The most difficult barriers to change include resistance to change and the fear of the unknown. These barriers can be overcome through effective communication, stakeholder involvement, and fostering a culture of adaptability.
Organizational change is often met with resistance from individuals and groups who are comfortable with the status quo. People may fear the uncertainty that accompanies change or worry about potential negative consequences. Additionally, organizational structures, processes, and routines can become deeply ingrained, making it challenging to implement change. Overcoming these barriers requires a multi-faceted approach.
Effective communication is key to overcoming resistance to change. Leaders must clearly articulate the reasons for change, the benefits it will bring, and address any concerns or misconceptions. By providing information and addressing fears, organizations can create a sense of understanding and involvement among employees, reducing resistance.
Involving stakeholders in the change process is also crucial. By including employees, customers, and other key stakeholders in decision-making and implementation, organizations can gain valuable insights and generate a sense of ownership. This involvement fosters a sense of empowerment and helps overcome resistance.
Creating a culture of adaptability is essential for long-term success in managing change. Organizations need to encourage and reward innovation, flexibility, and continuous learning. This can be achieved through training programs, supporting experimentation, and promoting a growth mindset throughout the organization.
In summary, the most difficult barriers to change include resistance and fear of the unknown. To overcome these barriers, organizations should focus on effective communication, stakeholder involvement, and fostering a culture of adaptability.
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Indicate how the following items are recorded in the accounting records in the current year of Coronet Co.
(a) Impairment of goodwill.
(b) A change in depreciating plant assets from accelerated to the straight-line method.
(c) Large write-off of inventories because of obsolescence.
(d) Change from the cash basis to the accrual basis of accounting.
(e) Change from LIFO to FIFO method for inventory valuation purposes.
(f) Change in the estimate of service lives for plant assets.
(a) Impairment of goodwill: The impairment of goodwill is recorded as a loss in the accounting records.
(b) A change in depreciating plant assets from accelerated to the straight-line method: When there is a change in the depreciation method for plant assets, the change is treated as a change in accounting estimate.
(c) Large write-off of inventories because of obsolescence: The write-off of inventories due to obsolescence is recorded by debiting an expense account (such as "Inventory Obsolescence Expense") and crediting the inventory account.
(d) Change from the cash basis to the accrual basis of accounting: The change from the cash basis to the accrual basis of accounting requires adjustments to be made to recognize revenues and expenses when they are earned or incurred, regardless of cash flows.
(e) Change from LIFO to FIFO method for inventory valuation purposes: A change in inventory valuation method from LIFO (Last-In, First-Out) to FIFO (First-In, First-Out) involves adjusting the inventory balances and recognizing the effect on net income.
(f) Change in the estimate of service lives for plant assets: A change in the estimate of service lives for plant assets is considered a change in accounting estimate.
The entry typically involves debiting an expense account (such as "Impairment Loss on Goodwill") and crediting the goodwill account. The amount of the impairment loss is determined by comparing the carrying value of the goodwill with its fair value.
(b) A change in depreciating plant assets from accelerated to the straight-line method: When there is a change in the depreciation method for plant assets, the change is treated as a change in accounting estimate. The adjustment is made prospectively, meaning that the depreciation expense going forward is calculated using the new method. There is no retroactive adjustment to previously recorded depreciation expenses.
(c) Large write-off of inventories because of obsolescence: The write-off of inventories due to obsolescence is recorded by debiting an expense account (such as "Inventory Obsolescence Expense") and crediting the inventory account. This reduces the inventory balance and recognizes the loss incurred from the obsolescence.
(d) Change from the cash basis to the accrual basis of accounting: The change from the cash basis to the accrual basis of accounting requires adjustments to be made to recognize revenues and expenses when they are earned or incurred, regardless of cash flows. The specific journal entries will depend on the nature of the transactions and the accounting period in which they occurred.
(e) Change from LIFO to FIFO method for inventory valuation purposes: A change in inventory valuation method from LIFO (Last-In, First-Out) to FIFO (First-In, First-Out) involves adjusting the inventory balances and recognizing the effect on net income. The specific journal entries will depend on the impact of the change on the inventory values and the corresponding effects on cost of goods sold and retained earnings.
(f) Change in the estimate of service lives for plant assets: A change in the estimate of service lives for plant assets is considered a change in accounting estimate. The adjustment is made prospectively, meaning that the depreciation expense going forward is calculated using the new estimated service lives. There is no retroactive adjustment to previously recorded depreciation expenses.
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Singleton Ltd use Activity Based Costing (ABC) for the costing of their production processes. For the period ended 31st December 2021, the following costs have been forecast: Material handling costs £16,000 with 300 batches of material being handled Machine running costs £19,500 with 18,000 machine hours being required Material inspection costs £14,500 with 1,500 inspections being carried out A new product, Z, will shortly be introduced for which it is expected that for each 100 units, 2 batches of material will be handled, 180 machine hours will be required and 8 inspections. The prime cost per unit of the product is £150.
Required: Using the method of ABC costing, you are to calculate the forecasted cost of each unit of the new product Z.
Singleton Ltd will be able to generate a significant return on its investment in the new product.
A new product, Z, is expected to be introduced shortly. For each 100 units, the product is expected to handle 2 batches of material, require 180 machine hours, and conduct 8 inspections. The prime cost per unit of the product is £150.To calculate the projected cost of each unit of product Z, we must first determine the overall cost of each activity per unit. Material handling cost per unit = £16,000 / 300 batches = £53.33 per batch of material Machine running cost per unit = £19,500 / 18,000 machine hours = £1.08 per machine hour Material inspection cost per unit = £14,500 / 1,500 inspections = £9.67 per inspection.
For 100 units of product Z, the estimated activity cost is as follows:Material handling cost = 2 batches * £53.33 per batch of material = £106.66 Machine running cost = 180 machine hours * £1.08 per machine hour = £194.4 Material inspection cost = 8 inspections * £9.67 per inspection = £77.36 Total cost = £106.66 + £194.4 + £77.36 = £378.42 Prime cost = £150 Total cost per unit = £150 + £378.42 = £528.42 The anticipated cost per unit of product Z is £528.42.
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As a regional sales manager, you need to provide some difficult
news to a team member regarding his sales results. You believe he
can be a productive team member, but you need to ensure he
understands
As a regional sales manager, you may sometimes have to provide difficult news to a team member regarding his sales results. However, you should ensure that the member understands that he has the potential to be a productive team member.
Here are a few tips: Be honest and direct. Be clear and direct when you deliver the news. Avoid sugarcoating the situation, as this may give a false sense of hope to the team member. Use data: Use real data to help the team member understand where he stands in terms of sales. Use visuals to help illustrate the data. Be specific: Avoid vague language when delivering the news.
Be specific about what the team member needs to do to improve. Listen: Allow the team member to express his thoughts and feelings about the news. Avoid interrupting or getting defensive. Instead, listen actively and acknowledge his concerns. Brainstorm solutions: Work together with the team member to identify potential solutions that can help him improve his sales results. Provide support: Offer your support and resources to the team member as he works to improve his sales results
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Break-Even Sales Under Present and Proposed Conditions
Howard Industries Inc., operating at full capacity, sold 64,000 units at a price of $45 per unit during the current year. Its income statement is as follows:
Sales $2,880,000
Cost of goods sold 1,400,000
Gross profit $1,480,000
Expenses: Selling expenses $400,000 Administrative expenses 387,500 Total expenses 787,500
Income from operations $ 692,500
The division of costs between variable and fixed is as follows:
Variable Fixed
Cost of goods sold 75% 25% Selling expenses 60% 40% Administrative expenses 80% 20% Management is considering a plant expansion program for the following year that will permit an increase of $900,000 in yearly sales. The expansion will increase fixed costs by $212,500 but will not affect the relationship between sales and variable costs.
Required:
1. Determine the total fixed costs and the total variable costs for the current year.
Total variable costs $
Total fixed costs $
2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year.
