The statement that a monopoly firm increases output until marginal revenue exceeds marginal cost to maximize profit is false.
false.
to maximize profit, a monopoly firm does not increase output until marginal revenue exceeds marginal cost. in fact, a monopoly firm maximizes its profit by producing the quantity of output where marginal revenue (mr) equals marginal cost (mc).
in a monopoly, the demand curve for the firm's product is downward sloping, meaning that as the firm increases its output, it must lower the price to sell additional units. consequently, marginal revenue is always less than the price of the good. in a monopoly, marginal revenue is also downward sloping and lies below the demand curve.
to determine the profit-maximizing level of output, a monopoly firm compares the marginal revenue it receives from selling an additional unit with the marginal cost of producing that unit. the firm will continue to produce additional units as long as the marginal revenue exceeds the marginal cost. however, the profit-maximizing level occurs where marginal revenue equals marginal cost, not where marginal revenue exceeds marginal cost.
at the profit-maximizing level, a monopoly firm charges a price that is higher than the marginal cost of production, resulting in a markup or price above the firm's cost. this markup allows the monopoly to earn positive economic profits. the profit-maximizing condition for a monopoly is mr = mc.
Learn more about revenue here:
https://brainly.com/question/14952769
#SPJ11
The worst way to help national debt
A© trade barriers
B. none of the above
C. taxes
D. tariffs
The worst way to help national debt among the given s is:B. none of the above
Trade barriers ( A), taxes ( C), and tariffs ( D) can all potentially contribute to government revenue and affect the national debt in different ways.
without more context or specific information, it is not possible to determine which is the worst or most effective for addressing national debt. Each has its own pros and cons, and the effectiveness of any policy measure depends on various factors such as the country's economic situation, trade relationships, and fiscal policies.
Option B, "none of the above," implies that there is no provided that is considered the worst way to help national debt. It suggests that the s listed may not necessarily be the most effective or appropriate approaches for addressing national debt, but it does not explicitly state an alternative or better solution.
Learn more about revenue here:
https://brainly.com/question/14952769
#SPJ11
What are key characteristics of economies of scale in digital
goods?
Some of the key characteristics of economies of scale in digital goods are reduced cost, increased efficiency, and higher productivity.
Economies of scale in digital goods refer to the cost advantage that businesses gain when they increase their production levels. Some of the key characteristics of economies of scale in digital goods are reduced cost, increased efficiency, and higher productivity. When businesses produce digital goods in large quantities, they benefit from lower production costs per unit. Additionally, when production is increased, fixed costs can be spread over a larger quantity of goods, reducing the cost per unit.
This makes digital goods more affordable for consumers, leading to higher demand and further reductions in costs. Furthermore, digital production can lead to increased efficiency in production processes as technology improves, making it easier to produce goods at a faster rate. This leads to higher productivity levels and faster delivery times, which can further enhance the cost advantage of economies of scale.
To know more about the Economies visit:
https://brainly.com/question/28026986
#SPJ11
Which of the following would result in a lower absolute value of the price elasticity of demand for a product? a. wide variety of substitutes available for the good b. long time period considered c. the expenditure on the good small relative to one's budget d. the good is a luxury item 10. Which of the following statements regarding the price elasticity of demand is NOT a. A demand for a good is considered unitary elastic if the price elasticity in absolute value is correct: equal to one. Based on the law of demand the price elasticity of demand can be either positive or negative. It measures the change in quantity demanded when there is a change in the price of the product. If the demand for a good is elastic, increase in the price of the good will lead to a decrease in the total revenue. b. c. d. 11. If the price elasticity of supply for Minute Maid lemonade is 2.0, what will happen to the quantity of Minute Maid lemonade that is supplied if the price increases by 20%? a. The quantity supplied will increase by 40%. b. The quantity supplied will increase by 10%. c. The quantity supplied will increase by 0.1%. d. The quantity supplied will decrease by 10%. 12. In order to prove that video games and a game console are complements in and get a consumption, one should measure the a. price elasticity of demand; number greater than 1 (in absolute value) b. price elasticity of demand; number less than 1 (in absolute value) c. cross-price elasticity; positive number d. cross-price elasticity; negative number
To result in a lower absolute value of the price elasticity of demand for a product, the correct option is c. The expenditure on the good is small relative to one's budget.
Regarding the price elasticity of demand, the statement that is NOT correct is a. A demand for a good is considered unitary elastic if the price elasticity in absolute value is equal to one.
The price elasticity of demand measures the responsiveness of quantity demanded to changes in price. A lower absolute value of elasticity indicates a less sensitive demand. When the expenditure on a good is small relative to one's budget (option c), consumers are less likely to be highly responsive to price changes. Therefore, the price elasticity of demand would be lower compared to cases where the expenditure on the good is significant.
The statement that is NOT correct regarding the price elasticity of demand is a. A demand for a good is considered unitary elastic if the price elasticity in absolute value is equal to one. Unitary elastic demand occurs when the percentage change in quantity demanded is equal to the percentage change in price, resulting in an elasticity of exactly one. However, the statement incorrectly states that the price elasticity of demand can be either positive or negative. In reality, price elasticity is always expressed as a positive value, regardless of whether demand is elastic (>1), inelastic (<1), or unitary (=1).
It is important to understand the concepts of price elasticity of demand and supply to make informed decisions regarding pricing, market analysis, and understanding consumer behavior. These concepts help businesses and policymakers understand the sensitivity of demand and supply to changes in price and make appropriate strategic decisions.
Learn more about elasticity here:- brainly.com/question/30999432
#SPJ11
Limitations of Electronic Business can be categorisedas technical and non-technical. Using an organisationof your choice, identify and explain three (3) technicaland non-technical challenges each associated withdoing business online.
Organization: XYZ Retail Company
Technical Challenges:
Website Security: XYZ Retail Company faces the technical challenge of ensuring robust security measures to protect customer data and prevent unauthorized access, hacking attempts, and data breaches on their e-commerce website. This requires implementing encryption protocols, firewalls, and continuously monitoring for vulnerabilities to maintain customer trust and protect sensitive information.
Maintaining website security is crucial for any online business. XYZ Retail Company needs to invest in state-of-the-art security infrastructure and stay updated with the latest security practices to prevent cyber threats and protect customer data. They must regularly perform vulnerability assessments, penetration testing, and implement strong authentication mechanisms to safeguard their e-commerce platform. Failure to address these security challenges can lead to significant financial and reputational damage.
