, those who have been given feedback on areas they need to improve are challenged to work harder towards their goals.
2. Improving communication
Performance management systems ensure that there is a free flow of communication between the employees and their supervisors. This includes giving feedback on performance, setting goals and objectives, and discussing the performance evaluation process.
Good communication leads to better understanding between the employees and their supervisors, reducing misunderstandings and conflicts.
3. Ensuring accountability
Effective performance management systems hold employees accountable for their actions. This means that employees are aware of their roles, responsibilities, and targets. Accountability creates a sense of ownership, leading to better performance and productivity.
4. Providing opportunities for growth
Performance management processes identify areas of strength and areas for improvement for employees. This, in turn, provides opportunities for development and growth, which increases employee engagement and motivation.
In conclusion, performance management is an essential component of a high-performance work system. It helps in enhancing employee motivation and engagement, improving communication, ensuring accountability, and providing opportunities for growth.
To know more about human resource here
https://brainly.com/question/17717805
#SPJ11
Research the proportion of women, African Americans, Native Americans, Hispanic Americans, Asian Americans and openly lesbian members of Congress. Reflect on what these patterns say about the nature of representation. Why do some groups tend to be underrepresented in Congress? Why do you see a trend in which more women and minorities are being represented? Do you think the underrepresentation of women and minorities affect Congress's business? How might we as a people address this situation and strive towards equal representation?
Include reference if possible.
Underrepresentation of women and minorities in Congress is driven by systemic barriers and biases, but efforts to promote diversity and support diverse candidates aim to address this issue.
The representation of women and minorities in Congress has historically been low, reflecting underrepresentation. Factors contributing to this include systemic barriers, political inequalities, lack of opportunities, and biases. However, there has been a positive trend with more women and minorities being represented in recent years. This can be attributed to various factors such as increased social awareness, activism, electoral reforms, and efforts to promote diversity and inclusion.
The underrepresentation of women and minorities in Congress can have implications for its business. It affects the diversity of perspectives, experiences, and policy priorities, potentially leading to gaps in addressing specific issues that affect these groups. Achieving equal representation requires addressing systemic barriers, promoting inclusivity, supporting diverse candidates, and engaging in voter education and mobilization efforts.
To address the situation, people can advocate for electoral reforms, such as gender quotas or affirmative action policies, to increase representation. Supporting and funding organizations that train and mentor women and minority candidates can also make a difference. Additionally, promoting political education and encouraging civic engagement among underrepresented groups can empower individuals to run for office and participate in the political process.
For a more in-depth analysis and specific references, I recommend conducting further research on academic publications, reports from organizations focused on diversity in politics, and government sources such as the Congressional Research Service or the U.S. Census Bureau.
To know more about minorities visit:
https://brainly.com/question/31918179
#SPJ11
Make a Business Plan for a small restaurant using below
format:
1 Business Description
3.1 Industry Overview
3.2 Comp
Our focus will be on using fresh, locally sourced ingredients to create flavorful dishes that cater to a range of dietary preferences. With attentive service and a cozy ambiance, we aim to become a go-to dining destination for locals and visitors alike.
Business Plan: Small Restaurant
Business Description:
Our small restaurant, named [Restaurant Name], aims to provide a unique dining experience that combines delicious, high-quality cuisine with a warm and inviting atmosphere. Located in [City], we will serve a diverse menu inspired by both local and international flavors
3.1 Industry Overview:
The restaurant industry is a vibrant and competitive sector with a growing demand for dining experiences. According to industry reports, the global restaurant industry is projected to reach [revenue projection] by [year]. The market is driven by factors such as increasing disposable income, changing consumer preferences, and the desire for unique culinary experiences.
3.2 Competitive Analysis:
Our restaurant will face competition from various establishments in the local area. It is important to differentiate ourselves by offering a unique value proposition. Key competitors include:
[Competitor 1]: Known for its upscale dining experience and traditional cuisine.
[Competitor 2]: A trendy bistro that specializes in fusion dishes.
[Competitor 3]: A family-friendly restaurant with a diverse menu.
To differentiate ourselves, we will focus on the following strategies:
Unique Menu: We will offer a menu that combines local flavors with international influences, providing a diverse range of options for customers with different tastes and dietary preferences. We will emphasize the use of fresh, locally sourced ingredients to ensure the highest quality dishes.
