The payback period for Project A is approximately 2.41 years, which is less than the maximum allowable period of 4 years. Therefore, the project should be accepted.
To compute the payback statistic for Project A, we need to calculate the cumulative cash flows until the payback period is reached.
Cumulative cash flow:
Time 0: -1,200
Time 1: -1,200 + 430 = -770
Time 2: -770 + 540 = -230
Time 3: -230 + 560 = 330
Based on the cumulative cash flows, the payback period falls between year 2 and year 3. To determine the exact payback period, we can use linear interpolation:
Payback period = Year 2 + (Cumulative cash flow at Year 2 / Cash flow in Year 3)
Payback period = 2 + (-230 / 560)
Payback period ≈ 2.41 years
Since the payback period of 2.41 years is less than the maximum allowable payback period of 4 years, the project should be accepted.
Therefore, the project should be accepted.
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1. When must payable commissions be removed from an escrow
account?
A. Monthly
B. At the time the transaction is completed
C. Anytime prior to the closing date
D. Quarterly
Payable commissions must be removed from an escrow account at the time the transaction is completed (option b).
An escrow account is an account where a third party holds and regulates payment of the funds required for two parties engaged in a transaction. It assists in making transactions more safe by maintaining the payment until both parties have completed their agreed-upon obligations.
Commissions are money given to an agent who has successfully completed a transaction for a client. An escrow account is often used to hold commission funds until they are paid out. This is done to ensure that the agent receives their payment at the time the transaction is completed.
Payable commissions must be removed from an escrow account at the time the transaction is completed as this is when the agent's obligations are complete. The agent has successfully finished the transaction and is entitled to receive the commission payment. As a result, the funds should be removed from the escrow account and given to the agent.
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Procter and Gamble shares are valued at $61.00 with perpetual year-end dividends of 3.1639%. What dividend payment would a holder of 750 shares receive in perpetuity assuming the share price and dividend rate remain unchanged?
Procter and Gamble's shares are valued at $61.00 with perpetual year-end dividends of 3.1639%. A holder of 750 shares would receive a dividend payment of $23.73 in perpetuity if the share price and dividend rate remain unchanged.
To calculate the dividend payment that a holder of 750 shares would receive in perpetuity, we need to multiply the number of shares by the dividend rate.
The dividend rate of 3.1639% can be converted to a decimal by dividing it by 100: 3.1639% / 100 = 0.031639.
Next, we multiply the number of shares (750) by the dividend rate: 750 * 0.031639 = 23.72925.
Therefore, a holder of 750 shares would receive a dividend payment of $23.73 (rounded to two decimal places) in perpetuity if the share price and dividend rate remain unchanged.
The calculation assumes that the perpetual dividends are paid annually, and the share price and dividend rate remain constant over time. It's important to note that in reality, share prices and dividend rates can fluctuate based on various factors such as market conditions, company performance, and economic factors.
In conclusion, assuming no changes in share price and dividend rate, a holder of 750 shares of Procter and Gamble would receive a perpetuity dividend payment of $23.73 annually.
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Utilitarians a) What are the two key assumptions made by Classical Utilitarians that made their theory egalitarian? What is the limit to this egalitarianism in this theory? b) What's the difference between cardinal utility and ordinal utility? Which kind did Jevons assume? What did Samuelson show regarding the two?
(a) The two key assumptions made by Classical Utilitarians that made their theory egalitarian are as follows:
1. The theory of utility holds that all people have equal interests.
2. According to the theory, we should strive to achieve the greatest good for the greatest number of people.
These two assumptions make the theory egalitarian. The limit to this egalitarianism in this theory is that it does not consider the individual differences of people, their abilities, and their needs. Utilitarianism assumes that all people are equal and have the same interests and needs, which is not always the case.
(b) The difference between cardinal utility and ordinal utility is that cardinal utility measures the intensity of satisfaction, whereas ordinal utility does not. Cardinal utility quantifies utility, allowing us to measure the intensity of a person's pleasure or satisfaction in util units, while ordinal utility ranking alternatives in terms of preferences. Sir William Stanley Jevons assumed that the utility of a good or service could be measured in cardinal units, which is cardinal utility. However, Samuelson demonstrated that ordinal utility is preferable to cardinal utility since it avoids the difficulties associated with measuring the intensity of satisfaction quantitatively. Samuelson demonstrated that there is no way to compare the utilities that various people derive from a particular good or service because they are subjective, and we can't measure them on an objective scale. Ordinal utility rankings provide a better solution to this issue.
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Loan Details Payment Monthly (Beginning-of-month) (PMT) Effective Annual Rate Monthly interest rate (RATE) Months to Pay Off Loan (NPER) 36
Amount of Loan from Bank (PV) $5,000.00
Recreate the above in excel. You seek to borrow $5,000 from a friend. You promise to repay the loan in 36 monthly repayments commencing today. If the effective annual interest (EAR) rate is 19.8% what is the amount of the monthly repayment? (answer do not include $ sign; show cents eg 100.00) Answer:
The amount of the monthly repayment for a $5,000 loan repaid over 36 months with a 19.8% effective annual interest rate is $176.07.
To calculate the amount of the monthly repayment, we can use the Excel function PMT, which calculates the payment for a loan based on constant payments and a constant interest rate.
In Excel, you can input the following values in separate cells:
Loan Details:
PV (Present Value): $5,000.00
RATE (Monthly interest rate): 19.8% / 12 (since it's a monthly rate) = 1.65%
NPER (Months to Pay Off Loan): 36
To calculate the monthly repayment, you can use the PMT function in Excel:
=PMT(RATE, NPER, PV)
=PMT(1.65%, 36, -$5,000.00)
The negative sign before the loan amount indicates that it is a cash outflow (repayment). This formula will give you the monthly repayment amount.
Using this formula, the monthly repayment amount comes out to be $176.07.
To repay the loan of $5,000 over 36 monthly repayments, commencing today, with an effective annual interest rate of 19.8%, the amount of the monthly repayment would be $176.07.
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Historical trends show that the average renter in Fayette county pays rent 1.5 days early. An economist collects a sample of 250 renters in Fayette in order to test whether this number was lower than 1.5 for the month of July 2020 . The sample mean is 0.3, and the population standard deviation is assumed to be 2.9. What is the test statistic (z score)? 5.08 −6.54 −4.67 3.98
The correct option is -6.54.
Given information:
Historical trends show that the average renter in Fayette county pays rent 1.5 days early.
An economist collects a sample of 250 renters in Fayette in order to test whether this number was lower than 1.5 for the month of July 2020.
The sample mean is 0.3, and the population standard deviation is assumed to be 2.9.
To calculate the test statistic (z-score), we will use the formula below:
z = (sample mean - population mean) / (population standard deviation / √sample size)
Here,
sample mean is 0.3,
population mean is 1.5,
population standard deviation is 2.9,
and sample size is 250.
z = (0.3 - 1.5) / (2.9 / √250)z
= -1.2 / (2.9 / 15.81)z
= -1.2 / 0.1845z
= -6.51 (rounded off to two decimal places)
Hence, the test statistic (z score) is approximately -6.51.
Therefore, the correct option is -6.54.
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The resulting accuracy of a collaborative forecast enables supply chains to be
A) more responsive but less efficient in serving their customers.
B) both more responsive and more efficient in serving their customers.