Scalability and Performance: As XYZ Retail Company grows its online presence, it faces the technical challenge of ensuring the scalability and performance of its e-commerce platform. Handling increasing customer traffic, managing inventory, and processing transactions efficiently require robust infrastructure and optimized software architecture to deliver a seamless user experience.
Explanation: As the number of customers and transactions increases, XYZ Retail Company must have the technical capacity to handle the growing demand. They need to invest in scalable hosting solutions, load balancing mechanisms, and efficient database management systems. Failing to address these scalability and performance challenges can result in website crashes, slow page loading times, and a poor customer experience, leading to lost sales opportunities and customer dissatisfaction.
Integration and Interoperability: XYZ Retail Company faces the technical challenge of integrating their e-commerce platform with various backend systems, such as inventory management, order processing, and customer relationship management (CRM). Ensuring smooth data flow and interoperability between these systems is essential for efficient operations and seamless customer experiences.
To streamline business processes, XYZ Retail Company needs to integrate their e-commerce platform with internal systems and third-party applications. This involves establishing APIs (Application Programming Interfaces) and data synchronization mechanisms to enable real-time information exchange. Failing to address these integration and interoperability challenges can result in inefficient manual processes, data inconsistencies, and delays in order fulfillment, impacting customer satisfaction and operational efficiency.
Learn more about retail here: brainly.com/question/31326848
#SPJ11
monopolistic competitive firms will earn economic profits in the long run because of their ability to control the price of the product.T/F
Monopolistic competitive firms do not typically earn economic profits in the long run due to competition and the absence of significant barriers to entry.
false..
monopolistic competitive firms will not typically earn economic profits in the long run due to their ability to control the price of the product. in monopolistic competition, there is product differentiation, meaning each firm offers a slightly differentiated product or service. this differentiation allows firms to have some control over the price of their products, but it does not guarantee sustained economic profits.
in the long run, entry barriers in monopolistic competition tend to be relatively low, meaning new firms can enter the market and offer similar or substitute products. this increased competition can erode any economic profits that existing firms may have initially enjoyed.
as new firms enter the market, the demand for existing firms' products becomes more elastic, reducing their ability to control prices and generate economic profits. in the long run, firms in monopolistic competition tend to operate at a point where their average revenue equals their average total cost, resulting in zero economic profits.
Learn more about competitive here:
https://brainly.com/question/30109639
#SPJ11
Barack Obama Company has the following stockholders’ equity accounts at December 31, Year 7:
Common stock ($100 par value) $480,000
Retained earnings 294,000
Instructions:
Prepare journal entries to record the following transactions, which took place in Year 8:
A. 280 shares of outstanding stock were purchased at $97 per share; these shares are to be
accounted for using the cost method;
B. A $20 per share cash dividend was declared;
C. The dividend declared in #2 above was paid;
D. The treasury stock purchased in #1 above was reissued at $102 per share;
E. 500 shares of outstanding stock were purchased at $105 per share;
F. 350 of the shares purchased in #5 above were reissued at $96 per share.
Journal entries to record the following transactions, which took place in Year 8, are as follows:
A. 280 shares of outstanding stock were purchased at $97 per share; these shares are to be accounted for using the cost method;
Accounting equation is Assets = Liabilities + Equity
Here, Treasury stock is considered a contra-equity account, so a decrease in Treasury stock will increase equity. Hence, the following entry is recorded:
Treasury Stock A/C... Debit = 280 * $97
= $27,160
Cash A/c ………………………… Credit = $27,160B.
A $20 per share cash dividend was declared. The company declared a cash dividend to its shareholders.
The company has to record the following journal entry: Retained Earnings A/C Debit = 20 * 480
= $9,600
Dividend Payable A/c ………. Credit = $9,600C.
The dividend declared in #2 above was paid;
When the dividend is paid to the shareholders, the following journal entry is recorded:
Dividend Payable A/c ………. Debit = $9,600
Cash A/c ………………………… Credit = $9,600D.
The treasury stock purchased in #1 above was reissued at $102 per share;
Now the Treasury stock is sold, so the following journal entry is recorded:
Cash A/c ………………………… Debit = 280 * $102
= $28,560
Treasury Stock A/c ………… Credit = 280 * $97
= $27,160
Gain on Sale of Treasury Stock A/c …… Credit = $1,400
500 shares of outstanding stock were purchased at $105 per share. Now, the company has purchased the outstanding shares.
The following journal entry is recorded:
Treasury Stock A/c ….. Debit = 500 * $105
= $52,500
Cash A/c ………………………… Credit = $52,500F. 350 of the shares purchased in
#5 above was reissued at $96 per share. The following entry is recorded when the shares are reissued:
Cash A/c ………………………… Debit = 350 * $96
= $33,600
Treasury Stock A/c ……….. Credit = 350 * $105
= $36,750
Loss on Sale of Treasury Stock A/c ……. Debit = $3,150
Hence, the total value of the entries on the debit side will be equal to the total value of the entries on the credit side.
In the end, the balance sheet equation must be balanced. Therefore, the accounting equation should be in balance after each transaction.
To know more about liabilities, visit:
https://brainly.com/question/30805836
#SPJ11
LaVine Corp. had 1,000,000 shares of common stock outstanding throughout 2021.
On October 1, 2021, LaVine issued $15 million of ten year, 5% bonds. Beginning October 1, 2023, bondholders may exercise a conversion privilege to convert the bonds into 375,000 shares of LaVine common stock.
During 2021, LaVine reported $8,000,000 of net income and paid $300,000 in preferred dividends.
LaVine's marginal income tax rate is 25%.
What is LaVine's 2021 diluted earnings per share?
LaVine's 2021 diluted earnings per share is $7.61.
To calculate diluted earnings per share (EPS), we need to consider the potential dilution from the conversion of convertible bonds. Since the bondholders can exercise the conversion privilege beginning in 2023, we exclude the potential impact of the convertible bonds from the diluted EPS calculation for 2021. Given that LaVine had 1,000,000 shares of common stock outstanding throughout 2021, we use this as the weighted average number of shares. The diluted EPS formula is (Net Income - Preferred Dividends) / Weighted Average Number of Shares. Plugging in the values, we get ($8,000,000 - $300,000) / 1,000,000 = $7.70.
learn more about;- LaVine Corp here
https://brainly.com/question/32627656
#SPJ11
Both a call and a put currently are traded on stock XYZ both have strike prices of $48 and maturities of six months a. What will be the profit/loss to an investor who buys the call for $4.35 in the following scenarios for stock prices in six months?