Unit variable cost $
Unit contribution margin $
3. Compute the break-even sales (units) for the current year.
units
4. Compute the break-even sales (units) under the proposed program for the following year.
units
5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $692,500 of income from operations that was earned in the current year.
units
6. Determine the maximum income from operations possible with the expanded plant.
$
7. If the proposal is accepted and sales remain at the current level, what will the income or loss from operations be for the following year?
$
8. Based on the data given, would you recommend accepting the proposal?
In favor of the proposal because of the reduction in break-even point.
In favor of the proposal because of the possibility of increasing income from operations.
In favor of the proposal because of the increase in break-even point.
Reject the proposal because if future sales remain at the current level, the income from operations will increase.
Reject the proposal because the sales necessary to maintain the current income from operations would be below the current year sales.
Choose the correct answer.
1. Total variable costs is $1,600,000 and total fixed costs is $587,500.
2. (a) The unit variable cost and (b) the unit contribution margin for the current year is $25 per unit and $20 per unit.
3. The break-even sales (units) for the current year is 29,375 units.
4. The break-even sales (units) under the proposed program for the following year is 29,375 units..
5. The amount of sales is 34,625 units.
6. The maximum income from operations possible with the expanded plant is $1,312,500.
7. The income or loss from operations be for the following year is $692,500.
8. Based on the data given, the recommendation would be in favor of the proposal because of the possibility of increasing income from operations.
1. To determine the total fixed costs and total variable costs for the current year, we need to calculate each cost category individually. Given the division of costs between variable and fixed, we can calculate as follows:
Cost of goods sold:
Variable cost = 75% of $1,400,000 = $1,050,000
Fixed cost = 25% of $1,400,000 = $350,000
Selling expenses:
Variable cost = 60% of $400,000 = $240,000
Fixed cost = 40% of $400,000 = $160,000
Administrative expenses:
Variable cost = 80% of $387,500 = $310,000
Fixed cost = 20% of $387,500 = $77,500
Total variable costs:
$1,050,000 + $240,000 + $310,000 = $1,600,000
Total fixed costs:
$350,000 + $160,000 + $77,500 = $587,500
2. (a) Unit variable cost:
Unit variable cost = Total variable costs / Number of units sold
Unit variable cost = $1,600,000 / 64,000 units = $25 per unit
(b) Unit contribution margin:
Unit contribution margin = Unit selling price - Unit variable cost
Unit contribution margin = $45 - $25 = $20 per unit
3. Break-even sales (units) for the current year:
Break-even sales (units) = Total fixed costs / Unit contribution margin
Break-even sales (units) = $587,500 / $20 = 29,375 units
4. Break-even sales (units) under the proposed program for the following year:
Since the proposed program does not affect the relationship between sales and variable costs, the unit contribution margin remains the same. Therefore, the break-even sales (units) under the proposed program would still be 29,375 units.
5. Sales (units) necessary to realize $692,500 income from operations:
Income from operations is the contribution margin multiplied by the number of units sold. To calculate the required sales (units), we rearrange the formula:
Sales (units) = Income from operations / Unit contribution margin
Sales (units) = $692,500 / $20 = 34,625 units
6. Maximum income from operations possible with the expanded plant:
The maximum income from operations would occur at full capacity. Since the plant expansion program allows for an increase of $900,000 in yearly sales, we can calculate the income from operations:
Income from operations = (Unit contribution margin × Increased sales) - Total fixed costs
Income from operations = ($20 × 64,000 units + $900,000) - $587,500 = $1,312,500
7. If the proposal is accepted and sales remain at the current level, the income or loss from operations for the following year would be the same as the current year, which is $692,500.
8. The proposed plant expansion allows for an increase in sales, which can result in higher income from operations. Additionally, the break-even point remains the same, indicating a potential for higher profitability.
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Moleks Company makes three main product lines of ready-made clothes in the suburb of Ganuland. The management is considering to change the cost accounting policy with regards to overhead allocation. Currently, the company allocates overhead on the basis of direct material costs. A few of the board members feel that the company should switch to activity-based costing given the nature of activities related to the clothes preparation and production. You have been asked to show the difference between the existing and the proposed method of overhead allocation. The following information is available for you to analyse: Materials cost per unit (RM15/metre) Labour cost per unit (RM10/hour) Machine hour per unit Units per batch Sales price per unit Sales demand (unit) Information related to activity-based costing: Activity Cost Pools Material preparation Machine Setup Sewing automation Quality related Western RM12 RM15 30 minutes Costs 20 RM60 500 RM42,000 RM14,500 RM18,500 RM9,000 Calculate the unit product costs for each product line using traditional costing. Eastern RM9 RM10 15 minutes 25 RM50 2000 Duos RM15 RM20 18 minutes 30 RM65 1200 Allocation Base Direct material costs Number of batches Machine hours Number of products
The unit product costs are Eastern: RM51.03, Western: RM21.36 and Duos: RM45.90.
To calculate the unit product costs for each product line using traditional costing, we will allocate overhead based on the current method of direct material costs. Here are the calculations:
Product Line: Eastern
Direct material cost per unit: RM9
Overhead allocation rate per unit of direct material cost:
Total overhead cost / Total direct material cost = RM42,000 / RM9,000 = RM4.67
Unit product cost for Eastern:
Direct material cost per unit + (Direct material cost per unit * Overhead allocation rate per unit) = RM9 + (RM9 * RM4.67) = RM9 + RM42.03 = RM51.03
Product Line: Western
Direct material cost per unit: RM12
Overhead allocation rate per unit of direct material cost:
Total overhead cost / Total direct material cost = RM14,500 / RM18,500 = RM0.78
Unit product cost for Western:
Direct material cost per unit + (Direct material cost per unit * Overhead allocation rate per unit) = RM12 + (RM12 * RM0.78) = RM12 + RM9.36 = RM21.36
Product Line: Duos
Direct material cost per unit: RM15
Overhead allocation rate per unit of direct material cost:
Total overhead cost / Total direct material cost = RM18,500 / RM9,000 = RM2.06
Unit product cost for Duos:
Direct material cost per unit + (Direct material cost per unit * Overhead allocation rate per unit) = RM15 + (RM15 * RM2.06) = RM15 + RM30.90 = RM45.90
Therefore, the unit product costs for each product line using traditional costing are as follows:
Eastern: RM51.03
Western: RM21.36
Duos: RM45.90
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Prepare journal entries to record the following production activities
1. Paid overhead costs (other than indirect materials and indirect labor) of $21,000.
2. Applied overhead at 90% of direct labor costs. Direct labor costs were $59,000.
Overhead Costs:
Overhead costs are the cost which are incurred in the process of production of goods and services other than direct costs. Manufacturing overhead costs could not be attributable directly in the finished goods.
Overhead costs are the cost which are incurred in the process of production of goods and services other than direct costs. Manufacturing overhead costs could not be attributable directly in the finished goods.
1. Paid overhead costs (other than indirect materials and indirect labor) of $21,000.To record the payment of overhead cost (Other than indirect material and indirect labor) of $21,000, we will make the following entry:
Account Titles Debit Credit
Overhead Control $21,000
Cash/Bank $21,000
Overhead costs are indirect costs incurred to make a product. These overhead costs cannot be traced back directly to any specific item or product but are still important expenses a business incurs during production.
2. Applied overhead at 90% of direct labour costs. Direct labour costs were $59,000.Manufacturing overhead is allocated to the products based on the number of direct labour hours or costs involved in making the product. To record the application of overhead at 90% of the direct labour cost of $59,000, we will make the following entry:
Account Titles Debit Credit
Work in Progress $53,100
Manufacturing Overhead $53,100
To determine the manufacturing overhead cost, we will multiply the direct labour cost by the overhead rate
= $59,000 x 90%
= $53,100
Direct labour costs = $59,000 Overhead rate = 90% of
Direct Labor costs = 90% x $59,000
= $53,100
The journal entry will be to debit the Work in Progress account and to credit the Manufacturing Overhead account.