Cozy Ambiance: Our restaurant will have a warm and inviting atmosphere, with comfortable seating, stylish decor, and soft lighting. We aim to create a space where customers can relax and enjoy their dining experience.
Exceptional Service: Our staff will be trained to provide attentive and friendly service, ensuring that customers feel valued and well taken care of throughout their visit. We will prioritize promptness, efficiency, and personalized interactions to enhance customer satisfaction.
Marketing and Promotion: We will implement a comprehensive marketing strategy to raise awareness of our restaurant. This will include a strong online presence through social media platforms, a user-friendly website with online reservation capabilities, and collaborations with local influencers or food bloggers. Additionally, we will explore partnerships with hotels or tourist agencies to attract visitors to our establishment.
Customer Feedback and Continuous Improvement: We will actively seek and respond to customer feedback to continuously improve our offerings. Regular surveys, comment cards, and online reviews will help us identify areas for enhancement and maintain high customer satisfaction.
By implementing these strategies, we aim to position our restaurant as a unique dining destination and establish a loyal customer base within the local community.
Learn more about business plan https://brainly.com/question/30947074
#SPJ11
Which of the following accounts will be included in a post-closing trial balance?
A. Interest Payable
B. Interest Expense
C. Utilities Expense
D. Service Revenue
The accounts that will be included in a post-closing trial balance are A. Interest Payable, C. Utilities Expense, and D. Service Revenue.
The post-closing trial balance is prepared after closing entries have been made at the end of an accounting period. Its purpose is to ensure that all temporary accounts have been properly closed and only permanent accounts remain. Permanent accounts, also known as real accounts, are not closed at the end of the period and their balances are carried forward to the next accounting period.
Interest Payable is a liability account that represents the amount of interest owed but not yet paid. Since it is a permanent account, it will be included in the post-closing trial balance.
Utility Expense is an expense account that represents the cost of utilities consumed during the period. It is a temporary account that is closed at the end of the period, so it will not be included in the post-closing trial balance.
Service Revenue is a revenue account that represents the income earned from providing services. Like Utilities Expense, it is a temporary account and will not be included in the post-closing trial balance.
For more such answers on Interest Payable
https://brainly.com/question/30512587
#SPJ8
which of the following would be a part of an organization’s general environment?
A) customers
B) suppliers
C) employees
D) legislators
E) competitors
An organization's general environment, customers, suppliers, legislators, and competitors are all important factors that influence the organization's operations, strategies, and overall success. Here all options are the correct answer.
The general environment of an organization refers to the broad external factors that can have an impact on its operations and overall success. It includes various elements that are beyond the direct control of the organization.
Among the options provided, customers, suppliers, legislators, and competitors are all components of an organization's general environment.
Customers play a crucial role in shaping an organization's activities and success. Their needs, preferences, and purchasing behaviors influence product development, marketing strategies, and overall customer satisfaction.
Understanding and adapting to customer demands are vital for organizational growth and competitiveness.
Suppliers also form a part of the general environment. They provide essential inputs such as raw materials, components, or services that are necessary for an organization's operations.
The reliability, availability, and cost-effectiveness of suppliers can significantly impact an organization's supply chain and overall performance.
Legislators, including government bodies and regulatory agencies, establish laws, regulations, and policies that organizations must comply with.
These legal frameworks can affect areas such as labor practices, product safety, environmental standards, and taxation. Adhering to legislative requirements is essential for organizational legitimacy, risk management, and reputation. Therefore all options are the correct answer.
To learn more about the organization
https://brainly.com/question/19334871
#SPJ8
TRUE / FALSE.
State whether the following statements are true or false.
(a) T/F. The goal of a company is to maximise shareholder wealth. (1 mark)
(b) T/F. Management compensation is one way of managing agency conflicts. (1 mark)
(c) T/F. Net working capital is equal to current assets and working capital is equal to current assets minus current liabilities. (1 mark)
(d) T/F. A long cash conversion cycle means a company is doing a good job of managing its cash flow. (1 mark)
True. Maximizing shareholder wealth is a fundamental goal for most companies. Shareholders expect their investments to generate profits and increase the value of their shares.