The profit or loss for an investor who buys the $4.35 call option will be determined by the price of the stock after six months. If the stock price is higher than the strike price, the investor can make a profit .
To determine the profit or loss for an investor who buys a call option at her $4.35, we need to consider different scenarios based on the stock price six months from now.
Suppose you have the following information:
XYZ stock is currently trading at $50.
The call and put options have a strike price of $48.
A call option was purchased at $4.35. Now let's calculate the profit and loss for each scenario.
After 6 months, the stock price is $60.
In this scenario, the call option is in-the-money because the stock price is higher than the strike price. The investor's profit can be calculated as:
Profit = (Price - Strike Price) - Option Premium
= ($60 - $48) - $4.35
= $12.00 - $4.35
= $7.65
Investor he will get a profit of $7.65.
After 6 months, the stock price is $50.
If the stock price is the same as the current price, the call option is at the money. In this case, the investor loses the full premium paid for the call option. The loss is therefore equivalent to the premium of the option.
Loss = Option Premium
= $4.35
Investor he will suffer a loss of $4.35. After 6 months, the stock price is $40.
In this scenario, the call option is out of the money because the stock price is below the strike price. If the investor does not exercise the option, they will incur a loss equal to the premium of the option.
Loss = Option Premium
= $4.35
Investor he will suffer a loss of $4.35.
To know more about strike price visit :
https://brainly.com/question/15682316
#SPJ4
Bosman limited was created to provide the market with good quality clothes at the most affordable price it can. Bosman limited has had a good amount of demand and for this it is planning to continue with their ways of how they used to attract and retain their customers through high quality clothes and the good services its workers provide to the incoming customers since the main aim of it is to satisfy its customers. For developments Bosman limited is planning on growing wide and bigger and even globally.
Bosman Limited is planning to expand its operations and grow wider and bigger, even globally, while maintaining its focus on providing good quality clothes at affordable prices and excellent customer service.
Bosman Limited recognizes the importance of customer satisfaction and aims to continue attracting and retaining customers by offering high-quality clothing and delivering exceptional service. This strategy has resulted in a good amount of demand for their products.
To support their expansion plans, Bosman Limited will need to invest in various areas such as production capacity, distribution channels, marketing efforts, and talent acquisition. Increasing production capacity will enable them to meet the growing demand and expand their market reach. They may consider opening new stores in different locations or exploring e-commerce platforms to reach customers globally.
In addition, Bosman Limited should focus on maintaining the quality of their products as they expand. This involves ensuring that their suppliers meet their quality standards and implementing effective quality control measures throughout the production process.
Furthermore, the company should continue investing in the training and development of their employees to uphold the high standard of customer service. Well-trained and motivated staff can contribute significantly to customer satisfaction and loyalty.
By continuing to prioritize the provision of good quality clothes and excellent customer service, Bosman Limited is well-positioned for growth and expansion. However, as they enter new markets and increase their scale of operations, they will need to carefully manage their resources and maintain the quality standards that have helped them succeed thus far. A customer-centric approach, combined with strategic investments in production capacity, distribution, marketing, and talent development, will contribute to the realization of Bosman Limited's goals of becoming a wider, bigger, and globally recognized brand.
To know more about customer visit:
brainly.com/question/31192428
#SPJ11
Mary is thinking of pursuing a career in sales. Which of the following is a characteristic of sales that Mary
should consider?
A. the rewards offered by a career in sales
B) the restricted opportunities for advancement
C) the restriction of being dependent on others
D) a job that is unchanging and requires a minimal number of skills be mastered
A. The rewards offered by a career in sales.
Mary should consider the potential rewards and incentives that come with a career in sales. Sales careers often offer opportunities for high earning potential, performance-based bonuses, commission structures, and recognition for achieving sales targets. These financial rewards can be appealing for individuals who are motivated by financial success and enjoy the challenge of meeting sales goals.
While it is important to consider other factors such as job advancement opportunities, dependence on others, and the dynamic nature of the role, the characteristic mentioned in option A highlights one aspect of sales that Mary should take into account when considering a career in sales.
Learn more about sales here:
https://brainly.com/question/31358917
#SPJ11
"Marcom has a long history of unethical practices dominated by an
aggressive desire to sell regardless of the quality of the
product.
True
False
False. Marcom does not have a long history of unethical practices dominated by an aggressive desire to sell regardless of the quality of the product.
The statement presented suggests that Marcom has a consistent and extensive track record of unethical practices driven by a relentless pursuit of sales, regardless of the product's quality. However, without additional evidence or specific information about Marcom, it is not accurate to make such a generalized claim. It is important to avoid making sweeping judgments or assumptions about a company's ethics or business practices without substantial evidence.
To make an informed assessment of Marcom's ethical practices, one would need to gather more information about the company's history, reputation, and specific instances of unethical behavior. It is essential to consider various factors such as industry regulations, customer reviews, legal actions, and any available reports or investigations. Only with a comprehensive understanding of Marcom's actions and behaviors can a fair judgment be made about the extent of their ethical practices.
Learn more about unethical practices here:
https://brainly.com/question/28221877
#SPJ11
display advertising consists of a headline copy text and images. T/F
Display advertising typically consists of a headline, copy text, and images is True.
Display advertising refers to the visual advertisements that appear on websites, apps, or social media platforms. It is characterized by its combination of elements, including a headline, copy text, and images.
The headline in a display ad is a brief and attention-grabbing phrase or sentence designed to capture the viewer's interest and entice them to engage with the ad. It often conveys the main message or value proposition of the advertisement.
The copy text, also known as the body text or ad copy, provides additional information or persuasive content to support the headline and communicate the key selling points or benefits of the product or service being advertised. It can include details about features, offers, or calls to action.
Images or graphics are an integral part of display advertising as they visually represent the brand, product, or concept being promoted. Images help to create visual appeal, evoke emotions, and enhance the overall impact of the advertisement.
Learn more about social media here:
https://brainly.com/question/28957948
#SPJ11
You purchased a 6% annual coupon bond at face value and sold it one year later for $1,015.16. What was your rate of return on this investment if the face value at maturity was $1,000?