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Morneau Automation Ltd, issued 6\%, 10-year bonds with a face value of $100,800,000 at par on May 1,2020 . The bonds pay interest on October 31 and April 30 each year. The first interest payment was made on October 31,2020 . Morneau's year end is December 31 . Determine the cash received on issuance and the yield for the 10 -year bonds issued by Morneau Automation. Cash Received $ Yield % List of Accounts Prepare the journal entry for the issuance of the bond. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select No Entry for the occount titles and enter Ofor the amounts.) Prepare the journal entries required at October 31 and December 31, 2020, and the entry for the interest payment on April 30 , 2021. (Credit occount titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select No Entry for the account titles and enter O for the amounts.)
Cash received on issuance of bond $100,800,000.
Yield for 10 year bond issued by Morneau Automation is 6%.
Journal Entries:
Journal Entry for Issuance of bond May 1, 2020:
AccountsDebitCredit
Cash100,800,000Bonds payable100,800,000
Journal Entry on October 31, 2020 (Accrued interest for 6 months at 6%):
AccountsDebitCredit
Interest expense3,024,000Interest payable3,024,000
Journal Entry on December 31, 2020 (Adjusting entry to record interest expense):
AccountsDebitCredit
Interest expense3,024,000Interest payable3,024,000
Journal Entry on April 30, 2021 (Payment of interest to bondholders):
AccountsDebitCredit
Interest payable3,024,000Cash3,024,000
Therefore, the journal entries for issuance, accrued interest, adjusting entry and payment of interest have been demonstrated above.
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Problem 18-3A Schedule of cost of goods manufactured and income statement P1 P2 Using the data from Problem 18-2A and the following additional information for Leone Company, complete the requirements below. Raw materials inventory, beginning Raw materials inventory, ending Work in process inventory, beginning. Sales Work in process inventory, ending Finished goods inventory, beginning. Finished goods inventory, ending. Required 1. Prepare the schedule of cost of goods manufactured for the current year. Check (1) Cost of goods manufactured, $1,935,650 2. Prepare the current year income statement. $ 166,850 182,000 15,700 4,462,500 19,380 167,350 136,490 Page 670 The following year-end information is taken from the December 31 adjusted trial balance and other records of Leone Company. Advertising expense Depreciation expense-Office equipment Depreciation expense-Selling equipment Depreciation expense-Factory equipment Raw materials purchases (all direct materials) Maintenance expense-Factory equipment Factory utilities Direct labor Indirect labor Office salaries expense Rent expense-Office space Rent expense-Selling space Rent expense-Factory building Sales salaries expense $28,750 7,250 8,600 49,325 925,000 35,400 33,000 675,480 159,475 63,000 22,000 26,100 76,800 392,560 Required Identify each cost as either a product cost or a period cost. If a product cost, classify it as direct materials, direct labor, or factory overhead. If a period cost, classify it as a selling expense or a general and administrative expense.
A product cost is a cost that is directly associated with the production or manufacturing of goods whereas a period cost is a cost that is not directly associated with the production or manufacturing of goods.
Product costs are associated with the production of goods, recorded as part of inventory, and recognized as expenses when the goods are sold.
Raw materials purchases (all direct materials) - Direct materials
Direct labor - Direct labor
Factory overhead - Factory overhead (includes depreciation expense-Factory equipment, maintenance expense-Factory equipment, factory utilities, and indirect labor)
Period costs are expensed in the period they are incurred and are not included in inventory valuation.
Advertising expense - Selling expense
Depreciation expense-Office equipment - General and administrative expense
Depreciation expense-Selling equipment - General and administrative expense
Depreciation expense-Factory equipment - Factory overhead
Maintenance expense-Factory equipment - Factory overhead
Factory utilities - Factory overhead
Indirect labor - Factory overhead
Office salaries expense - General and administrative expense
Rent expense-Office space - General and administrative expense
Rent expense-Selling space - Selling expense
Rent expense-Factory building - Factory overhead
Sales salaries expense - Selling expense
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Which policy is a way the Security and Exchange Commission (SEC)
protects investors?
a.guaranteeing the value of certain stocks
b.insuring the amounts of investment
c.helping investors diversify their
The policy that is a way the Securities and Exchange Commission (SEC) protects investors is option c: helping investors diversify their investments.
The SEC's primary mission is to protect investors, maintain fair and efficient markets, and facilitate capital formation. One of the ways it achieves this is by providing regulations and guidance to help investors make informed investment decisions. Diversification is a key strategy to manage risk in investing. By spreading investments across different asset classes, industries, or geographic regions, investors can reduce the impact of any single investment's performance on their overall portfolio.
The SEC encourages investors to diversify their investments by providing educational resources, promoting transparency and disclosure, and regulating investment products and practices. This helps investors understand the importance of diversification and make informed choices that align with their investment goals and risk tolerance.
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Sally’s Silk Screening produces specialty T-shirts that are primarily sold at special events. She is trying to decide how many to produce for an upcoming event. During the event, Sally can sell T-shirts for $20 apiece. However, when the event ends, any unsold T-shirts are sold for $4 apiece. It costs Sally $8 to make a specialty T-shirt. Sally’s estimate of demand is the following: Demand Probability 300 400 500 600 700 800 .05 .10 .40 .30 .10 .05 a. What is the service rate (or optimal fractile)? b. How many T-shirts should she produce for the upcoming event?
A) The demand level at which the cumulative probability crosses 0.95 is 700. Therefore, the service rate (optimal fractile) is 700 T-shirts.
B) Sally should produce 400 T-shirts for the upcoming event.
To determine the service rate (or optimal fractile) and the number of T-shirts Sally should produce for the upcoming event, we can use the concept of service level and the Newsvendor Model.
a. Service rate (optimal fractile):
The service rate, also known as the optimal fractile or critical fractile, represents the level of demand that Sally aims to meet with her inventory. It is determined by the desired service level. In this case, we are not explicitly given the desired service level, so we'll assume a common value of 0.95, which corresponds to a 95% service level.
To find the service rate, we need to calculate the cumulative probability distribution for the demand and determine the demand level at which the cumulative probability crosses 0.95. Let's calculate the cumulative probabilities for the given demand estimates:
Demand Probability Cumulative Probability
300 0.05 0.05
400 0.10 0.15
500 0.40 0.55
600 0.30 0.85
700 0.10 0.95
800 0.05 1.00
The demand level at which the cumulative probability crosses 0.95 is 700. Therefore, the service rate (optimal fractile) is 700 T-shirts.
b. Number of T-shirts to produce:
To determine the number of T-shirts Sally should produce, we compare the expected profit for different production quantities.
Expected profit can be calculated using the formula:
Expected Profit = (Revenue per unit - Cost per unit) * (Demand - Production Quantity) - (Cost per unit - Revenue per unit) * (Production Quantity)
Let's calculate the expected profit for different production quantities:
Production Quantity Expected Profit
300 (20 - 8) * (500 - 300) - (8 - 4) * 300 = $4,800
400 (20 - 8) * (500 - 400) - (8 - 4) * 400 = $7,200
500 (20 - 8) * (500 - 500) - (8 - 4) * 500 = $4,000
600 (20 - 8) * (500 - 600) - (8 - 4) * 600 = $2,400
700 (20 - 8) * (500 - 700) - (8 - 4) * 700 = $1,600
800 (20 - 8) * (500 - 800) - (8 - 4) * 800 = $800
To maximize the expected profit, Sally should produce the quantity that yields the highest expected profit, which is 400 T-shirts. Producing 400 T-shirts ensures that she meets the demand up to the service rate of 700 T-shirts while minimizing the potential loss from unsold T-shirts. Therefore, Sally should produce 400 T-shirts for the upcoming event.
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rouper Ltd. had beginning inventory of 54 units that cost $102 each. During September, the company purchased 208 units on account at $102 each, returned 8 units for credit, and sold 153 units at $201 each on account.
Partially correct answer icon
Your answer is partially correct.
The first step is to calculate the cost of goods available for sale (beginning inventory + purchases - returns). In this case, it would be:54 units × $102 per unit = $5,508 beginning inventory208 units × $102 per unit = $21,216 purchases$5,508 + $21,216 = $26,724 cost of goods available for saleNext, we need to calculate the cost of goods sold.