C) less responsive but less efficient in serving their customers.
D) both less responsive and less efficient in serving their customers.
E) None of the above are true.
The resulting accuracy of a collaborative forecast enables supply chains to be both more responsive and more efficient in serving their customers.
Collaborative forecasting involves sharing information and coordinating efforts among various supply chain partners to generate accurate demand forecasts. With improved accuracy, supply chains can make better decisions regarding inventory management, production planning, and distribution, leading to enhanced responsiveness to customer demand. By aligning their operations based on reliable forecasts, supply chains can optimize their resources and reduce inefficiencies, resulting in improved overall efficiency in serving customers.
This approach allows supply chains to strike a balance between responsiveness and efficiency, meeting customer demands promptly while minimizing costs and waste. It enables organizations to align their production and inventory levels more accurately with customer needs, reducing stockouts and excess inventory. Ultimately, a collaborative forecast facilitates better coordination and synchronization among supply chain partners, leading to improved customer satisfaction and competitive advantage.
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businessaccountingaccounting questions and answersmidnight sun apparel company uses normal costing, and manufacturing overhead is applied to work-in-process on the basis of machine hours. on january 1 of the current year, there were no balances in work-in-process or finished-goods inventories. the following estimates were included in the current year’s budget.
Question: Midnight Sun Apparel Company Uses Normal Costing, And Manufacturing Overhead Is Applied To Work-In-Process On The Basis Of Machine Hours. On January 1 Of The Current Year, There Were No Balances In Work-In-Process Or Finished-Goods Inventories. The Following Estimates Were Included In The Current Year’s Budget.
Midnight Sun Apparel Company uses normal costing, and manufacturing overhead is applied to work-in-process on the basis of machine hours. On January 1 of the current year, there were no balances in work-in-process or finished-goods inventories. The following estimates were included in the current year’s budget.
Total budgeted manufacturing overhead $ 282,000
Total budgeted machine hours 47,000
During January, the firm began the following production jobs:
A79: 1,000 machine hours
N08: 2,500 machine hours
P82: 500 machine hours
Prepare a journal entry to prorate the balance calculated in requirement 3 (Underapplied overhead = $2000) among the Work-in-Process Inventory, Finished-Goods Inventory, and Cost of Goods Sold accounts. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
To prorate the underapplied overhead of $2,000 among the Work-in-Process Inventory, Finished-Goods Inventory, and Cost of Goods Sold accounts, you would make the following journal entry:You would record the following journal item to allocate the $2,000 underapplied overhead across the cost of goods sold, finished goods inventory, and work-in-progress inventory:
Debit Work-in-Process Inventory: $666.67
Debit Finished-Goods Inventory: $1,333.33
Debit Cost of Goods Sold: $0.00
Credit Manufacturing Overhead: $2,000.00
Based on the proportional amount of machine hours for each manufacturing work, this item distributes the underapplied overhead.
This entry distributes the underapplied overhead based on the relative proportion of machine hours for each production job.
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Describe the Airbnb’s internal environment. List Airbnb’s
external factors.
List Airbnb’s internal competitive advantages.
How does Airbnb differentiate itself from its competitors?
Where is Air
Airbnb's Internal Environment:
The internal environment of Airbnb refers to the factors and resources within the organization that influence its operations and strategic decisions. Some aspects of Airbnb's internal environment include:
1. Organizational Structure: Airbnb operates with a hierarchical organizational structure, which allows for effective coordination and decision-making across its various departments and teams.
2. Company Culture: Airbnb fosters a culture of openness, diversity, and collaboration. The company values creativity, innovation, and a customer-centric approach to providing unique and personalized travel experiences.
3. Brand Image: Airbnb has established a strong brand image as a trusted platform for alternative accommodations and unique travel experiences. Its brand values focus on creating a sense of belonging, fostering cultural exchange, and promoting sustainable travel.
4. Technology Infrastructure: Airbnb heavily relies on its advanced technology platform, including its website, mobile applications, and backend systems, to facilitate seamless booking, communication, and transaction processes for hosts and guests.
Airbnb's External Factors:
External factors are elements outside of Airbnb's direct control that can influence its business operations and performance. Some of the external factors impacting Airbnb include:
1. Market Competition: Airbnb operates in a highly competitive industry, facing competition from traditional hotels, online travel agencies (OTAs), and other vacation rental platforms. The competitive landscape affects Airbnb's market share and pricing strategies.
2. Regulatory Environment: Regulatory frameworks and policies regarding short-term rentals and home-sharing vary across different jurisdictions. Compliance with local regulations and legal challenges can impact Airbnb's operations and expansion plans.
3. Economic Conditions: Economic factors, such as overall economic growth, exchange rates, and consumer spending patterns, can influence travel demand and affect Airbnb's business performance.
4. Technological Advancements: The evolving technological landscape, including advancements in mobile technology, data analytics, and artificial intelligence, can impact Airbnb's business model, customer experience, and competitive advantage.
Airbnb's Internal Competitive Advantages:
Airbnb has several internal competitive advantages that differentiate it from its competitors:
1. Extensive Global Network: Airbnb has a vast and diverse network of hosts and guests worldwide. This extensive network provides a wide range of accommodations in various locations, offering travelers unique and personalized experiences.
2. Brand Recognition and Trust: Airbnb has built a strong brand reputation and trust among travelers, which enhances its competitive advantage. The company's emphasis on user reviews, host verification, and secure payment systems contributes to its credibility and reliability.
3. User-Friendly Platform: Airbnb's intuitive and user-friendly platform enables hosts to list their properties easily and guests to find and book accommodations seamlessly. The platform's design and functionality contribute to a positive user experience and attract both hosts and guests.
4. Enhanced Personalization: Airbnb emphasizes personalized travel experiences, allowing guests to find accommodations that align with their preferences, interests, and budgets. This personalized approach sets Airbnb apart from traditional hotel offerings.
Airbnb's Differentiation:
Airbnb differentiates itself from its competitors through several key strategies:
1. Unique Accommodation Options: Airbnb offers a wide range of unique and unconventional accommodation options, such as treehouses, castles, and boats, providing travelers with distinctive and memorable experiences.
2. Local and Cultural Immersion: Airbnb promotes the concept of living like a local, encouraging guests to immerse themselves in the local culture and community. This differentiates Airbnb from traditional hotels, offering a more authentic and immersive travel experience.
3. Host-Guest Interaction: Airbnb fosters direct communication and interaction between hosts and guests, enabling personal connections and fostering a sense of belonging. This social aspect sets Airbnb apart from traditional accommodation providers.
4. Social Impact and Sustainability: Airbnb emphasizes sustainability and responsible travel. The company supports initiatives that benefit local communities and the environment, aligning with the growing trend of conscious and sustainable travel.
It's worth noting that the question was cut off before completion
. If you have any further specific inquiries about Airbnb or any other topic, please feel free to ask.