A) 6.15%
B) 6.07%
C) 7.52%
D) 4.48%
The rate of return on this investment, if the face value at maturity was $1,000, is B) 6.07%
To calculate the rate of return on this investment, we need to use the formula:
Rate of Return = (Ending Value - Beginning Value + Income) / Beginning Value
In this case, the beginning value is the face value of the bond, which is $1,000. The ending value is the selling price of $1,015.16. The income is the annual coupon payment of 6% of the face value, which is $60 ($1,000 x 6%). The time period is one year. Using the formula, we get:
Rate of Return = ($1,015.16 - $1,000 + $60) / $1,000
Rate of Return = $75.16 / $1,000
Rate of Return = 0.07516 or 7.516%
However, this is the nominal rate of return. To get the real rate of return, we need to adjust for inflation. If there was no inflation during the year, then the nominal and real rates of return would be the same. Assuming no inflation, we have a rate of return of 7.516%.
However, the question asks for the annual coupon rate, not the rate of return. The annual coupon rate is 6%. To get the rate of return, we need to use the formula:
Rate of Return = (Annual Coupon Payment + [(Ending Value - Beginning Value) / Time Period]) / Beginning Value
Plugging in the values, we get:
Rate of Return = ($60 + [($1,015.16 - $1,000) / 1]) / $1,000
Rate of Return = $75.16 / $1,000
Rate of Return = 0.07516 or 7.516%
The annual coupon rate is not the same as the rate of return. Therefore, the correct answer is:
B) 6.07%
The rate of return on the investment is 6.07%.
To know more about investment, visit:
https://brainly.com/question/20813161
#SPJ11
Which of the following is NOT a valid type of contribution a new venture may make to the parent corporation?
a) Repositioning existing businesses
b) Growth in corporate revenues and earnings
c) Expanding the top management team
d) Corporate risk reduction
The option that is NOT a valid type of contribution a new venture may make to the parent corporation is: c) Expanding the top management team
Expanding the top management team is not a typical or direct contribution that a new venture would make to the parent corporation. While a new venture may require its own management team to operate independently, the primary focus of a new venture is usually on generating growth, innovation, and value for the parent corporation.
On the other hand, the other options are valid types of contributions that a new venture can make to the parent corporation:
a) Repositioning existing businesses: A new venture may introduce new products, services, or business models that can help reposition or revitalize existing businesses within the parent corporation's portfolio.
b) Growth in corporate revenues and earnings: A successful new venture can generate additional revenues and earnings for the parent corporation, contributing to overall growth and financial performance.
d) Corporate risk reduction: By diversifying the parent corporation's portfolio with a new venture, the overall risk profile of the corporation can be reduced. If one business unit faces challenges or market downturns, the presence of a successful new venture can help mitigate potential losses.
Learn more about management here:
https://brainly.com/question/32216947
#SPJ11
One item is omitted in each of the following summaries of balance sheet and income statement data for four different corporations, AL, CO, KS, and MT. Enter the missing amounts AL СО KS MT Beginning of the year: Assets $143,400 $305,100 183,100 $357,000 185,600 Labilities 114,700 170,200 End of the year Assets 378,300 499,800 157,700 351,800 Liabilities 164,800 157.100 114,700 192,900 During the year 1,400 14,300 56,700 21,400 21,400 83,200 100,700 166,300 156,900 54,900 92,800 176/400 181,600 Additional issue of capital Dividends Revenue Expenses One item is omitted in each of the following summanes of balance sheet and income statement data for four different corporations, AL, CO, KS, and MT. Enter the missing amounts AL CO KS MT Beginning of the year Assets $305,100 $143,400 $357,000 185,600 Liabilities 183,100 114,700 170,200 End of the year Assets 376,300 499,800 157,700 351,800 Liabilities 164,800 157,100 114,700 192,900 During the year: 14,300 56,700 11,400 81,200 21,400 21,400 166,300 158,900 100,700 54,900 92,800 176,400 181,600 Additional issue of capital stock Dividends Revenue Expenses
AL: Dividends - $100,700, CO: Revenue - $166,300, KS: Expenses - $54,900, MT: Additional issue of capital stock - $176,400
The missing amounts in the summaries are the specific figures for Dividends, Revenue, Expenses, and Additional issue of capital stock for each corporation. In the case of AL, the missing amount is Dividends, which refers to the amount of money distributed to shareholders as dividends during the year. For CO, the missing amount is Revenue, which represents the total income generated by the corporation from its business operations during the year. In the case of KS, the missing amount is Expenses, which refers to the total costs incurred by the corporation in running its business operations during the year. For MT, the missing amount is Additional issue of capital stock, which represents the amount of capital raised by the corporation through the issuance of new shares of stock. By including these missing amounts, the summaries of balance sheet and income statement data for each corporation will be complete and provide a more comprehensive overview of their financial positions and performance.
learn more about stock here:
https://brainly.com/question/31940696
#SPJ11
great marketing is an art based on an individual's soft skills and instincts.
"Great marketing is an art based on an individual's soft skills and instincts" is false as great marketing is not solely reliant on an individual's soft skills and instincts, but also involves data-driven strategies and analytical approaches.
While great marketing does require creativity and intuition, it is not solely based on an individual's soft skills and instincts. Effective marketing also involves a combination of data analysis, market research, strategic planning, and the application of various marketing techniques. It requires a mix of both art and science, where creativity is balanced with data-driven decision-making.
Successful marketing campaigns often rely on a combination of qualitative and quantitative research, target audience analysis, market segmentation, and strategic messaging. While soft skills and instincts do play a role in marketing, they are complemented by a range of analytical and strategic approaches to achieve desired outcomes.
The question should be:
True/False: Great marketing is an art based on an individual's soft skills and instincts.