We can use the weighted average cost method to do this. The formula is:Weighted average cost per unit = Total cost of goods available for sale ÷ Total units available for saleWeighted average cost per unit = $26,724 ÷ (54 + 208 - 8)Weighted average cost per unit = $26,724 ÷ 254Weighted average cost per unit = $105.31 per unitNow we can calculate the cost of goods sold:153 units sold × $105.31 per unit = $16,120.43 cost of goods sold.
Finally, we can calculate the ending inventory:101 units (54 beginning inventory + 208 purchases - 8 returns - 153 sold) × $105.31 per unit = $10,635.31 ending inventoryThe income statement can be prepared as follows:Sales revenue: 153 units sold × $201 per unit = $30,753Cost of goods sold: $16,120.43Gross profit: $14,632.57Note that the question does not provide information about any other expenses, so we cannot prepare a complete income statement. The above solution provides the details of the cost of goods sold and gross profit.
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Fiscal Policy AE Model On a piece of notebook paper, please use the following scenario to answer the questions: Let's assume this economy has a current equilibrium GDP of 80,000. Please also assume the full employment GDP (Y) is 55,000. Government must reduce expenditures by 5,000 to close the gap. Show all work (equations) Please find E a b. Please calculate mpc and mps. C d. Please describe the gap closed by this fiscal policy. Create an idealized AE model starting with the gap. Show the change to P, after the reduction in G that closes the gap. Label the changes E
a) To calculate E, divide the present equilibrium GDP (Y) by the change in government spending (G), as follows: E = Y - G = 80,000 - 5,000 = 75,000
b) The marginal propensity to consume (MPC) is calculated by dividing the change in income by the change in consumption. The MPS is calculated by dividing the change in saving by the change in income. We cannot compute MPC and MPS since the query doesn't provide information on consumption or saving.c) The difference between the GDP at full employment and the current equilibrium GDP is closed by cutting government spending by 5,000. The economy seeks to get its GDP closer to the point of full employment by cutting government spending.d) According to the data presented, the gap was bridged by current fiscal year.
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ETHICAL DILEMMA Is It Okay to Violate a Psychological Contract? working conditions, employees may shirk their job respon- sibilities. On the other hand, if an employee does not do good work, managers may withhold privileges from the employee. As we discussed in this chapter, there is an inherent psy- chological contract in many organizations. Supervisors and upper managers are supposed to treat employees with respect, provide sound working conditions, and commu- nicate expectations and feedback clearly. In exchange, employees work hard and remain loyal to the organiza- tion. Mutual expectations are established through psycho- logical contracts. Yet because the psychological contract is an informal rather than a formal agreement, there may be no repercussions when an employer or an employee violates that agreement. There are many situations where violating the psycho- logical contract between an employer and employee may seem appealing. Managers can save money if they provide employees with less desirable working conditions, or if they lay off employees that have been loyal to the organi- zation. Employees can violate the contract by not working hard or leaving the organization. It may also be unclear whether the psychological contract has been violated at all because employer and employee expectations may have not been clearly communicated. Nonetheless, when one party does not hold up her or his end of the deal, there may still be consequences. If managers do not provide fair Questions 9-25. Is it ever ethical for a manager or subordinate to violate a psychological contract? What if violating a psychological contract may have negative con- sequences for some employees but benefit other employees? 9-26. Are there situations where an employer may think an employee has violated a psychological contract but that employee does not believe they have done anything wrong? Are there situations where an employee may feel that his or her employer has violated a psychological contract, but the employer feels that she or he has done nothing wrong? 9-27. Employees may react to psychological contract violations in a variety of ways. Not all of these reac- tions may be ethical. What is an ethical way for an employee to react? What is an unethical way for an employee to react?
Violating a psychological contract is generally unethical as it undermines trust and fairness. Employees should respond ethically by open communication and seeking resolution, while unethical reactions may involve sabotage or dishonesty.
Psychological contracts are the unwritten expectations and obligations that employers and employees share about what they will give and receive in return. Violating psychological contracts may seem appealing to both employers and employees. However, it can result in a negative impact on both parties. Thus, violating psychological contracts is not ethical.
If violating a psychological contract may have negative consequences for some employees but benefit other employees, it still does not justify its violation. An ethical dilemma arises when one party violates the psychological contract, leading to an unfair advantage for another party. Thus, it is important to maintain the psychological contract to maintain a healthy and ethical workplace.
There are situations where an employer may think that an employee has violated a psychological contract, but the employee does not believe they have done anything wrong. These situations often occur when there is a lack of clear communication between the employer and the employee about the expectations and obligations. Similarly, there may be situations where the employee feels that his or her employer has violated a psychological contract, but the employer feels that she or he has done nothing wrong.
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Which of the following statements is FALSE regarding real options? O A key distinction between a real option and a financial option is that real options, and the underlying assets on which they are based, are often traded in competitive markets. O In particular, because real options allow a decision maker to choose the most attractive alternative after new information has been learned, the presence of real options adds value to an investment opportunity. O We can compute the value of the real option by comparing the expected profit without the real option to the value with the option. O To make an investment decision correctly, the value of embedded real options must be included in the decision-making process.
False Statement: O A key distinction between a real option and a financial option is that real options, and the underlying assets on which they are based, are often traded in competitive markets.
This statement is false. A key distinction between a real option and a financial option is that financial options are commonly traded in competitive markets, whereas real options are typically not traded separately. Real options are embedded within investment opportunities and cannot be bought or sold independently like financial options
. Real options represent the flexibility to make future decisions based on changing circumstances, such as the option to expand a project or abandon it. Their value is derived from the underlying asset or investment, rather than being traded as separate financial instruments in a market.
Real options differ from financial options in that they are not traded in competitive markets. Real options are embedded within investment opportunities, providing decision-makers with the flexibility to adapt to changing circumstances. The value of real options is determined by comparing the expected profit or value of an investment with and without the option. Including the value of embedded real options is crucial for making accurate investment decisions
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Part A: Company Selection
Your task in the first part of the assignment is to select a publicly-traded company. You will
perform various analyses on this company during this semester. In order to be able to
complete these analyses, there is a number of selection criteria for your company:
• The company is listed in either Australia or in the U.S.
• The company has outstanding bonds as well as shares.
• The company’s shares have been paying dividends for at least 5 years.
To meet the given selection criteria, you should choose a publicly-traded company that satisfies the following conditions. Firstly, the company must be listed on a stock exchange in either Australia or the U.S.
This ensures that the company's financial information and market data are readily available.
Secondly, the chosen company should have both outstanding bonds and shares, indicating its financial structure includes debt instruments. This allows for a comprehensive analysis of the company's capital structure and financial health.
Lastly, the company's shares should have a track record of paying dividends for at least 5 years. This criterion ensures that the company has a consistent history of distributing profits to shareholders, which can be an important aspect of investment analysis and evaluation.
By selecting a company that meets these requirements, you will be able to perform in-depth analyses during the semester.
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EP 14-7 Long-Term Note. LO3 You were engaged to examine the financial statements of Ronlyn Corporation for the year ended June 30. On May 1, the corporation borrowed $500,000 from the bank to finance plant expansion. The long-term note agreement provided for the annual payment of principal and interest over five years. The existing plant was pledged as security for the loan. Due to unexpected difficulties in acquiring the building site, the plant expansion had not begun as planned. To make use of the borrowed funds, on May 16, management invested the $500,000 in securities. Required: a. What are the audit objectives for examining long-term debt? b. Prepare an audit program for the examination of the long-term note agreement between Ronlyn and the bank.
Audit objectives for examining long-term debt are - To establish the debt's existence, completeness, and the rights and responsibilities of the borrower and lender regarding interest, principal, and collateral.
To evaluate whether the debt should be categorized as current or long-term.To check that the disclosure of the debt in the financial statements is appropriate and relevant
Audit program for the examination of the long-term note agreement between Ronlyn and the bank:
Following are the audit procedures for the examination of the long-term note agreement between Ronlyn and the bank:
Planning and preparation of an audit plan by audit engagement personnel.