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Only answer the question #2
The four (4) audit cycles used for the following question is as followed:
* Cash & Bank
* Receivables
* Inventory
* Payroll
2. Discuss the relationship between each account within each of four (4) identified audit cycles? (40 Marks).
Within each of the four identified audit cycles, the relationship between the accounts can be described as follows: Cash & Bank Cycle: Cash
account and Bank account are closely related, with cash representing physical currency and coins while bank accounts hold balances and transactions related to cash. The auditor reconciles the two to ensure the accuracy and completeness of cash transactions. Receivables Cycle: The Accounts Receivable account represents amounts owed by customers, while the Allowance for Doubtful Accounts is an estimation of uncollectible receivables. The auditor assesses the adequacy of the allowance based on historical data and supporting documentation. Inventory Cycle: The Inventory account records goods held for sale or production, while the Cost of Goods Sold represents the cost of inventory sold. The auditor verifies inventory valuation, accuracy, and completeness, ensuring proper calculation of cost of goods sold. Payroll Cycle: Payroll Expense account represents employee compensation, while Payable and Accrued Payroll accounts reflect amounts owed to employees. The auditor examines payroll records and supporting documents to verify payroll expenses and accruals In each audit cycle, the relationship between accounts involves assessing the accuracy, completeness, and valuation of related transactions to ensure the integrity of financial statements.
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Requirement 1. Record the two transactions for Tina Washington, Lawyer. Include an explanation for each transaction. Record the service performed on account for $19,000. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.)
As per the requirement, we need to record two transactions for Tina Washington, Lawyer, and provide an explanation for each of them. The first transaction is related to the service provided on account for $19,000.
In this transaction, Tina performed legal services for a client and billed them for $19,000, which means the client has an outstanding amount to be paid to Tina. To record this transaction, we will debit Accounts Receivable (an asset account) for $19,000, as the client owes this amount to Tina. On the other hand, we will credit Revenue (a credit account) for $19,000, as this is the income earned by Tina for providing the legal service.
This journal entry will increase the value of accounts receivable, which represents the amount owed by clients to the business, and revenue, which represents the income earned by the business.
The second transaction is not specified, but as per the requirement, we need to record two transactions. So, let's assume that Tina purchased office supplies for $500 and paid cash for it. To record this transaction, we will debit Office Supplies (an asset account) for $500, as we have acquired office supplies, which are an asset. We will credit Cash (an asset account) for $500, as we have paid for those supplies in cash. This journal entry will increase the value of office supplies and decrease the value of cash.
To summarize, recording transactions accurately is an essential aspect of accounting as it helps businesses keep track of their financial activities. By using proper journal entries, we can ensure that every transaction is recorded correctly and that the financial statements accurately reflect the financial position of the business.
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In order to truly understand the ethics required for accountants and to be an ethical accounting professional, what must you keep in mind? Select an answer: Ethical standards are static and unchanging
In order to truly understand the ethics required for accountants and to be an ethical accounting professional, you must keep in mind that ethical standards evolve over time (option 3).
Ethics in accounting is the study of proper business behavior and the ethical principles that regulate accounting. In recent years, many of the largest accounting scandals have made it apparent that professionals in this field have a significant impact on the overall well-being of society.
Financial statements prepared by accountants provide critical information to investors, creditors, and stakeholders, among others, in making investment, credit, and business decisions. Accountants must be trustworthy and ethical, with a solid moral compass guiding their actions.
Accountants are expected to maintain a high degree of professionalism in all aspects of their work, including maintaining confidential information and upholding fiduciary duties. As ethics standards evolve, accountants are also required to stay up to date with the latest regulations, standards, and best practices in the industry.
The accounting profession is continually evolving, with new ethical challenges arising in an ever-changing business environment. Therefore, it is critical to staying informed about developments in the profession and embracing ethical practices that reflect these changes.
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The full question is given below:
In order to truly understand the ethics required for accountants and to be an ethical accounting professional what must you keep in mind? Select an answer:
Ethical standards are static and unchanging Ethical standards are not related to behaviors Ethical standards evolve over timeMidwest Realty, Inc. is a regional real estate firm. Andrea Midwest incorporated the firm 11 years ago. She is the founder, president, and the majority stockholder. Recently, Midwest decided to expand her successful local real estate firm into a regional operation. She established offices in major cities across the Midwest. Midwest Realty, Inc. leased the office space. The standard lease agreement included a 10-year, non-cancelable term and a 5-year option renewable at the discretion of the tenant. Two years ago, the residential home market was depressed in the Midwest due to the movement of factory jobs abroad, a shaky economy, and tight credit policies. Midwest decided to eliminate 10 offices located in depressed economic areas that she believed would not recover in the housing market during the next 5 years. This year, Midwest Realty, Inc. closed the 10 offices. Midwest Realty, Inc., however, was bound by the lease agreements on all these offices. The company subleased four of the 10 offices but continued to make lease payments on the six remaining vacated ones. Midwest Realty properly classified the lease commitments as operating leases. The controller for the company, Calvin Brain, expressed concern to Midwest about the proper accounting for the lease commitments on the six remaining offices available for subleasing. Brain believes they must recognize that the future lease commitments are a loss for the current period. However, the executives of Midwest disagree and believe that the rental payments are period costs to recognize as an expense in the year paid. Midwest is confident that the company can sublease the vacant offices within the next year and avoid booking a loss and corresponding liability in this accounting period. Midwest has, however, given Brain the job of researching this problem and making recommendations supported by current authoritative accounting pronouncements. Brain has asked your firm, XYZ CPAs, to help in the development of the recommendations. Complete all five steps of the research process for this problem, documenting each step.
Write a research memo summarizing the issues, provide a conclusion, and include documentation with applicable authority to support your recommendations
Based on the research conducted, it is recommended that Midwest Realty, Inc. recognizes a loss and corresponding liability for the future lease commitments on the remaining vacated offices in the current accounting period. Proper disclosure should also be provided in the financial statements. This approach aligns with the guidance provided by the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC).
Research Memo
To: Calvin Brain, Controller
From: XYZ CPAs
Date: [Date]
Subject: Accounting Treatment for Lease Commitments on Vacated Offices
I have conducted research to address the concerns regarding the proper accounting treatment for the lease commitments on the six remaining vacated offices of Midwest Realty, Inc. I have followed the five-step research process, and below are the findings and recommendations supported by relevant authoritative accounting pronouncements.
Step 1: Identify the Issue
The issue at hand is whether Midwest Realty, Inc. should recognize the future lease commitments on the remaining vacated offices as a loss for the current period or treat the rental payments as period costs to be recognized as expenses in the year paid.
Step 2: Gather Relevant Information
- Midwest Realty, Inc. closed 10 offices due to depressed economic conditions in the housing market.
- The company subleased four of the vacated offices but continued to make lease payments on the remaining six offices.
- Midwest Realty properly classified the lease commitments as operating leases.
Step 3: Analyze the Issue
The accounting treatment for lease commitments is governed by the applicable accounting standards. In this case, we need to consider the guidance provided by the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC).
Step 4: Provide Recommendations
Based on my research and analysis of the situation, I recommend the following:
1. Recognition of Loss:
Midwest Realty, Inc. should recognize a loss for the lease commitments on the remaining vacated offices in the current accounting period. The closure of the offices indicates an impairment of the leased assets, leading to an obligation to make lease payments without the corresponding benefit of using the premises.
2. Liability Recognition:
Midwest Realty, Inc. should recognize a corresponding liability for the future lease commitments on the remaining vacated offices. The liability should be measured based on the present value of the remaining lease payments as required by ASC 840-20-25-1.