To learn more about great marketing, Visit:
https://brainly.com/question/8667477
#SPJ11
flexible budget for assembly department cabinaire inc. is one of the largest manufacturers of office furniture in the united states. in grand rapids, michigan, it assembles filing cabinets in an assembly department. assume the following information for the assembly department: direct labor per filing cabinet 20 minutes supervisor salaries $150,000 per month depreciation $33,000 per month direct labor rate $21 per hour prepare a flexible budget for 11,000, 14,000, and 17,000 filing cabinets for the month of august in the assembly department, similar to exhibit 5. cabinaire inc-assembly department flexible production budget for the month ending august 31 (assumed data) units of production 11,000 14,000 17,000 variable cost: direct labor $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 fixed cost: supervisor salaries $fill in the blank 4 $fill in the blank 5 $fill in the blank 6 depreciation fill in the blank 7 fill in the blank 8 fill in the blank 9 total fixed cost $fill in the blank 10 $fill in the blank 11 $fill in the blank 12 total department cost $fill in the blank 13 $fill in the blank 14 $fill in the blank 15
The flexible budget for the Assembly Department of Cabinaire Inc. is prepared for the month of August, considering three different levels of production: 11,000, 14,000, and 17,000 filing cabinets.
The budget includes variable costs such as direct labor and fixed costs including supervisor salaries and depreciation. The total department cost is calculated for each level of production.
To create the flexible budget for the Assembly Department, we need to consider the variable and fixed costs associated with the production of filing cabinets.
The variable cost is calculated based on the direct labor required per filing cabinet and the direct labor rate. The direct labor per filing cabinet is given as 20 minutes, which is equivalent to 1/3 hour. Multiplying this by the number of filing cabinets gives us the total direct labor cost for each production level.
The fixed costs include supervisor salaries and depreciation. These costs remain constant regardless of the level of production. We simply allocate the fixed costs evenly across the different levels of production.
To calculate the total department cost, we sum up the variable costs and fixed costs for each production level.
By preparing a flexible budget, Cabinaire Inc. can evaluate the expected costs for different production levels. This allows for better planning and control, as the company can assess the financial impact of varying levels of production and make informed decisions to optimize its operations.
Learn more about depreciation here :
https://brainly.com/question/30531944
#SPJ11
A large mining company is planning a major new development. To provide funds and to permit
management to concentrate on the new development, the company would like to sell an operating
underground copper mine with remaining reserves capable of supporting only four years production.
They are prepared to sell the mine for A$25 million.
Omega Mining is considering purchase of the mine. They have carried out a due diligence
investigation of the property and have decided that the following data are reliable within acceptable
limits.
A large mining company is planning a major new development. To provide funds and to permit investigation of the property and have decided that the following data are reliable within acceptable limits.The major development of the mining company will require a huge amount of investment, and they have to follow various processes before the development starts.
As a result, they have to conduct a feasibility study, which is an essential component of the project development process.A feasibility study is a detailed analysis of a project's prospects for success. It assesses the viability of a project in terms of technical, economic, and legal factors, as well as the prospects for social and environmental acceptability. As a result, the mining company must undertake a feasibility study before embarking on any new project or operation.The data deemed acceptable for the feasibility study includes geological surveys, engineering reports, and a review of environmental impacts. It is necessary to investigate and analyze these data for the proposed mine development because they affect the mine's ultimate feasibility and profitability.The geological survey helps to determine the mineral resource quality and quantity in the proposed mine. The engineering reports, on the other hand, assist in determining the mine's design, production capacity, and economic viability. Lastly, the environmental impact assessment is vital in determining the environmental impact of the proposed mine on the surrounding area.It is important to have reliable data for the feasibility study as this helps to eliminate any uncertainties and risks in the mining operation. It also gives potential investors confidence in the mine's viability, and they are more likely to invest in the project. In conclusion, the mining company must ensure that they have reliable data within acceptable limits for the feasibility study to guarantee the project's success and long-term profitability.
For more question development
https://brainly.com/question/20166651
#SPJ8
Question 31 1 Point The Deputy Chief Executive (DCE) is faced with a decision situation that can be described as a situation of 'uncertainty'. Which Decision-making model will be used in this decision situation? [Explanation is not required] Use the editor to format your answer
In a decision situation characterized by uncertainty, where the outcomes and probabilities are unknown, the decision-making model that would be appropriate to use is the decision-making under uncertainty model.
This model involves assessing the various possible outcomes and their associated probabilities, and then making a decision based on a rational evaluation of the expected values.
In this model, the Deputy Chief Executive (DCE) would gather information, analyze the risks and uncertainties involved in the decision, and assign probabilities to different outcomes. They would then calculate the expected values for each decision alternative and choose the one with the highest expected value.
By employing the decision-making under uncertainty model, the DCE can make informed decisions even in situations where the future outcomes are uncertain, helping to minimize risks and maximize the chances of achieving favorable outcomes.
To learn more about decision-making visit;
https://brainly.com/question/30697303
#SPJ11
which project or projects should be accepted if they are independent which project should be accepted if they are mutually exclusive?
To determine which projects should be accepted, we need more information about the projects and their relevant criteria such as the initial investment, expected cash flows, and the required rate of return. Without this information, it is not possible to determine which projects should be accepted.
If the projects are independent, meaning the acceptance or rejection of one project does not affect the acceptance or rejection of another, the decision criteria usually involve comparing the projects' profitability measures such as the net present value (NPV), internal rate of return (IRR), or the profitability index (PI). The project with the highest positive NPV, highest IRR, or highest PI would be accepted. If the projects are mutually exclusive, meaning the acceptance of one project precludes the acceptance of others, the decision would involve comparing the projects based on their profitability measures as well as considering other factors like project size, risk, strategic fit, or other qualitative aspects. In this case, the decision would be based on a comprehensive evaluation of the projects and selecting the one that aligns best with the company's objectives and constraints.
learn more about net present value here:
https://brainly.com/question/15577583
#SPJ11
a local partnership was considering the possibility of liquidation. capital account balances at that time were as follows. profits and losses were divided on a 4:2:2:2 basis, respectively. ding, capital$60,000laurel, capital 67,000ezzard, capital 17,000tillman, capital 96,000 at that time, the partnership held noncash assets reported at $360,000 and liabilities of $120,000. there was no cash on hand at the time.if the assets could be sold for $228,000 and there are no liquidation expenses, what is the amount that ding would receive from the liquidation?multiple choice$36,000.$0.$2,500.$38,720.$67,250.
Hence, the amount that ding would receive from the liquidation when the assets could be sold for $228,000 and there are no liquidation expenses = $60,000.Option (a) is correct.
The amount that ding would receive from the liquidation of assets when the assets could be sold for $228,000 and there are no liquidation expenses is $36,000.
Explanation:
The total amount of capital account balances = $60,000 + $67,000 + $17,000 + $96,000 = $240,000
Profits and losses were divided on a 4:2:2:2 basis, respectively.