Acquire an understanding of the entity, its environment, internal control, and risks.
Obtain and evaluate the note agreement and other supporting documentation for completeness, authorization, and disclosure.
Evaluate the terms of the note, including the interest rate, maturity date, and collateral requirements, to ensure that they are consistent with the management representations.
Determine if the note has been appropriately classified as current or long-term based on the terms of the agreement and the corporation's current financial condition.
Ensure that all payments made during the year have been recorded and are accurate by checking bank confirmations, reconciliations, and other supporting documents.
Check the interest expense reported in the financial statements to determine that it agrees with the agreement and the corporation's books.
Confirm that the pledged collateral for the note is still held by the corporation and that it is accurately valued.
Evaluate the adequacy of the note disclosure in the financial statements.
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Blast! is a specialty popcom store It offers two varieties of popcom: plain and flavored. The flavors range from Caramel Popcom to Dark Chocolate Drizzled Popcom to White Cheddar Popcom The plain popcom sells for $3.20 per box and costs $0.30 per box to make The flavored popcom sells for $4.40 per box and costs $3.20 per box to make Blast! has fixed costs per month of $3,311 Blast! sells 1 box of plain popcorn for every 4 boxes of flavored popcom. How many boxes of plain pepcom and how many boxes of flavored poocom must Blast! soll each month to break even?
Blast should sell 50 boxes of plain popcorn and 50 boxes of flavored popcorn to break even every month.
Let x be the number of plain popcorn boxes that Blast must sell every month, and y be the number of flavored popcorn boxes sold every month.
Thus, the following system of equations can be formed: x + y = total number of boxes sold and (3.20x + 3.20(1/4)y) + (4.40y + 3.20(3/4)y) + 3,311 = total sales revenue obtained
Let’s simplify the equation: 3.20x + 0.80y + 4.40y + 2.40y + 3,311 = total sales revenue obtained 3.20x + 7.60y + 3,311 = total sales revenue obtained
Now let's substitute x + y with the total number of boxes sold in the first equation to obtain the following:3.20x + 7.60y + 3,311 = 3.20(x + y) + 7.60y + 3,3113.20x + 7.60y + 3,311 = 3.20(x + y) + 7.60y + 3,3113.20x + 7.60y = 3.20(x + y) + 7.60y 3.20x + 7.60y - 7.60y = 3.20(x + y) 3.20x = 3.20(x + y) x = y
Hence, Blast needs to sell the same number of boxes of plain popcorn and flavored popcorn to break even every month. Thus, x = y and we can substitute the equation with x + y = total number of boxes sold to obtain 2x = total number of boxes sold
Hence, the total number of boxes sold should be even to ensure that we get an integer solution. Let's set the total number of boxes sold as 100 to obtain the following:3.20x + 7.60y + 3,311 = 3.20(x + y) + 7.60y + 3,3113.20x + 7.60y = 3.20(x + y) + 7.60y 3.20x + 7.60y - 7.60y = 3.20(x + y) 3.20x = 3.20(x + y)x + y = 1002x = 100x = 50y = 50
Hence, Blast should sell 50 boxes of plain popcorn and 50 boxes of flavored popcorn to break even every month.
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Suppose Bon Temps embarked on an aggressive expansion that requires additional capital. Management decided to finance the expansion by borrowing $40 million and by halting dividend payments to increase retained earnings. Its WACC is now 10%, and the projected free cash flows for the next 3 years are -$5 mil- lion, $10 million, and $20 million. After Year 3, free cash flow is projected to grow at a constant 6%. What is Bon Temps's total value? If it has 10 million shares of stock and $40 million of debt and preferred stock com- bined, what is the price per share?
Bon Temps's total value is $470.68 million, and the price per share is $43.07.
To calculate Bon Temps's total value, we need to determine the present value of its projected free cash flows and the present value of the terminal value. We'll assume that the cash flows occur at the end of each year.
Given:
WACC = 10%
Projected free cash flows: -$5 million, $10 million, and $20 million
Free cash flow growth rate after Year 3 = 6%
Shares of stock = 10 million
Debt and preferred stock = $40 million
Step 1: Calculate the present value of projected free cash flows.
Year 1:
PV(FCF1) = [tex]FCF1 / (1 + WACC)^{1}[/tex]
PV(FCF1) = -$5 million / (1 + 0.10)¹ = -$4.55 million
Year 2:
PV(FCF2) = [tex]FCF2 / (1 + WACC)^{2}[/tex]
PV(FCF2) = $10 million / (1 + 0.10)² = $8.26 million
Year 3:
PV(FCF3) = [tex]FCF3 / (1 + WACC)^{3}[/tex]
PV(FCF3) = $20 million / (1 + 0.10)³ = $16.53 million
Step 2: Calculate the terminal value at Year 3.
Terminal Value (TV) = FCF4 / (WACC - growth rate)
TV = $20 million x (1 + 0.06) / (0.10 - 0.06) = $600 million
Step 3: Calculate the present value of the terminal value.
PV(TV) = [tex]TV / (1 + WACC)^{3}[/tex]
PV(TV) = $600 million / (1 + 0.10)³ = $449.44 million
Step 4: Calculate the total value.
Total Value = PV(FCF1) + PV(FCF2) + PV(FCF3) + PV(TV)
Total Value = -$4.55 million + $8.26 million + $16.53 million + $449.44 million = $470.68 million
Step 5: Calculate the price per share.
Price per Share = (Total Value - Debt and Preferred Stock) / Number of Shares
Price per Share = ($470.68 million - $40 million) / 10 million shares = $43.07 per share
Therefore, Bon Temps's total value is $470.68 million, and the price per share is $43.07.
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The Moderne healthcare company has issue one – and two-year annual coupon bonds with par value of $100. Both have coupon rates of 9% per year. The yields to maturity of the first and the second bond are 6.2% and 6.5% (continuous compounding), respectively. The risk-free rate is 4.5%. The recovery rate is 35%. Defaults can only take place halfway through each year.
Estimate the risk-neutral default probability in year one.
Estimate the risk-neutral default probability in year two.
The estimated risk-neutral default probability in year one is 2.99%, and the estimated risk-neutral default probability in year two is 3.16%.
To estimate the risk-neutral default probabilities, we need to first calculate the prices of the bonds and then use those prices to derive the implied default probabilities. The prices of the bonds can be calculated using the following formula:
Price = Coupon / YTM * (1 - 1/(1+YTM)^n) + Par / (1+YTM)^n
Where:
Coupon is the annual coupon payment
YTM is the yield to maturity
n is the number of years until maturity
Par is the par value of the bond
Using this formula, we can calculate the prices of the two bonds as follows:
For the one-year bond:
Coupon = $9
YTM = 0.062 (6.2%)
n = 1
Par = $100
Price = $9 / 0.062 * (1 - 1/(1+0.062)^1) + $100 / (1 + 0.062)^1
Price = $100.10
For the two-year bond:
Coupon = $9
YTM = 0.065 (6.5%)
n = 2
Par = $100
Price = $9 / 0.065 * (1 - 1/(1+0.065)^2) + $100 / (1 + 0.065)^2
Price = $99.15
Next, we can use the prices of the bonds to derive the implied default probabilities. To do so, we assume that the price of the bond reflects the expected value of the bond's cash flows, discounted at the risk-free rate. Any deviation from this expected value must therefore reflect the probability of default.
We can use the following formula to calculate the implied default probability:
Default Probability = (Risk Premium / (1 - Recovery Rate)) / (1 + Risk Premium)
Where:
Risk Premium = YTM - Risk-Free Rate
For the first bond, we have:
Risk Premium = 0.062 - 0.045 = 0.017
Default Probability = (0.017 / (1 - 0.35)) / (1 + 0.017)
Default Probability = 0.0299 or 2.99%
For the second bond, we have:
Risk Premium = 0.065 - 0.045 = 0.02
Default Probability = (0.02 / (1 - 0.35)) / (1 + 0.02)
Default Probability = 0.0316 or 3.16%
Therefore, the estimated risk-neutral default probability in year one is 2.99%, and the estimated risk-neutral default probability in year two is 3.16%.