3. Disclosure:
Midwest Realty, Inc. should provide appropriate disclosures in the financial statements to ensure transparency and inform users about the lease commitments and their impact on the company's financial position and results of operations. This disclosure should comply with the requirements of ASC 840-20-50-3.
Step 5: Document Sources and Authority
To support the recommendations, I have referenced the following authoritative accounting pronouncements:
- ASC 840-10-25-1: Requires lessees to recognize lease obligations as liabilities and lease assets at the present value of future lease payments when a lease is entered into.
- ASC 840-20-25-1: Provides guidance on recognizing liability for lease commitments.
- ASC 840-20-50-3: Requires disclosure of certain information related to lease commitments in the financial statements.
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The Maurer Company has a long-term debt ratio of .40 and a current ratio of 1.40. Current liabilities are $990, sales are $5,170, profit margin is 9.60 percent, and ROE is 18.80 percent. What is the amount of the firm's net fixed assets? Multiple Choice $3,300.00 $1,760.00 $2,750.00 $4,004.00 $5,390.00
The amount of the firm's net fixed assets is $2,079. None of the given answer options matches this amount
To find the amount of the firm's net fixed assets, we can use the formula:
Net Fixed Assets = Total Assets - Current Assets
First, we need to determine the total assets. We can calculate the total assets using the current ratio:
Current Ratio = Current Assets / Current Liabilities
1.40 = Current Assets / $990
Current Assets = 1.40 × $990
= $1,386
Next, we can calculate the total assets using the long-term debt ratio:
Long-Term Debt Ratio = Long-Term Debt / Total Assets
0.40 = Long-Term Debt / Total Assets
Long-Term Debt = 0.40 × Total Assets
Total Assets = Long-Term Debt / 0.40
Total Assets = $1,386 / 0.40
= $3,465
Now, we can calculate the net fixed assets:
Net Fixed Assets = Total Assets - Current Assets
Net Fixed Assets = $3,465 - $1,386
= $2,079
Therefore, the amount of the firm's net fixed assets is $2,079. None of the given answer options matches this amount
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What process would you design to align compensation practices in a newly-formed, 16-hospital health care system?
A compensation practice is a crucial factor in creating a competitive compensation plan that works in favor of the organization's objectives and goals. It also ensures that the organization can retain the most skilled employees, reduce employee turnover, and boost employee productivity.
To design a compensation system that aligns with the health care system's goals and objectives, the following steps need to be followed:
Analyze the organization's needs and objectives: To start, it is necessary to have a thorough understanding of the health care system's needs, objectives, and goals. The newly-formed health care system needs to have a clear understanding of its overall goals and objectives, including the healthcare organization's short-term and long-term needs and how it can align with compensation practices. This analysis will inform the creation of a compensation strategy.
Design the compensation system: The compensation system needs to be designed to align with the health care system's objectives and goals. The system should cover all employees, including executive and non-executive staff, and it should be fair and consistent for all employees. There should be a clear job description for all positions in the health care system to ensure that employees are adequately compensated. The compensation strategy should include both monetary and non-monetary benefits.
Evaluate and adjust the compensation system: The compensation system should be evaluated regularly to ensure that it is aligned with the health care system's objectives and goals. Adjustments should be made if necessary, and feedback should be sought from employees to ensure that they are satisfied with the compensation plan. The compensation strategy should be aligned with industry standards and reflect competitive pay practices that attract and retain the best talent in the health care system.
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Discuss the key factors that impact location decisions. As an example, if locating a facility in India, what location decisions would a fast-food chain have to consider as compared to the location decisions of a software company?
Location decision is a process of determining a suitable location for a business, which requires analyzing various factors that influence the decision. Some of the key factors that impact location decisions include accessibility, cost, availability of resources, demographics, government policies, infrastructure, competition, and market demand.
The location of a business plays a critical role in its success or failure. Therefore, businesses must carefully consider location decisions as they can impact their operations, customer base, and bottom line.A fast-food chain looking to locate a facility in India would have to consider several location decisions as compared to a software company. Fast-food chains would consider accessibility, demographics, competition, infrastructure, and government policies. The following are some of the main considerations:
Accessibility: Fast-food chains need to locate their facilities in high traffic areas that are easily accessible to customers. They also need to consider the proximity of their facilities to highways and other transportation routes.
Demographics: They also need to analyze the demographics of the location, such as the population size, age group, income levels, and lifestyle. For instance, fast-food chains would prefer to locate their facilities in areas with a high population density, a significant number of young people, and a high disposable income.Competition: They also need to consider the presence of competitors in the area. If there are several fast-food chains in the area, it may not be wise to locate a new facility in the same area.
Infrastructure: They need to assess the availability of utilities, such as water, electricity, and gas, and the quality of roads, telecommunications, and other infrastructure.India has a vast population, and the fast-food industry is booming; therefore, it's a good market for international fast-food chains to enter. However, the location decision must be made wisely.Software companies, on the other hand, have different location decisions compared to fast-food chains. They would consider factors such as the availability of skilled workers, access to capital, government policies, infrastructure, and the cost of living. For instance, software companies would prefer to locate in areas with high-tech infrastructure, such as Silicon Valley in California or Bangalore in India.
In conclusion, location decisions impact the success of a business. Companies should consider various factors when deciding on a location. Factors such as accessibility, cost, demographics, competition, government policies, infrastructure, and market demand should be taken into consideration.
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1.The customary means by which a company staffs its offices is called its staffing policy. Staffing policy is greatly influenced by the extent of a firm’s international involvement. What are the three main approaches to the staffing of international business operations?
i. Ethnocentric staffing
ii. Polycentric staffing
iii. Geocentric staffing
iv. Regiocentric staffing
A.
I, III, AND IV
B.
I, II, AND IV
C.
II, III, AND IV
D.
I, II, AND III
2. The process of identifying and attracting a qualified pool of applicants for vacant positions is called recruitment. Companies can recruit internally from among their current employees or look to external sources. When recruiting employees, from where can companies attract qualified applicants?
i. Current employees
ii. Recent college graduates
iii. Local managerial talent
iv. Non-managerial workers
A.
All of mentioned
B.
I, II, AND III
C.
III AND IV
D.
I AND III
3. Which is the correct answer for elements to consider when formulating production strategies?
A.
Capacity planning - Helps a company to produce enough output to satisfy market demand.
B.
Process planning– Deciding the spatial arrangement of production processes within facilities and it depends on the type of production process a company employs.
C.
Facilities location planning - Deciding how a company will create its product and is usually determined by whether a firm uses a low-cost or differentiation strategy.
D.
Facilities layout planning – It is best when production is placed in an optimal location so that it achieves location economies.
4.
What are the functions of the foreign exchange market?
i. To convert one currency into another for individuals, companies, and governments.
ii. Used as a hedging device to insure against adverse changes in exchange rates
iii. Used to earn a profit from currency arbitrage or other interest paying security in different markets.
iv. Used to speculate about a change in the value of a currency and thereby earn a profit.
A.
All of mentioned
B.
I, III, AND IV
C.
I, II AND III
D.
II, III, AND IV
1. The three main approaches to the staffing of international business operations are Ethnocentric staffing, Polycentric staffing, and Geocentric staffing. These three approaches are described below:i. Ethnocentric staffing: It is a staffing approach that involves staffing all key management positions in an international business with parent-country nationals.