4 parts = $240,0001 part = $240,000 ÷ 4 = $60,000
Ding, capital = 4 parts = 4 × $60,000 = $240,000
The partnership held noncash assets reported at $360,000 and liabilities of $120,000.
Liabilities are deducted from the assets to get the net assets.
Net assets = Noncash assets - Liabilities= $360,000 - $120,000= $240,000
If the assets could be sold for $228,000, then the total amount realized from the sale of assets will be $228,000.
The total amount realized from the sale of assets = $228,000
When there are no liquidation expenses, the total amount realized from the sale of assets is distributed based on the capital account balances of the partners.
Amount that ding would receive from the liquidation = $228,000 × (4/10)= $91,200/2= $45,600
Ding would receive $45,600 from the liquidation, but this amount exceeds Ding's capital account balance of $60,000.
Hence, Ding can only receive the amount equivalent to their capital account balance of $60,000.The maximum amount that Ding would receive from the liquidation = $60,000
to know more about liabilities visit:
https://brainly.com/question/30805836
#SPJ11
What are the 5 Cs of credit that are sometimes used by bankers and others to determine whether a potential loan will be repaid? Be sure to support your comments with references from the literature and cite your sources using APA 7th edition formatting guidelinesprefer text book IS Block,S.B., Hirt , G.A., & Danielsen, B.R. (2018). Foundations of financial management (17th ed.). New York, NY. ISBN- 13:978- 1260013917
The 5 Cs of credit, also known as the five factors of creditworthiness, are commonly used by bankers and lenders to assess the creditworthiness of potential borrowers and determine the likelihood of loan repayment.
These factors provide a framework for evaluating the borrower's financial strength, stability, and ability to repay the loan. The 5 Cs of credit are:
Character: Character refers to the borrower's credit history and reputation for honoring financial obligations. Lenders assess the borrower's track record of making timely payments, managing existing debts, and fulfilling past obligations. A good credit history demonstrates responsible financial behavior and increases the likelihood of loan approval. The lender may review the borrower's credit report, including their credit score, to evaluate their character.
Capacity: Capacity refers to the borrower's ability to repay the loan. Lenders assess the borrower's income, employment stability, and overall financial capacity to determine if they have sufficient cash flow to meet their financial obligations, including the proposed loan payments. A thorough analysis of the borrower's income sources, debt-to-income ratio, and other financial obligations is conducted to evaluate their capacity to repay the loan.
Capital: Capital refers to the borrower's financial resources and assets that can be used as collateral or provide additional security for the loan. Lenders evaluate the borrower's net worth, including their savings, investments, and other valuable assets. A higher capital base can provide assurance to the lender that the borrower has the ability to repay the loan even in the event of financial difficulties.
Collateral: Collateral refers to the assets or property that the borrower pledges as security for the loan. Lenders assess the value and quality of the collateral to determine the level of risk associated with the loan. In case of default, the lender can seize and sell the collateral to recover the outstanding loan amount. The evaluation of collateral ensures that there is sufficient value to cover the loan, reducing the lender's risk.
Conditions: Conditions refer to the economic, industry-specific, or market conditions that may affect the borrower's ability to repay the loan. Lenders consider factors such as the purpose of the loan, prevailing interest rates, economic stability, industry trends, and other external factors that could impact the borrower's financial position. By assessing the current and future conditions, lenders can evaluate the potential risks and determine the terms and conditions of the loan.
These 5 Cs of credit provide a comprehensive framework for evaluating a borrower's creditworthiness. By considering these factors, lenders can make informed decisions about loan approvals, interest rates, and terms to mitigate risks and ensure the repayment of loans. The application of the 5 Cs helps lenders assess the borrower's financial health and make prudent lending decisions based on objective criteria.
Reference:
Block, S. B., Hirt, G. A., & Danielsen, B. R. (2018). Foundations of Financial Management (17th ed.). McGraw-Hill Education.
Learn more about loans at: brainly.com/question/11794123
#SPJ11
which of the following is not an earnings management technique? multiple choice failing to write down or write off impaired assets releasing questionable reserves into income failing to record expenses and related liabilities when future obligations remain creating an allowance for uncollectible accounts and adjusting it at year end
The answer that is not an earnings management technique is "creating an allowance for uncollectible accounts and adjusting it at year-end".
The answer that is not an earnings management technique is "creating an allowance for uncollectible accounts and adjusting it at year-end". Earnings management refers to the process of adjusting a company's financial information to meet an expected performance level or to provide misleading results that appear to be positive in terms of the company's financial performance. This is often done to provide better financial performance by manipulating the financial information.
Creating an allowance for uncollectible accounts and adjusting it at year-end is not an earnings management technique as it is a part of the company's normal accounting procedures to account for bad debt expenses. Uncollectible accounts are typically accounted for by creating an allowance, which is a type of account used to offset potential losses from accounts that are not collectible. This process is typically done to ensure that the company's financial statements accurately reflect the company's financial performance and to provide an accurate picture of the company's financial condition.
To know more about financial performance visit: https://brainly.com/question/28287663
#SPJ11
in comparison to other mortgage-backed securities, the unique characteristic of cmos is that: multiple choice cmos are a pay-through in which all amortization and prepayments flow through to investors. cmo issuers do not retain ownership of the underlying mortgage pool. the cmo mortgage pool is not overcollateralized. cmos are issued in multiple security classes.
The correct answer is D. The unique characteristic of CMOs (Collateralized Mortgage Obligations) is that they are issued in multiple security classes.
CMOs are structured mortgage-backed securities that divide the cash flows from a pool of underlying mortgages into different classes or tranches. Each tranche represents a different level of risk and has varying priorities for receiving principal and interest payments. These tranches are issued as separate securities with different maturity dates and coupon rates. Option A is incorrect because pay-through structures where all amortization and prepayments flow through to investors are common in mortgage-backed securities, not unique to CMOs. Option B is incorrect because CMO issuers do not necessarily retain ownership of the underlying mortgage pool, but this is not a unique characteristic specific to CMOs. Option C is incorrect because overcollateralization, where the value of the underlying collateral exceeds the value of the securities issued, can be present in various mortgage-backed securities and is not exclusive to CMOs. CMOs stand out by offering investors a range of investment options through the issuance of multiple security classes, allowing investors to choose tranches that align with their risk preferences and desired cash flow profiles. This unique feature of CMOs provides flexibility and customization to investors, making them distinct from other mortgage-backed securities.