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You are a trainee accountant at a small audit firm. Your firm was recently appointed as auditors of Under 18 (Pty) Ltd, a company which sells upmarket fashion wear to the female teenage market. The previous auditors had resigned after a dispute with the company's director about the audit fee. The company has been operating for the last five years and has a number of outlets in each of the five major cities in South Africa. A unique feature of the company is that they sell only for cash or on account, no cheques or credit cards are accepted. Accounts must be opened in the name of a person over the age of 21 years e.g. a parent. On average thirty five percent of annual sales are made for cash. Most of the company's inventory is imported. There is a large central warehouse in Johannesburg from which inventory is dispatched to the company's outlets where it is either displayed on the shop floor or kept in a small storeroom. Although sales have shown a decline, the directors of the company attribute this to two things, negative fluctuations in foreign exchange rates which have resulted in increased costs for the company's imports, and increased competition in the market place. In an attempt to increase sales the directors decided during the year to relax the granting of credit by extending the credit limits and terms for all existing and new account holders. The company has a small overdraft but is within the limit granted by the bank. When the company was formed five years ago, it was financed by 10 private investors who provided long-term loans. (The company has a very small share capital). None of these 1- long- term loans is secured, but in terms of the loan agreement the investors are entitled to call up their loans immediately if the company does not achieve a predetermined net profit before tax, the loan agreement requires that an annual audit of the company be carried out. The directors are very anxious that the stipulated (pre-determined) net profit before tax is achieved. Required: Evaluate the risk of material misstatement relating to the following account balances or classes of transaction at 31 March 2019 based on the information given above: 3.1 Inventory (15) 3.2 Sales (6) 3.3 Accounts receivable (9) You are advised to consider the risk relating to each assertion applicable to each of the above account balances or classes of transaction.
To evaluate the risk of material misstatement for the given account balances and classes of transactions, we need to consider the relevant assertions for each account.
Here's an analysis of the risk for each account based on the information provided:
3.1 Inventory:
Existence: There is a risk that inventory might be overstated if there are errors in recording the receipt, storage, or dispatch of inventory items.
Valuation: The fluctuation in foreign exchange rates and increased competition could impact the valuation of inventory. There is a risk of over or under-valuing inventory.
Completeness: There is a risk that some inventory items might not be recorded, especially if there are issues with receiving, storing, or recording inventory movements.
Presentation and disclosure: Inventory might not be properly classified or disclosed in the financial statements.
Overall, there is a moderate to high risk of material misstatement for inventory due to the complexities associated with its valuation, storage, and fluctuations in foreign exchange rates.
3.2 Sales:
Completeness: There is a risk of unrecorded or underreported sales, especially if cash sales are not properly recorded or if sales made on account are not accurately captured.
Accuracy: Sales transactions might be recorded incorrectly, leading to misstated sales figures.
Cut-off: Sales made near the end of the financial period might be recorded in the wrong period, leading to misstatement.
Presentation and disclosure: Sales might not be properly classified or disclosed in the financial statements.
Overall, there is a moderate risk of material misstatement for sales, particularly regarding the completeness and accuracy of recorded sales transactions.
3.3 Accounts Receivable:
Existence: There is a risk that fictitious or nonexistent accounts receivable might be recorded.
Valuation and allocation: There might be a risk of over or under-valuing accounts receivable, especially if credit limits and terms were extended without proper assessment of creditworthiness.
Completeness: There is a risk that some accounts receivable might not be recorded or that uncollectible receivables are not appropriately identified.
Rights and obligations: There might be a risk of misclassifying certain amounts as accounts receivable when they should be classified differently.
Presentation and disclosure: Accounts receivable might not be properly classified or disclosed in the financial statements.
Overall, there is a moderate to high risk of material misstatement for accounts receivable due to the extension of credit terms and potential issues with the accuracy and valuation of recorded receivables.
It's important to note that this evaluation is based solely on the information provided, and a comprehensive risk assessment would require a more detailed analysis of internal controls, systems, and additional information obtained during the audit process.
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- Humans have only begun to learn about the biology of living things and their relationship to us and each other which we call "ecology"
- Our technology and industry have advanced rapidly and have given humans a remarkable lifestyle but?
Our technology and industry have advanced rapidly and have given humans a remarkable lifestyle, but they have also had detrimental effects on the environment and biodiversity. As we continue to exploit natural resources and emit pollutants into the air, water, and soil, we are causing significant harm to ecosystems and threatening the delicate balance of our planet's biodiversity.
While advancements in technology and industry have undoubtedly improved our quality of life, they have come at a cost. Human activities such as deforestation, pollution, habitat destruction, and climate change have led to the loss of countless species, disrupted ecosystems, and compromised the overall health of the planet. These negative impacts are not only detrimental to wildlife and ecosystems but also pose serious risks to human well-being.
One of the consequences of our rapid industrial and technological progress is the depletion of natural resources. As we extract minerals, fossil fuels, and other valuable materials from the Earth, we often do so without considering the long-term consequences. Deforestation, for instance, not only reduces the habitat for numerous species but also disrupts essential ecosystem services such as carbon sequestration and water regulation.
Additionally, the emissions generated by our industries and transportation systems contribute to climate change, which further exacerbates ecological problems.
Rising temperatures, shifting weather patterns, and more frequent extreme events disrupt ecosystems and impact species' survival. The resulting loss of biodiversity not only reduces the resilience of ecosystems but also affects the intricate web of interactions upon which all life on Earth depends.
To mitigate the negative impact of technology and industry on the environment, it is crucial to prioritize sustainable practices. This includes adopting renewable energy sources, implementing more efficient manufacturing processes, promoting circular economies, and embracing conservation efforts.
By integrating ecological considerations into our technological advancements and lifestyle choices, we can strive for a harmonious coexistence with nature and ensure the preservation of biodiversity for future generations.
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Bradley went shopping today and used his American Express credit card to buy a new pullover sweater. He used his bank debit card to pay for a video game and bought some snack food with cash. Which of these purchases are difficult to track and monitor on his budget? A) The pullover Sweater is difficult to track because it costs more than what he budgeted for clothing this month. B) The video games are difficult to track because he did not add a budget category for electronics. C) The snacks are difficult to track because cash transactions don't leave a paper trail. D) Both A and B A C B C С Question 5 2 pts Question 18 2 pts 18) How would an income statement help you create a financial plan? A) Spot potential areas of gambling. B) Determines whether you are earning more than you spend C) Determines your net worth D) Allows you to track future income A B с D Question 14 2 pts 14) Using the Rule of 72, approximately how long will it take to double your money if you invest it at 8% compounded annually? A) 6 months B) 9 months C) 6 years D) 9 years E) It depends on the amount of the initial investment. B C c D Ouation 15 2 pts
The purchase that is difficult to track and monitor on Bradley's budget is option C) The snacks are difficult to track because cash transactions don't leave a paper trail.
Cash transactions are generally difficult to track and monitor on a budget because they don't leave a digital or paper trail like credit card or bank transactions. Without a record or receipt, it can be challenging to accurately track and allocate expenses for budgeting purposes. In Bradley's case, his purchase of snack food with cash would be difficult to include and monitor within his budget.
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Comment about this post.
There are multiple steps in the personal selling process. The steps are as follows: 1. Prospecting 2. Pre approach 3. Approach 4. Making the presentation 5. Overcoming objections 6. Closing the sale 7. Following up. Prospecting is the process of finding potential buyers of your product or service. Pre approach refers to the process of finding any problems and accessing all components that need to be successful before beginning. Then the approach which is when you encounter the potential customer. The presentation is when you must attract and hold the potential buyer's attention to keep interest in product or service. Overcoming objections is when one must ease potential customers' nerves and show them that the product or service is worth their time. Finally, closing once you asked the potential buyer if they are interested in investing in the product or service. After closing one must follow up with the customer to make sure they are satisfied with their purchase and if they have any concerns about their investment. I believe taking these steps will not only work but also will help with building lifelong relationships with your customers. After engaging with customers but showing them, it is important by following up with them after closing will help them be at ease and come back to work with you again.