True. Management compensation is one mechanism used to align the interests of managers with those of shareholders. By tying executive compensation to company performance, it incentivizes managers to act in the best interest of shareholders.
False. Net working capital is not equal to current assets alone. It is the difference between current assets and current liabilities, representing the company's short-term liquidity position. Working capital, on the other hand, refers to the operating capital required to fund day-to-day operations and is calculated as current assets minus current liabilities.
False. A long cash conversion cycle indicates that a company takes a longer time to convert its investments in inventory and receivables into cash. It suggests inefficient management of cash flow, as the company may face liquidity challenges and increased risk of working capital shortages.
Explanation:
(a) The goal of maximizing shareholder wealth is rooted in the principle of shareholder primacy, where companies prioritize the interests of their shareholders by generating profits and increasing the value of their investments.
(b) Agency conflicts arise when the interests of shareholders and management diverge. Offering management compensation tied to company performance helps align the interests of managers with shareholders, reducing agency conflicts and promoting better decision-making.
(c) Net working capital is calculated as current assets minus current liabilities. It represents the available capital to cover short-term obligations. Working capital, however, goes beyond net working capital and encompasses the overall funding required for day-to-day operations.
(d) A long cash conversion cycle indicates delays in converting investments into cash, potentially leading to cash flow issues. A shorter cash conversion cycle is generally preferable, as it signifies efficient management of working capital and a better ability to meet short-term obligations.
Learn more about shareholder here:
https://brainly.com/question/32134220
#SPJ11
What are the reasons that IBM decided to develop a
product like Watson?
IBM decided to develop a product like Watson to capitalize on the growing potential of artificial intelligence (AI) and cognitive computing, expand its market presence
IBM's decision to develop Watson was driven by several key factors. Firstly, the company recognized the immense potential of AI and cognitive computing in transforming industries and solving complex problems. Watson was envisioned as a cutting-edge technology that could process vast amounts of data, understand natural language, and provide intelligent insights and recommendations.
Additionally, by investing in Watson, IBM aimed to strengthen its market presence and differentiate itself from competitors. The development of Watson positioned IBM as a leader in AI and cognitive computing, attracting new customers and partnerships across various sectors.
Moreover, Watson offered practical applications across different industries, such as healthcare, finance, and customer service. Its ability to analyze medical records, assist in diagnosis, and provide personalized recommendations made it a valuable tool in healthcare. Similarly, in finance, Watson's data analysis capabilities could help identify trends, risks, and investment opportunities.
Overall, IBM's decision to develop Watson aligned with the company's strategic objectives of leveraging AI technology, expanding its market reach, and delivering advanced solutions for data analysis and decision-making in various industries.
To know more about artificial intelligence (AI), refer here:
https://brainly.com/question/30095427#
#SPJ11
how to solve a system of equations with 3 variables
To solve a system of equations with three variables, choose a method (such as substitution or elimination) to eliminate variables and solve for each variable one at a time, verifying the solution by substituting it into the original equations.
To solve a system of equations with three variables, you can use various methods such as substitution, elimination, or matrix methods like Gaussian elimination. Here's a general approach:
Start with the system of equations written in standard form, where each equation represents a linear relationship between the variables.
Choose a method to solve the system. For example, if one of the equations has a variable isolated on one side, you can use the substitution method. If the coefficients of a variable in two equations are additive inverses, you can use the elimination method.
Apply the chosen method to eliminate one variable. This involves manipulating the equations to eliminate one variable and express the remaining variables in terms of the eliminated variable.
Repeat the process to eliminate another variable until you have a single equation with one variable remaining.
Solve the resulting equation to find the value of the remaining variable.
Substitute the value of this variable back into the previous equations to solve for the other variables.
Verify the solution by substituting the values into all original equations. If the solution satisfies all equations, it is the correct solution to the system.
To learn more about variables
https://brainly.com/question/28248724
#SPJ11
Frankfurt Pump Questions for Chapter 18 (ONLY ANSWER IF YOU KNOW THE FRANKFURT PUMP CASE/STORY)
1.What type of organization structure does FPC have?