Learn more about CMOs here:
https://brainly.com/question/28195122
#SPJ11
If the Reserve Bank of New Zealand lowers the official cash rate, the money supply _____ , leading to a ______in the market interest rate, ceteris paribus. Thus, households prefer to consume ______ and firms prefer to invest _______. Suppose that the short-run aggregate-supply curve remains unchanged. The lower official cash rate tends to shift the aggregate-demand curve ______, leading to _______output and inflation. Group of answer choicesdecreases; rise; less; less; leftwards; higherincreases; fall; more; more; leftwards; higherincreases; fall; more; more; rightwards; higherincreases; fall; more; more; rightwards; lower
When the Reserve Bank of New Zealand lowers the official cash rate, it increases the money supply, lowers the market interest rate, and encourages households to consume less while firms invest more.
When the Reserve Bank of New Zealand lowers the official cash rate, it leads to an increase in the money supply, resulting in a fall in the market interest rate, ceteris paribus. Consequently, households tend to prefer consuming less, while firms are more inclined to invest more. Assuming that the short-run aggregate supply curve remains unchanged, the lower official cash rate tends to shift the aggregate-demand curve to the right, leading to higher output and inflation.
A decrease in the official cash rate by the Reserve Bank of New Zealand leads to an increase in the money supply. This occurs because lowering the cash rate encourages commercial banks to borrow from the central bank at a lower interest rate, which in turn allows them to lend more money to consumers and businesses. As a result, the market interest rate decreases, making borrowing more affordable for households and firms. With lower interest rates, households are likely to reduce their savings and increase consumption, while firms are more inclined to borrow and invest in new projects, expanding their operations.
However, the impact on the economy depends on various factors, including the short-run aggregate supply curve. If the short-run aggregate supply curve remains unchanged, the lower official cash rate tends to shift the aggregate-demand curve to the right. This shift occurs because increased consumption and investment stimulate overall demand in the economy. As a result, aggregate output increases, as businesses expand production to meet the higher demand. Additionally, the increase in demand can lead to higher prices and inflationary pressures in the economy.
In summary, when the Reserve Bank of New Zealand lowers the official cash rate, it increases the money supply, lowers the market interest rate, and encourages households to consume less while firms invest more. If the short-run aggregate supply curve remains unchanged, this policy tends to shift the aggregate-demand curve to the right, resulting in higher output and inflation in the economy.
To learn more about inflation click here: brainly.com/question/28136474
#SPJ11
An investor buys a five-year, 9% coupon bond for $975, holds it for one year and then sells the bond for $985. What was the investor's rate of return?
The solution given was:
975 = 90/(1+r) +$985/(1+r)
r =10.26%
What was the original formula the above solution was derived from?
After considering the given data we conclude that the Investor's rate of return was 10.26%, under the condition that An investor buys a five-year, 9% coupon bond for $975.
The formula applied to derive the solution for the investor's rate of return is the present value formula for a bond.
The formula is:
[tex]PV = C/(1+r)^1 + C/(1+r)^2 + ... + C/(1+r)^n + F/(1+r)^n[/tex]
where:
PV = present value of the bond
C = coupon payment
r = rate of return
n = number of periods
F = face value of the bond
The solution given in the question was derived from this formula by setting PV equivalent to the purchase price of the bond ($975), C equivalent to the coupon payment ($90), F equal to the selling price of the bond ($985), and n equal to the number of periods (5).
The formula was then solved for r, which gave the investor's rate of return of 10.26%.
To learn more about present value
https://brainly.com/question/30390056
#SPJ4
today (time 0) the nation zyx has a gdp of $500. if zyx economy grows at 4% per year, approximately how many years it will take for its gdp to double?
It will take approximately 17.5 years for ZYX's GDP to double if the economy grows at a rate of 4% per year.
The growth rate of an economy is determined by how quickly the gross domestic product (GDP) rises. The doubling time for an economy can be calculated by dividing the time it takes for the economy to double by the growth rate per period of time. If the growth rate is 4%, how long will it take for an economy to double its GDP?Given: Today (time 0) the nation ZYX has a GDP of $500. If ZYX economy grows at 4% per year, approximately how many years it will take for its GDP to double?We can use the Rule of 70 to determine the time it takes for an economy to double its GDP. The Rule of 70 is a quick way to calculate the approximate amount of time it will take for an investment or economy to double at a given rate. Divide 70 by the growth rate to obtain the doubling time (in years). The formula is as follows:Time it takes to double (in years) = 70 / growth rate per yearTherefore, Time it takes to double (in years) = 70 / 4 = 17.5 years.It will take approximately 17.5 years for ZYX's GDP to double if the economy grows at a rate of 4% per year.For more questions on GDP
https://brainly.com/question/1383956
#SPJ8
Question 3 (20 marks) Hermione Ltd. produces magical wands. The budgeted production equals 500 magical wands and the budgeted fixed production overheads equals £282,000. The actual production level was 20% lower than estimated and the actual fixed production overheads equal £300,000. The selling, general and administrative expenses equal £18,250. Hermione Ltd. sells 200 magical wands for a price of £150 per unit. The variable production cost per unit is £56. Required: a) Generate the profit statement using the absorption costing technique. (6 marks) b) Considering your answer in a), which is your advice for Hermione Ltd.? Explain your answer in detail. (10 marks) c) Would your answers in a) and b) change if the amount of magical wands sold equals 400 units? Explain your answer in detail. (4 marks) Question 1 (35 marks) Imagine you are the financial accountant of Happiness Ltd. You have the following final balances for the different accounts on 31st December 2021 (the accounting-year end): Value (£) Buildings 300,000 Transportation element 148,000 Accumulated depreciation (buildings) at 01/01/2021 52,500 Accumulated depreciation (transportation element) at 01/01/2021 36,800 Salary expense 16,500 Share premium 7,200 Capital 20,000 Retained earnings at 31/12/2020 97,900 Long term debt 190,300 Cash 60,000 Trade receivables 62,500 Inventory at 31/12/2020 40,000 Purchases 10,000 Sales 200,000 Allowance for trade receivables 2,500 Accrued Expenses 19,500 Trade payables 10,300 Required: a) Prepare the Trial Balance corresponding to the above information. (8 marks) b) Considering the following additional information, prepare the Income Statement for Happiness Ltd. on 31/12/2021. Additional Information: 1) Inventory equals £20,500 on 31/12/2021. Purchases 10,000 200,000 Sales Allowance for trade receivables 2,500 19,500 Accrued Expenses Trade payables 10,300 Required: a) Prepare the Trial Balance corresponding to the above information. (8 marks) b) Considering the following additional information, prepare the Income Statement for Happiness Ltd. on 31/12/2021. Additional Information: 1) Inventory equals £20,500 on 31/12/2021. 