This approach is used when there is a lack of qualified local personnel or when the company wants to maintain control over its subsidiaries. ii. Polycentric staffing: It is a staffing approach that involves hiring host-country nationals to manage subsidiaries while the parent company's top management positions are filled by parent-country nationals. This approach is used when a company wants to show that it is committed to the host country.iii. Geocentric staffing: It is a staffing approach that involves hiring the best-qualified individuals from anywhere in the world, regardless of their nationality.
This approach is used when a company needs to balance the need for global integration with the need for local responsiveness. iv. Regiocentric staffing is not one of the main approaches to staffing international business operations. Therefore, the correct option is (D) i.e. I, II, AND III.2. When recruiting employees, companies can attract qualified applicants from various sources such as current employees, recent college graduates, local managerial talent, non-managerial workers, and more. Therefore, the correct option is (A) i.e. All of the mentioned.3.
The elements to consider when formulating production strategies are as follows:i. Capacity planning - Helps a company to produce enough output to satisfy market demand. ii. Process planning – Deciding the spatial arrangement of production processes within facilities and it depends on the type of production process a company employs.iii. Facilities layout planning – It is best when production is placed in an optimal location so that it achieves location economies. Therefore, the correct option is (D) i.e. Facilities layout planning – It is best when production is placed in an optimal location so that it achieves location economies.4.
The foreign exchange market performs several functions, including converting one currency into another, using it as a hedging device to insure against adverse changes in exchange rates, earning a profit from currency arbitrage or other interest-paying securities in different markets, and speculating about a change in the value of a currency to earn a profit. Therefore, the correct option is (A) i.e. All of the mentioned.
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Imprudential, Inc., has an unfunded pension liability of $769 million that must be paid in 10 years. To assess the value of the firm’s stock, financial analysts want to discount this liability back to the present. If the relevant discount rate is 6 percent, what is the present value of this liability? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
The present value of the unfunded pension liability is $513,736,972.09.
To calculate the present value of the unfunded pension liability, we need to discount the future payment of $769 million back to the present using the relevant discount rate of 6 percent over a period of 10 years.
The present value can be calculated using the formula: PV = FV / (1 + r)^n, where PV is the present value, FV is the future value, r is the discount rate, and n is the number of years.
Plugging in the values, we have PV = 769 million / (1 + 0.06)^10.
Using a calculator or spreadsheet, we can calculate the present value to be $513,736,972.09.
Therefore, the present value of the unfunded pension liability is $513,736,972.09.
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1. Describe the types of financial ratios and other financial performance measures that are used during a venture’s successful life cycle. Who are the users of financial performance measures?
2. What are financial ratios and why are they useful?
3. What are the three types of comparisons that can be made when conducting ratio analyses?
4. What are the meanings of the terms "cash build" and "cash burn"? How do we calculate net cash burn rates?
5. How is the current ratio calculated and what does it measure? How does the quick ratio differ from the current ratio?
6. Describe how a firm’s net working capital (NWC) is measured and how the NWC-to-total- assets ratio is calculated. What does this ratio measure?
7. What is meant by a venture’s operating cycle? Also, describe the cash conversion cycle (C3)
8. What are the three components of the cash conversion cycle (C3)? How is each component calculated?
9. Briefly explain how changes in the conversion times of the components of the(C3) can be interpreted.
10. What is the meaning of leverage ratios? What are typical ratios used for relating total debt to a venture’s assets and/or its equity?
1. Types of financial ratios and other financial performance measures Financial ratios and other financial performance measures that are used during a venture’s successful life cycle include:
Ratio of gross margin to sales Ratio of operating income to sales Inventory turnover Accounts receivable turnover Net income and cash flows Return on investment (ROI)User of financial performance measures are; Entrepreneurs Creditors Bankers Venture capital is t Investors Lenders Analysts Regulators
2. Financial ratios and their usefulness Financial ratios are tools used by financial analysts and investors to measure a company’s overall financial health and operational efficiency. These ratios are useful as they provide relevant information for assessing a company’s creditworthiness, profitability, liquidity, and solvency.
3. Types of comparison that can be made when conducting ratio analyses There are three types of comparisons that can be made when conducting ratio analyses, and they are: Trend analysis, industry comparison, and peer group comparison.
4. Meanings of the terms "cash build" and "cash burn"; How to calculate net cash burn rates Cash build is the amount of money left over after cash inflows have exceeded cash outflows, while cash burn refers to the rate at which a company is losing money. Net cash burn rate is the difference between the amount of cash used and the amount of cash generated during a particular period of time. It is calculated by subtracting the cash inflows from the cash outflows.
5. How the current ratio is calculated and what it measures; How does the quick ratio differ from the current ratio The current ratio is calculated by dividing current assets by current liabilities and it measures a company's ability to pay its short-term debts and obligations. The quick ratio is a more conservative measure of liquidity as it only considers highly liquid assets like cash and marketable securities to pay off immediate liabilities.
6. How a firm’s net working capital (NWC) is measured, and how the NWC-to-total-assets ratio is calculated; What this ratio measuresA company’s net working capital (NWC) is calculated by subtracting its current liabilities from its current assets. The NWC-to-total-assets ratio is calculated by dividing net working capital by total assets, and it measures the percentage of a company’s assets that are financed by its working capital.
7. Meaning of a venture’s operating cycle; Cash conversion cycle (C3) description The operating cycle of a venture refers to the period of time between purchasing raw materials and the sale of the final product. The cash conversion cycle (C3) is a metric that measures the length of time it takes for a venture to convert its investments in inventory and other resources into cash flow. It measures how long it takes for a company to recover its investment in inventory, from the time the inventory is purchased until the time the cash is received from its sale.
8. Components of the cash conversion cycle (C3) and how to calculate them The three components of the cash conversion cycle (C3) are Days Inventory Outstanding (DIO), Days Sales Outstanding (DSO), and Days Payable Outstanding (DPO).DIO is calculated as (Inventory/Cost of goods sold) × 365DSO is calculated as (Accounts receivable / Total credit sales) × 365DPO is calculated as (Accounts payable / Cost of goods sold) × 3659.
How changes in the conversion times of C3 components can be interpreted Changes in the conversion times of the C3 components can be interpreted as follows: Decreasing DIO indicates better inventory management. Decreasing DSO indicates better credit and collection management. Decreasing DPO indicates better payment management.
10. Meaning of leverage ratios; Typical ratios used for relating total debt to a venture’s assets and/or its equity Leverage ratios measure the amount of debt a company has relative to its equity. The typical ratios used for relating total debt to a venture’s assets and/or its equity are the debt-to-equity ratio, the debt-to-total assets ratio, and the equity multiplier.
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You are considering investing in a stock. You believe that the economy over the next year will be either in recession, will achieve average growth or will be a booming economy. The following table shows the probability of each state of the economy and the return on the stock given the state of the economy. What is the expected return on the stock?
Economy probability return
Recession 20% -6,5%
Average growth 45% 5.3%
Booming 35% 10.8%
a. 6.69% b. 4.87% c. 2.06% d. 4.41%
The expected return on the stock is approximately 4.87% based on the given probabilities and returns for each state of the economy (option b).
To calculate the expected return on the stock, we multiply the return for each state of the economy by its respective probability, and then sum them up.