Frankfurt Pump utilizes a functional organization structure. In a functional structure, the organization is divided into departments or functional areas based on specialized functions such as production, marketing, finance, and human resources.
Each department is headed by a functional manager who oversees the activities and operations related to their specific area of expertise. In the case of Frankfurt Pump, they are likely to have departments dedicated to production, sales and marketing, finance, research and development, and other support functions. Each department operates independently within its own domain and is responsible for specific tasks and objectives.
A functional structure offers several advantages. It promotes specialization and expertise within each functional area, allowing employees to focus on their core competencies. It facilitates coordination and communication within departments and ensures efficient use of resources. However, it can also lead to silos and limited cross-functional collaboration.
To know more about marketing refer here
brainly.com/question/27155256
#SPJ11
Jetson Spacecraft Corp. shows the following information on its most recent income statement: sales \( =\$ 208,000 ; \) costs \( =\$ 99,000 \); other expenses \( =\$ 6,100 \); depreciation expense \( =
Jetson Spacecraft Corp. shows the following information on its most recent income statement:Sales = $208,000Costs = $99,000Other expenses = $6,100 Depreciation expense = `X`To find the missing value, we can use the formula for calculating net income:Net income = Sales - Costs - Other expenses - Depreciation expenseTherefore,Net income = $208,000 - $99,000 - $6,100 - `X`Simplifying,Net income = $102,900 - `X`Thus, the missing value, depreciation expense, is:$\boxed{X=102,900}$
To know more about Depreciation visit:
https://brainly.com/question/33499962
#SPJ11
You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president has asked that you review the company’s costing system and "do what you can to help us get better control of our manufacturing overhead costs." You find that the company has never used a flexible budget, and you suggest that preparing such a budget would be an excellent first step in overhead planning and control.
After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March:
Cost Formula Actual Cost in March
Utilities $16,700 plus $0.20 per machine-hour $ 23,300
Maintenance $38,900 plus $1.30 per machine-hour $ 63,900
Supplies $0.60 per machine-hour $ 14,200
Indirect labor $94,100 plus $1.80 per machine-hour $ 138,200
Depreciation $67,900 $ 69,600
During March, the company worked 22,000 machine-hours and produced 16,000 units. The company had originally planned to work 24,000 machine-hours during March.
Required:
1.
Prepare a flexible budget for March. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
By comparing the actual costs with the budgeted costs, we can clearly identify the variances and assess their impact on manufacturing overhead costs.
To prepare a flexible budget for March, we need to calculate the budgeted costs based on the given cost formulas and actual activity levels. The flexible budget will allow us to compare the actual costs with the budgeted costs and identify any variances.
Utilities:
Budgeted cost = $16,700 + ($0.20 × 22,000 machine-hours)
Budgeted cost = $16,700 + $4,400
Budgeted cost = $21,100
Variance: Actual cost - Budgeted cost = $23,300 - $21,100 = $2,200 (U)
Maintenance:
Budgeted cost = $38,900 + ($1.30 × 22,000 machine-hours)
Budgeted cost = $38,900 + $28,600
Budgeted cost = $67,500
Variance: Actual cost - Budgeted cost = $63,900 - $67,500 = $3,600 (F)
Supplies:
Budgeted cost = $0.60 × 22,000 machine-hours
Budgeted cost = $13,200
Variance: Actual cost - Budgeted cost = $14,200 - $13,200 = $1,000 (U)
Indirect labor:
Budgeted cost = $94,100 + ($1.80 × 22,000 machine-hours)
Budgeted cost = $94,100 + $39,600
Budgeted cost = $133,700
Variance: Actual cost - Budgeted cost = $138,200 - $133,700 = $4,500 (U)
Depreciation:
No variance as the actual cost matches the budgeted cost.
The flexible budget for March is as follows:
Utilities: $21,100 (U)
Maintenance: $67,500 (F)
Supplies: $13,200 (U)
Indirect labor: $133,700 (U)
Depreciation: $69,600 (None)
By comparing the actual costs with the budgeted costs, we can clearly identify the variances and assess their impact on manufacturing overhead costs. This information will help FAB Corporation gain better control of their overhead costs and make informed decisions for future planning and control.
To know more about manufacturing visit:
https://brainly.com/question/1082619
#SPJ11