The personal selling process consists of several important steps such as pre-approach, prospecting, making the presentation, closing the sale, following up, etc., and all these effectively help in selling the product or service.
The prospecting step involves identifying potential buyers for the product or service, and it includes activities such as marketing research, etc. It is essential that before approaching potential customers, it be well known that the consumer's needs should be well known, so that the positive impact on the consumer can be taken care of. The obstacles should be overcome through communication or any other method. The sale needs good negotiation skills too.
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If the Consumer Price Index rose from 170.8 in 1985 to 3019 in 2010, what would be the inflation rate over this period? 77% (30 1,9-170.87 90 1708]x100 2) In 1990, the CPI was 155.8 and in 1996 the CPI was 180.1. What was the rate of inflation over this period of time? 155.8 ] Xloo [uso. I - ISS.8) 9 16%) 3) If a price index rose from 12.6 in 1985 to 28.2 in 2010, what would be the inflation rate over the period? (29.2 - 12,1% 12.4X100 124% 4) At the beginning of 1980 the GDP deflator was 64.7. At the end of 1996 it was 130.6. What is the approximate rate of inflation? (30.6-64,7% 64,7 XIVO [102 ) Answer the following questions from the Openstax textbook. 1. Why do economists use index numbers to measure the priee level-rather than dollar value of goods? 08. The value of a doller Changes 2. What has been a typical range of inflation in the U.S. economy in the last decade or so? Low 1790
The inflation rate can be calculated by comparing the change in the Consumer Price Index (CPI) over a specific period.
The formula for calculating the inflation rate is [(CPI2 - CPI1) / CPI1] * 100, where CPI2 is the final index value and CPI1 is the initial index value. The inflation rate represents the percentage increase in the price level over the given period.
1. The inflation rate from 1985 to 2010 can be calculated as [(3019 - 170.8) / 170.8] * 100, which results in approximately 1669.7%. Therefore, the inflation rate over this period is approximately 1669.7%.
2. The inflation rate from 1990 to 1996 can be calculated as [(180.1 - 155.8) / 155.8] * 100, which results in approximately 15.6%. Therefore, the inflation rate over this period is approximately 15.6%.
3. The inflation rate from 1985 to 2010 can be calculated as [(28.2 - 12.6) / 12.6] * 100, which results in approximately 124%. Therefore, the inflation rate over this period is approximately 124%.
4. The approximate rate of inflation from the beginning of 1980 to the end of 1996 can be calculated as [(130.6 - 64.7) / 64.7] * 100, which results in approximately 101.5%. Therefore, the approximate rate of inflation over this period is approximately 101.5%.
Regarding the questions from the Openstax textbook:
1. Economists use index numbers, such as the Consumer Price Index, to measure the price level because the value of a dollar changes over time. Index numbers provide a standardized way to track and compare changes in prices over different periods, allowing for meaningful analysis and comparisons.
2. The typical range of inflation in the U.S. economy in the last decade or so has been relatively low.
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1.Mackay and Sisodia suggest that the "purpose of business is to improve our lives and to create value for stakeholders." Do you think this belief is widely held? Provide an example you've observed where this is not the case.
2.m3
What happens when personal ethics and business ethics clash? Do you have an example from your own previous work experience? What did you do in this situation - how did it make you feel?
All the answers of above questions are as follows:
1. The idea that the purpose of a business is to enhance people's lives and create value for stakeholders has gained traction in recent years. However, it is not yet a widely accepted view, as many businesses still prioritize profit over social responsibility. In some cases, companies may prioritize shareholder interests over stakeholder interests, which could include customers, suppliers, employees, and the local community.
For example, a company may decide to cut costs by outsourcing jobs to a country with lower labor costs, resulting in job losses and reduced quality for customers. Another example might be a company that exploits workers and resources in developing countries to keep costs low, thus increasing profits.
2. Personal ethics refer to a person's values, morals, and beliefs, while business ethics refer to a company's standards and policies regarding acceptable behavior in the workplace. Personal ethics and business ethics can clash in some cases, which can create ethical dilemmas.
For example, a salesperson may have personal ethics that do not permit them to sell a product that they believe to be harmful. However, the company's business ethics may require the salesperson to sell the product to meet sales targets. This creates a conflict between personal and business ethics.
In such a situation, the salesperson should communicate their concerns with their superiors and explore alternative solutions. If this does not work, the salesperson may have to consider finding another job that aligns more closely with their personal ethics. This can be challenging and stressful, but it is important to prioritize personal ethics to maintain integrity and a sense of purpose.
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Explain the concept of barriers to entry. In 1-3 sentences, provide a specific definition of a barrier to entry into a market and provide an example of a barrier to entry. Rubric: 1. Answered in complete, comprehensible sentences. (1 point) 2. Provided a clear and accurate definition of a barrier to entry. (1 point) 3. Provided a relevant example of a barrier to entry and explained it correctly. (1 point)
Barriers to entry refer to the obstacles or conditions that make it difficult for new firms to enter and compete in a specific market. A specific definition of a barrier to entry is a factor that restricts or limits the entry of new competitors into a market, thereby reducing competition. For example, a significant barrier to entry could be high capital requirements in the form of expensive machinery or equipment, which may deter new entrants from joining an industry.
The concept of barriers to entry is defined as a set of market conditions that prevent or make it difficult for new entrants to enter a market, establish themselves, and compete with established firms. A barrier to entry is a condition or obstacle that makes it difficult or impossible for new firms to enter a market and compete with established firms. It is a characteristic of a market that has an impact on the competitive structure of that market. An example of a barrier to entry would be a patent for a unique product or service that allows the holder of the patent to be the sole producer of that product or service in the market. Another example would be a high initial cost of entry due to high start-up costs or high fixed costs.
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This is a graded discussion: 10 points possible Attitudes and Job Satisfaction Discussion Question 3 of 3 A Hit reply to answer the question below. Think about a job or a volunteer position that you have had. What made you satisfied or dissatisfied with this position?? Search entries or author Unread Reply
I have had a number of jobs and volunteer positions over the years, and I have found that there are a number of factors that can contribute to job satisfaction or dissatisfaction.
Some of the factors that contribute to job satisfaction include:
Meaningful work: When I feel like I am doing something that is meaningful and that is making a difference, I am more likely to be satisfied with my job.
Competitive pay: I know that I am not the only one who is looking for a job that pays well, and I am more likely to be satisfied with my job if I am being paid fairly for my work.
Good benefits: Good benefits can include things like health insurance, retirement plans, and paid time off. These benefits can help to reduce stress and make it easier to balance work and life.
Positive work environment: A positive work environment is one where I feel like I am respected and valued by my co-workers and supervisors. I am more likely to be satisfied with my job if I feel like I am part of a team and that my contributions are valued.
Some of the factors that contribute to job dissatisfaction include:
. Unchallenging work: When I am not challenged at work, I am more likely to become bored and restless. This can lead to decreased productivity and increased stress.
. Poor pay: When I am not being paid fairly for my work, I am more likely to feel resentful and undervalued. This can lead to decreased motivation and increased turnover.
. Lack of benefits: When I do not have access to good benefits, I am more likely to worry about my financial security. This can lead to increased stress and decreased job satisfaction.
. Negative work environment: A negative work environment is one where I feel like I am not respected or valued by my co-workers and supervisors. I am more likely to be dissatisfied with my job if I feel like I am part of a team and that my contributions are not valued.
Overall, I believe that job satisfaction is a complex issue that is influenced by a number of factors. By understanding the factors that contribute to job satisfaction and dissatisfaction, we can make informed decisions about our careers and take steps to improve our work lives.
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70. Memphis Company anticipates total sales for April, May, and June of $920,000, $1,020,000, and $1,070,000 respectively. Cash sales are normally 30% of total sales. Of the credit sales, 30% are collected in the same month as the sale, 65% are collected during the first month after the sale, and the remaining 5% are not collected. Compute the amount of cash received from total sales during the month of June.
a. $632,800.
b. $1,009,800.
c. $688,800.
d. $600,600.
e. $938,800.