- Return during recession: -6.5% * 20% = -1.3%
- Return during average growth: 5.3% * 45% = 2.385%
- Return during booming economy: 10.8% * 35% = 3.78%
Expected Return = -1.3% + 2.385% + 3.78% = 4.865%
Therefore, the expected return on the stock is approximately 4.87%. The correct answer is option b. 4.87%.
This represents the average return that can be expected based on the probabilities and returns associated with each state of the economy.
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A car is purchased for $35 000. It decreases in value by 12% each year. a. Determine an equation for value (V) of the car over time (t) in years it is owned. Equation: b. How much will the car be worth after 5 years?
a) An equation for value (V) of the car over time (t) in years it is owned is $35 000(0.88)^t. b) The car will be worth $17 428.99 after 5 years.
a) To find the equation for value of the car over time it is owned, we can use the formula
V(t) = V0(1-r)^tWhere V0 is the initial value of the car, r is the percentage decrease in value per year, t is the number of years owned.
V0 = $35 000r = 12% = 0.12 (as a decimal)
Thus, the equation for value of the car over time is:
V(t) = $35 000(1-0.12)^t
Simplifying the above equation we get, V(t) = $35 000(0.88)^t
Thus, the required equation is V(t) = $35 000(0.88)^t.
b) After 5 years, the car would have been owned for t = 5 years.
Substituting t = 5 in the above equation we get,
V(5) = $35 000(0.88)^5V(5) = $35 000(0.49787136)≈ $17 428.99
Thus, the car would be worth approximately $17 428.99 after 5 years.
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Derek plans to retire on his 65th birthday. However, he plans to work part-time until he turns 73.00. During these years of part-time work, he will neither make deposits to nor take withdrawals from his retirement account. Exactly one year after the day he turns 73.0 when he fully retires, he will wants to have $3,165,628.00 in his retirement account. He he will make contributions to his retirement account from his 26th birthday to his 65th birthday. To reach his goal, what must the contributions be? Assume a 7.00% interest rate.
Derek plans to retire on his 65th birthday. However, he plans to work part-time until he turns 71.00. During these years of part-time work, he will neither make deposits to nor take withdrawals from his retirement account. Exactly one year after the day he turns 71.0 when he fully retires, he will begin to make annual withdrawals of $182,124.00 from his retirement account until he turns 89.00. He he will make contributions to his retirement account from his 26th birthday to his 65th birthday. To reach his goal, what must the contributions be? Assume a 4.00% interest rate.
Derek plans to retire on his 65th birthday. However, he plans to work part-time until he turns 75.00. During these years of part-time work, he will neither make deposits to nor take withdrawals from his retirement account. Exactly one year after the day he turns 75.0 when he fully retires, he will begin to make annual withdrawals of $156,500.00 from his retirement account until he turns 85.00. After this final withdrawal, he wants $1.93 million remaining in his account. He he will make contributions to his retirement account from his 26th birthday to his 65th birthday. To reach his goal, what must the contributions be? Assume a 9.00% interest rate.
1. Derek plans to retire on his 65th birthday. However, he plans to work part-time until he turns 73.0. During these years of part-time work, he will neither make deposits to nor take withdrawals from his retirement account.
Exactly one year after the day he turns 73.0 when he fully retires, he will want to have $3,165,628.00 in his retirement account. He will make contributions to his retirement account from his 26th birthday to his 65th birthday. Assume a 7.00% interest rate.
Given: The retirement account is compounded at 7.00% and he plans to retire at 73.0 and have $3,165,628.00 in his retirement account. He makes contributions to his retirement account from his 26th birthday to his 65th birthday.
Calculate the total amount of time he makes deposits into his retirement account. Total deposit periods = 65 - 26 = 39 years The future value of his retirement account at 73 years old (one year after the day he turns 73.0) is equal to the present value of all his deposits for 39 years at 7.00% compounded annually, plus the present value of a single payment of $3,165,628.00 one year later.
Using the future value formula: 3,165,628.00 = A(1+0.07)^39 + PV(1+0.07)^40 where A is the annual deposit and PV is the present value of $3,165,628.00Thus, 3,165,628.00 = A(1.07^39) + PV(1.07^40) ----(1)
Since Derek will neither make deposits to nor take withdrawals from his retirement account during these years of part-time work (from 73 to 74), the account balance at 74 will be the same as the balance at 73, which is $3,165,628.00.
Therefore, the present value of the $3,165,628.00 is (1/1.07) * $3,165,628.00 = $2,962,635.76
Using this value in equation (1), 2,962,635.76 = A(1.07^39) + 0Solve for A in equation (1) to find his annual deposit: A = $26,479.92 (rounded to the nearest cent)
Thus, Derek must deposit $26,479.92 annually from his 26th birthday to his 65th birthday at 7.00% compounded annually to achieve his retirement goal. Answer: $26,479.92.
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Patricia Johnson, a recent graduate of Ceradyne University's accounting program, evaluated the operating performance of Windsor Company's six divisions. Patricia made the following presentation to Windsor's board of directors and suggested the Erie division be eliminated. "If the Erie division is eliminated," she said, "our total profits would increase by $24,500." The Other Five Divisions Erie Division Total Sales $1,663,000 $100,800 $1,763,800 Cost of goods sold 978,500 77,000 1,055,500 Gross profit 684,500 23,800 708,300 Operating expenses 526,000 48,300 574,300 Net income $158,500 $(24,500) $134,000 In the Erie division, the cost of goods sold is $60,500 variable and $16,500 fixed, and operating expenses are $15,500 variable and $32,800 fixed. None of the Erie division's fixed costs will be eliminated if the division is discontinued. Is Patricia right about eliminating the Erie Division? Prepare a schedule to support your answer. (If an amount reduces the net income then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000).) Net Inc Continue Eliminate (De Sales $ $ $ Variable costs Contribution margin Fixed costs Net income (loss) $ $
If the Erie division is eliminated, the company's net income would decrease by $8,800 ($110,200 - $101,400) rather than increase by $24,500 as suggested by Patricia. Thus, Patricia is not correct about eliminating the Erie division.
To determine whether Patricia is right about eliminating the Erie division, we need to prepare a contribution margin income statement for both scenarios:
Contribution Margin Income Statement - Continue Erie Division:
Sales Variable Costs Contribution Margin
Other Five Divisions $1,663,000 $978,500 $684,500
Erie Division $100,800 $60,500 $40,300
Total $1,763,800 $1,039,000 $724,800
Contribution Margin Income Statement - Eliminate Erie Division:
Sales Variable Costs Contribution Margin
Other Five Divisions $1,763,000 $1,038,000 $725,000
Total $1,763,000 $1,038,000 $725,000
To calculate the fixed costs, we subtract the variable costs from the total costs:
Erie Division Fixed Costs = $16,500 + $32,800 = $49,300
Next, we can compare the net incomes under both scenarios:
Net Income (Continue Erie Division) = $684,500 - $574,300 = $110,200
Net Income (Eliminate Erie Division) = $725,000 - $574,300 - $49,300 = $101,400
Therefore, if the Erie division is eliminated, the company's net income would decrease by $8,800 ($110,200 - $101,400) rather than increase by $24,500 as suggested by Patricia. Thus, Patricia is not correct about eliminating the Erie division. The Erie division should be continued as its sales contribute to the company's overall profits, and eliminating it will result in a decrease rather than an increase in net income.
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Which of the following is not a liability account?