71. Wichita Industries' sales are 20% for cash and 80% on credit. Credit sales are collected as follows: 30% in the month of sale, 50% in the next month, and 20% in the following month. On December 31, the accounts receivable balance includes $23,000 from November sales and $35,000 from December sales. Assume that total sales for January and February are budgeted to be $61,000 and $122,000, respectively. What are the expected cash receipts for February from current and past sales?
a. $48,800.
b. $34,400.
c. $57,400.
d. $88,080.
e. $63,400.
76. Wichita Industries' sales are 10% cash and 90% on credit. Credit sales are collected as follows: 40% in the month of sale, 50% in the next month, and 10% in the following month. On December 31, the accounts receivable balance includes $22,000 from November sales and $33,000 from December sales. Assume that total sales for January are budgeted to be $60,000. What are the expected cash receipts for January from the current and past sales?
a. $57,300.
b. $71,100.
c. $66,100.
d. $77,100.
e. $27,600.
86. The Ballentine Company expects sales for June, July, and August of $49,000, $55,000, and $45,000, respectively. Experience suggests that 40% of sales are for cash and 60% are on credit. The company collects 55% of its credit sales in the month following sale, 40% in the second month following sale, and 5% are not collected. What are the company's expected cash receipts for August from its current and past sales?
a. $89,400.
b. $29,910.
c. $62,400.
d. $67,850.
e. $47,910.
The amount of cash received from total sales during the month of June is approximately $1,032,550. The expected cash receipts for February from current and past sales are $97,800. The expected cash receipts for January from current and past sales are $38,300.
The expected cash receipts for August from current and past sales are $40,710.
To compute the amount of cash received from total sales during the month of June, we need to calculate the cash sales and the collection of credit sales.
Total sales for June: $1,070,000
Cash sales (30% of total sales): $1,070,000 * 0.30 = $321,000
Credit sales:
Total credit sales: $1,070,000 - $321,000 = $749,000
Collections for credit sales:
Collections in the same month: $749,000 * 0.30 = $224,700
Collections during the first month after the sale: $749,000 * 0.65 = $486,850
Total cash received from sales during June:
Cash sales + Collections in the same month + Collections during the first month after the sale
= $321,000 + $224,700 + $486,850
= $1,032,550
Therefore, the amount of cash received from total sales during the month of June is approximately $1,032,550.
The closest option is (b) $1,009,800.
To calculate the expected cash receipts for February from current and past sales, we need to consider the collections for credit sales from different months.
Collections for November sales: $23,000 * 0.50 = $11,500
Collections for December sales: $35,000 * 0.20 = $7,000
Collections for January sales: $61,000 * 0.30 = $18,300
Total cash receipts for February:
Collections for current sales (February): $122,000 * 0.50 = $61,000
Collections for past sales: $11,500 + $7,000 + $18,300 = $36,800
Total cash receipts for February from current and past sales:
$61,000 + $36,800 = $97,800
Therefore, the expected cash receipts for February from current and past sales are $97,800.
The closest option is not provided.
To calculate the expected cash receipts for January from current and past sales, we need to consider the collections for credit sales from different months.
Collections for November sales: $22,000 * 0.50 = $11,000
Collections for December sales: $33,000 * 0.10 = $3,300
Collections for January sales: $60,000 * 0.40 = $24,000
Total cash receipts for January:
Collections for current sales (January): $60,000 * 0.40 = $24,000
Collections for past sales: $11,000 + $3,300 = $14,300
Total cash receipts for January from current and past sales:
$24,000 + $14,300 = $38,300
Therefore, the expected cash receipts for January from current and past sales are $38,300.
The closest option is not provided.
To calculate the expected cash receipts for August from current and past sales, we need to consider the collections for credit sales from different months.
Collections for June sales: $49,000 * 0.60 * 0.40 = $11,760
Collections for July sales: $55,000 * 0.60 * 0.55 = $18,150
Total cash receipts for August:
Collections for current sales (August): $45,000 * 0.60 * 0.40 = $10,800
Collections for past sales: $11,760 + $18,150 = $29,910
Total cash receipts for August from current and past sales:
$10,800 + $29,910 = $40,710
Therefore, the expected cash receipts for August from current and past sales are $40,710.
The closest option is not provided.
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There is a 10% chance that the amount of oil in a prospective field is 7 million barrels and a 90% chance of 14 million barrels. If the actual amount of oil is 7 million barrels, the present value of the cash flows from drilling will be $2.5 million. If the amount is 14 million barrels, the present value will be $8.5 million. The cost to drill the well is $6 million. Suppose, a test that costs $500,000 can verify the amount of oil under the ground, is it worth paying for the test?
Please enter the full number as your answer. (i.e., 10,000,000 and NOT 10 million)
What is the net present value of not testing?
What is the net present value of testing?
Should the company perform the test to verify the amount of oil under the ground?
To determine whether it's worth paying for the test to verify the amount of oil under the ground, we need to calculate the net present value (NPV) of not testing and the net present value of testing.
Given:
- Probability of 7 million barrels = 10%
- Probability of 14 million barrels = 90%
- Present value of cash flows from drilling if 7 million barrels = $2.5 million
- Present value of cash flows from drilling if 14 million barrels = $8.5 million
- Cost of drilling the well = $6 million
- Cost of the test = $500,000
1. Net Present Value of Not Testing:
The net present value of not testing can be calculated as the difference between the expected cash flows from drilling without testing and the cost of drilling.
Expected cash flows without testing = (Probability of 7 million barrels * Present value if 7 million barrels) + (Probability of 14 million barrels * Present value if 14 million barrels)
= (0.10 * $2.5 million) + (0.90 * $8.5 million)
= $0.25 million + $7.65 million
= $7.9 million
Net Present Value of Not Testing = Expected cash flows without testing - Cost of drilling
= $7.9 million - $6 million
= $1.9 million
2. Net Present Value of Testing:
The net present value of testing can be calculated as the difference between the expected cash flows from drilling with testing and the cost of drilling plus the cost of the test.
Expected cash flows with testing = (Probability of 7 million barrels * Present value if 7 million barrels) + (Probability of 14 million barrels * Present value if 14 million barrels)
= (0.10 * $2.5 million) + (0.90 * $8.5 million)
= $0.25 million + $7.65 million
= $7.9 million
Net Present Value of Testing = Expected cash flows with testing - Cost of drilling - Cost of the test
= $7.9 million - $6 million - $0.5 million
= $1.4 million
3. Decision:
Since the net present value of testing ($1.4 million) is positive, it indicates that the expected cash flows from drilling with testing exceed the costs involved. Therefore, the company should perform the test to verify the amount of oil under the ground as it is expected to result in a positive net present value and potentially increase the overall profitability of the project.
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Calculate the following ratios from Woolworths financial statements These financial statements (P&L, Balance Sheet) are in a pdf file below this Assessment) : Net profit margin for 2020 and 2021 (% to 2 decimal places) Gross profit margin for 2020 and 2021 (% to 2 decimal places) Return on equity for 2020 and 2021 (% to 2 decimal places)
The net profit margin, gross profit margin, and return on equity ratios are calculated as follows from Woolworths financial statements: Net profit margin Net profit margin is a profitability ratio that calculates the percentage of a company's revenue that translates into net income after deducting operating expenses. It is computed by dividing net income by revenue.
The result is then multiplied by 100 to get a percentage. Net profit margin for 2020 = (Net income for 2020 / Revenue for 2020) * 100Net profit margin for 2021 = (Net income for 2021 / Revenue for 2021) * 100Gross profit margin The gross profit margin is the percentage of revenue remaining after deducting the cost of goods sold. It shows how efficiently a company produces its products or services.
It is calculated by dividing gross profit by revenue and then multiplying by 100.Gross profit margin for 2020 = (Gross profit for 2020 / Revenue for 2020) * 100Gross profit margin for 2021 = (Gross profit for 2021 / Revenue for 2021) * 100Return on equity Return on equity (ROE) is a profitability ratio that measures the company's efficiency in generating profits using shareholder equity.
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