Group of answer choices
Prepaid rent expense
Unearned revenue
All of the above are liability accounts
Accounts payable
"Prepaid rent expense" is not a liability account. The other options, "Unearned revenue," "Accounts payable," and "All of the above are liability accounts," are indeed liability accounts.
Liability accounts represent obligations or debts owed by a company. They are recorded on the balance sheet and reflect the company's financial obligations. "Unearned revenue" is a liability account that represents the amount received in advance for goods or services that are yet to be delivered. "Accounts payable" is another liability account that represents the company's outstanding debts to suppliers or creditors.
On the other hand, "Prepaid rent expense" is not a liability account but rather an asset account. It represents the advance payment made for rent expenses that will be recognized as an expense over time.
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12 sentences please Describe critical issues in distribution and transportation.
Distribution and transportation encompass a range of critical issues that can significantly impact businesses and supply chains.
Here are 12 sentences describing some of these key issues:
Logistics Management: Efficiently managing the movement of goods from manufacturers to consumers is crucial for maintaining a smooth distribution process.
Supply Chain Visibility: Lack of visibility and real-time tracking can lead to delays, inventory management challenges, and customer dissatisfaction.
Transportation Costs: Rising fuel prices, fluctuating tariffs, and increasing labor costs can impact transportation expenses, affecting profit margins.
Infrastructure Constraints: Insufficient transportation infrastructure, such as road congestion or inadequate ports, can hinder the timely delivery of goods.
Last-Mile Delivery: The final stage of delivery to end consumers can be complex and costly, with challenges including time constraints and customer preferences.
Environmental Impact: Transportation contributes to carbon emissions and environmental degradation, making sustainability a pressing concern in distribution.
Regulatory Compliance: Businesses must navigate a complex web of regulations and compliance requirements related to transportation, such as customs regulations and safety standards.
Inventory Management: Balancing inventory levels to meet demand while minimizing costs and storage requirements is a critical challenge in distribution.
Reverse Logistics: Managing product returns, repairs, and recycling processes presents unique challenges, requiring efficient reverse logistics strategies.
Global Supply Chains: International distribution involves navigating customs procedures, import/export regulations, cultural differences, and longer transit times.
Risk Management: Transportation disruptions, such as natural disasters or labor strikes, can disrupt supply chains, emphasizing the need for contingency plans and risk mitigation strategies.
Technology Integration: Leveraging technology, such as transportation management systems (TMS) and real-time tracking, is vital for optimizing distribution and transportation processes.
These critical issues highlight the multifaceted nature of distribution and transportation, requiring businesses to address them strategically to ensure smooth operations and customer satisfaction.
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Soap Makers International
Several years ago, Ingrid Krause wanted some international expertise and applied for a transfer to her company’s soap division, which is located south of Warsaw, Poland. The soap division manufactures hand soap for use in a large number of settings, from hospitals to luxury hotels. Ingrid was awarded the transfer to the soap division and was assigned to the accounting department. She is responsible for overseeing the costing and probability analysis of the various soaps and soap-making processes. During her tenure in the soap division, there were numerous changes in the number of soaps manufactured and the processes to make the different soaps. Consequently, Ingrid’s position required her to consider changes in the accounting processes to reflect the changes in the soap division’s business.
For several decades, the company’s soap-making process required a large labour force that manufactured and packaged the soap mainly by hand. Local economic changes meant that the labour force that the factory required was not as available as it had been in the past. As a result, the division was experiencing slower processing time, and more snap being rejected during inspections because of quality concerns. To address the issues related to the lack of labour availability, the division’s management decided three years ago that automation was the way to go. Consequently, over the last three years, the soap making processes have changed with the implementation of automation.
The automation of the soap making processes have allowed for a much larger variety of soap and packing, a reduced direct labour force and direct labour costs, and a higher level of traceability of costs to the various soaps because of technological improvements. Soaps made for industrial applications require different ingredients, less time in processing, less time in finishing, and less time in and cheaper packaging than do soaps for the hotel industry. The costs of materials and packaging are directly traceable to the various types of soaps through new software that uses bar codes and counters to trace material costs to the various soaps directly.
Ingrid feels that the current costing system should be revisited. The cost driver for allocation of the overhead costs (such as supervisory salaries and plant utilities) have always been direct labour hours cost. However, given the decline in the use of labour due to automation, Ingrid is questioning its suitability as a basis of allocation. Ingrid would like to explore activity based costing to allocate overhead costs.
Ingrid has gathered cost data for two representative soaps: one sold to hospitals and one sold to hotels. Further, Ingrid has gathered data from the automated system on the amount of time each type of soap spends in the three manufacturing processes: processing, finishing, and packaging. The soap is produced in large batches, consequently, the data are adjusted to reflect the average cost per 100g of soap. The data for type of soap for one month’s production are in Exhibit 1.
REQUIRED
Calculate the costs (of direct material, direct labour, and overhead) for each of the two representative types of soap using and ABC approach for the allocation of manufacturing costs.
EXHIBIT 1 – COSTS FOR ONE MONTH’S PRODUCTION OF SOAP
Cost Components
Total
Costs Per 100 g of soap
Industrial Soap (Hospital)
Luxury Soap (Hotel)
Direct Materials
$4.000,000
$0.40
$0.80
Packaging
$2,000,000
$0.10
$0.60
Direct Labour
$750,000
$0.14
$0.15
Manufacturing
$5,000,000
Processing
$2,500,000
Finishing
$1,500,000
Packaging
$1,000,000
EXHIBIT 2 – TIME REQUIRED FOR ONE MONTH’S PRODUCTION OF SOAP
Time Components
Total
Time per 100 g of soap
Industrial Soap (Hospital)
Luxury Soap (Hotel)
Processing
750,000 seconds
0.2 second
0.4 second
Finishing
300,000 seconds
0.03 second
0.4 second
Packaging
100,000 seconds
0.006 second
0.5 second
Using the activity-based costing (ABC) approach, the costs for each type of soap can be calculated by allocating the manufacturing costs based on the time required for each manufacturing process.
Ingrid Krause, an accountant at Soap Makers International's soap division, is considering implementing activity-based costing (ABC) to allocate overhead costs. The division recently underwent automation in its soap-making processes, resulting in changes in production, labor force, and cost traceability. Ingrid believes that the current costing system, which allocates overhead costs based on direct labor hours, may no longer be appropriate due to decreased labor usage. She has collected cost and time data for two representative soaps: one for hospitals and one for hotels. The costs per 100g of soap and the time required for each manufacturing process are provided in Exhibit 1 and Exhibit 2, respectively.
To calculate the costs for each soap using the ABC approach, the overhead costs need to be allocated based on cost drivers related to the activities performed. In this case, the time required for each manufacturing process can serve as a suitable cost driver. By multiplying the time per 100g of soap for each process by the total manufacturing overhead cost, the overhead costs can be allocated proportionally to the soap types. The direct material and direct labor costs can be allocated directly based on the costs per 100g provided in Exhibit 1. Using this approach, the total costs for each soap can be determined, considering the costs of direct materials, direct labor, and overhead allocated based on the ABC approach.
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Which of the following sets of Bid-Ask rates does not allow for Locational Arbitrage? JP Morgan Chase - EUR/CNY Bid 7.5652 Ask 7.6677… Bank of America Bid EUR/CNY 7.5991 Ask 7.6823 JP Morgan Chase - JPY/CNY Bid 0.05522 Ask 0.05687… Bank of America JPY/CNY Bid 0.05811 Ask 0.05912 JP Morgan Chase - GBP/CNY Bid 8.8871 Ask 8.9634⋯ Bank of America GBP/CNY Bid 8.7213 Ask 8.7744 JP Morgan Chase - USD/CNY Bid 6.565 Ask 6.623⋯ Bank of America USD/CNY Bid 6.373 Ask 6.442
The set of Bid-Ask rates that does not allow for Locational Arbitrage is JP Morgan Chase - JPY/CNY Bid 0.05522 Ask 0.05687... Bank of America JPY/CNY Bid 0.05811 Ask 0.05912.
Locational Arbitrage is a strategy in which traders take advantage of the price differences between markets. To determine if there is an opportunity for Locational Arbitrage, we compare the bid and ask rates for the same currency pair at different banks. If there is a possibility to buy at a lower rate and sell at a higher rate, then Locational Arbitrage is possible.
In this case, the bid rate for JPY/CNY at JP Morgan Chase is 0.05522, while Bank of America's bid rate is 0.05811. Since JP Morgan Chase has the lower bid rate, it is not possible to buy at a lower rate from one bank and sell at a higher rate to the other bank. Hence, there is no opportunity for Locational Arbitrage in this set of rates.
The set of Bid-Ask rates for JPY/CNY between JP Morgan Chase and Bank of America does not allow for Locational Arbitrage as the bid rate is lower at JP Morgan Chase than at Bank of America.
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4. Direct Claims and Complaints
In business, a message written to right a wrong is called a claim. Straightforward claims are those where the receiver is expected to readily agree with your message. These claims require a direct approach. To be an effective business communicator, you should familiarize yourself with the best practices for making direct claims and voicing complaints.
What should you include in the opening of a direct claim message?
A clear statement of the problem
An explanation of the problem followed by a threat
A justification of your request
When a customer has a legitimate claim, the customer can expect a ______________
positive?
neutral?
defensive?
response from the company.
Read the scenario, and then answer the following question.
Dmitri is preparing a direct claim message. His bank account has been incorrectly debited a duplicate charge of $132.45 for a pair of hockey skates. He needs to contact the retail store immediately and have the duplicate amount refunded.
Which would be the best closing for Dmitri’s message?
Please authorize a credit refund immediately, and send an electronic confirmation of the transaction to the address below. I am enjoying my new skates and look forward to shopping at your store again.
I hope that something like this never happens to you. Your organization is completely unprofessional. I will never shop there again.
I expect that the money will appear in my account. I will track it daily and inform you if there is any problem. My lawyer is on retainer and would be happy to contact you if you fail to comply with my request.
Social media experts suggest that you use other means of communicating claims or complaints before turning to social media. Messages received through other channels are more likely to be addressed by the business, and social media presents a higher risk of your message getting into the wrong hands or becoming a legal issue. However, if you do use social media to convey a complaint or review, you should adhere to some basic guidelines.
Which tips should you follow when posting a complaint or review online? Check all that apply.
Offset criticism with positives.
Do not include suggestions or negative comments in positive reviews.
Make your comment clean, polite, and to the point.
Ignore a business’s offer to discuss your post.
Refuse payment for positive comments.
In the opening of a direct claim message, you should include a clear statement of the problem. This helps to immediately communicate the issue to the receiver. A justification of your request can also be included, but it is not necessary in the opening.
For Dmitri's message, the best closing would be: "Please authorize a credit refund immediately, and send an electronic confirmation of the transaction to the address below. I am enjoying my new skates and look forward to shopping at your store again." This closing is polite and clear, expressing the desired resolution while maintaining a positive tone.
When posting a complaint or review online, you should follow these tips:
- Offset criticism with positives. This helps to provide a balanced perspective.
- Make your comment clean, polite, and to the point. This ensures that your message is respectful and easy to understand.
- Do not include suggestions or negative comments in positive reviews. This helps to keep your feedback focused and separate from positive experiences.
- Ignore a business's offer to discuss your post. Engaging in discussions about your post may not be productive.
- Refuse payment for positive comments. It is important to maintain honesty and integrity in your reviews and not accept payment for positive feedback.
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alpha a = 5, beta B = 10
Q1. Suppose MPC is 0.8. If government purchases increases by $10% and cuts taxes by $503, how much the equilibrium output is changed?
The amount of equilibrium output that is changed thanks to the increase in equilibrium output is $440
How to find the change in equilibrium output ?To determine the change in equilibrium output, we need to calculate the multiplier effect of the fiscal policy changes.
Given:
MPC = 0.8
Change in equilibrium output = MPC * (Change in government purchases + Change in taxes)
= 0.8 * (10 * alpha + 50 * beta)
= 0.8 * (10 * 5 + 50 * 10)
= 0.8 * 600
= 480
The total increase in spending is:
= $40 + $400
= $440
This will lead to an increase in equilibrium output of $440.
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A company looking to improve its management of receivables would do which of the following? OA give risky customers extra time to pay. B. allow customers to determine when payments are due. OC. have customers provide references from banks or suppliers. OD. only check the financial health of customers when they make their first purchase.
The correct option for improving receivables management would be:
OC. Have customers provide references from banks or suppliers.
Having customers provide references from banks or suppliers can help the company assess the creditworthiness and financial stability of the customers before extending credit terms. This can reduce the risk of default or late payments and improve overall receivables management.
The other options mentioned (OA, B, OD) would not be effective strategies for improving receivables management:
A. Giving risky customers extra time to pay would increase the likelihood of late payments or default, and it would not be an effective approach to managing receivables.
B. Allowing customers to determine when payments are due would result in a lack of control over the timing of payments, potentially leading to delays or inconsistencies in cash flow.
D. Only checking the financial health of customers when they make their first purchase would neglect the ongoing assessment of creditworthiness, which is important for managing receivables effectively.
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Sell or Process Further: Radar has 40,000 units of partially finished product Q. Processing costs to date are $30,000. The 40,000 unfinished units can be sold as is, for $50,000 or they can be processed further to produce finished products X,Y, and Z. Processing the units further will cost an additional $80,000 and will yield total revenues of $150,000. Radar must decide whether the added revenues from selling finished products X,Y, and Z, exceed the costs of finishing them. Provide recommendations to Radar
The advice to Radar would be to continue with processing the gadgets further to supply finished merchandise X, Y, and Z, as it will result in higher net blessings.
Based on the given records, Radar has alternatives: selling the partially finished product as is or processing it in addition to providing finished products X, Y, and Z.
To make a choice, we need to evaluate the financial outcomes of every alternative.
Selling the in-part completed product:
Revenue: $50,000
Cost: $30,000 (processing prices to date)
Net Benefit: $20,000
Processing the devices similarly:
Revenue: $150,000
Cost: $30,000 (processing prices up to now) + $80,000 (additional processing expenses)
Net Benefit: $150,000 - $110,000 = $40,000
Comparing the net advantages, we are able to see that processing the gadgets similarly yields a better benefit of $40,000 in comparison to promoting them as is with a benefit of $20,000.
Therefore, the advice to Radar would be to continue with processing the gadgets in addition to supplying finished merchandise X, Y, and Z, as it will bring about higher net blessings.
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