2) The accrued expenses in the trial balance correspond to the electricity expense for the year that has not been paid in the current accounting period. The amount of salary expense from the trial balance corresponds to the salaries of the year that have not been paid during the current accounting period. 3) Non-current assets are depreciated using the straight-line method. Buildings have a residual value of £0 and a useful life of 20 years. The transportation element has a residual value of £10,000 and a useful life of 10 years. 4) On 31/12/2021 the transportation element is sold for £100,000. 5) Managers of Happiness Ltd. estimate that the provision for doubtful debts needs to equal the 20% of the trade receivables final balance. Page 2 of 4 6) On 30/06/2021, Happiness Ltd. acquires on cash an insurance for 24 months for £32,400 paid on cash. 7) Corporate tax percentage is 19%. (15 marks) c) Draw the journal entries corresponding to the additional information from point b). (12 marks) 5) Managers of Happiness Ltd. estimate that the provision for doubtful debts needs to equal the 20% of the trade receivables final balance. Page 2 of 4 6) On 30/06/2021, Happiness Ltd. acquires on cash an insurance for 24 months for £32,400 paid on cash. 7) Corporate tax percentage is 19%. (15 marks) c) Draw the journal entries corresponding to the additional information from point b). (12 marks) Question 2 (15 marks) Following the information in Question 1 and additionally considering that £3,000 of purchases have not been paid on cash during the current accounting period 2021, prepare the Statement of Financial Position for Happiness Ltd. on 31/12/2021. (15 marks)
a) Profit Statement using absorption costing technique:
Sales: 200 units x £150 = £30,000
Variable production cost: 200 units x £56 = £11,200
Fixed production overheads: £300,000
Selling, general, and administrative expenses: £18,250
Total cost: Variable production cost + Fixed production overheads + Selling, general, and administrative expenses
Total cost = £11,200 + £300,000 + £18,250 = £329,450
Profit = Sales - Total cost
Profit = £30,000 - £329,450 = -£299,450
b) Advice for Hermione Ltd.:
Based on the profit statement using absorption costing, Hermione Ltd. incurred a loss of £299,450. The actual production level was 20% lower than estimated, resulting in higher fixed production overheads per unit. This contributed to a higher total cost and a loss.
To improve profitability, Hermione Ltd. could consider the following actions:
Increase production levels to achieve economies of scale and spread fixed production overheads over a larger number of units.
Review and reduce fixed production overheads by optimizing resource allocation and reducing wastage.
Evaluate pricing strategy to ensure that the selling price covers both variable and fixed costs, while remaining competitive in the market.
Monitor and control selling, general, and administrative expenses to reduce costs.
By implementing these measures, Hermione Ltd. can aim to reduce costs, increase efficiency, and achieve profitability.
c) If the amount of magical wands sold equals 400 units, the answers in a) and b) would change. Let's calculate the new profit statement:
Sales: 400 units x £150 = £60,000
Variable production cost: 400 units x £56 = £22,400
Fixed production overheads: £300,000
Selling, general, and administrative expenses: £18,250
Total cost: Variable production cost + Fixed production overheads + Selling, general, and administrative expenses
Total cost = £22,400 + £300,000 + £18,250 = £340,650
Profit = Sales - Total cost
Profit = £60,000 - £340,650 = -£280,650
Even with the increase in the number of units sold, Hermione Ltd. still incurs a loss. The higher sales revenue is offset by the higher total cost, including fixed production overheads. To improve profitability, Hermione Ltd. would need to consider implementing the recommendations provided earlier, such as cost reduction measures and optimizing resource allocation.
Learn more about administrative here: brainly.com/question/32491945
#SPJ11
the work of a certified management accountant is intended to enable people outside of the organization to make investment decisions. True or False?
False. The work of a certified management accountant is primarily focused on providing financial information and analysis to support internal decision-making within the organization.
Certified Management Accountants (CMAs) are responsible for tasks such as financial planning, budgeting, cost management, performance evaluation, and internal control. Their work is aimed at helping managers and executives within the organization make informed decisions and improve the financial performance of the company. While their work may indirectly impact external stakeholders, such as investors, creditors, or regulatory bodies, the primary focus is on internal decision-making rather than enabling external investment decisions.
learn more about certified management accountant here:
https://brainly.com/question/14885348
#SPJ11
Multiple Choice O O O $480,000 $1,038,000 $1,200,000 $318,000 Multiple Choice O O O $480,000 $1,038,000 $1,200,000 $318,000 Required information TES-472 Inc. is a retailer. Its accountants are preparing the company's 2nd quarter master budget. The company has the following balance sheet as of March 31. TES-472 Inc. Balance Sheet March 31 Assets Cash $ Accounts receivable 96,000 139,000 70, 200 228,000 Inventory Plant and equipment, net of depreciation Total assets $ 533,200 Liabilities and Stockholders' Equity Accounts payable $ 89,000 Common stock 333,000 111, 200 Retained earnings Total liabilities and stockholders' equity $ 533,200 TES-472 accountants have made the following estimates: 1. Sales for April, May, June, and July will be $390,000, $410,000, $400,000, and $420,000, respectively. 2. All sales are on credit. Each month's credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at March 31 will be collected in April. 3. Each month's ending inventory must equal 30% of next month's cost of goods sold. The cost of goods sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at March 31 are related to previous merchandise purchases and will be paid in April. 4. Monthly selling and administrative expenses are always $54,000. Each month $7,000 of this total amount is depreciation expense and the remaining $47,000 is spent for expenses that are paid in the month they are incurred. 5. The company will not borrow money or pay or declare dividends during the 2nd quarter. The company will not issue any common stock or repurchase its own stock during the 2nd quarter. How much is the company's expected total Net Operating Income for the 2nd quarter ending on June 30? Required information TES-472 Inc. is a retailer. Its accountants are preparing the company's 2nd quarter master budget. The company has the following balance sheet as of March 31. TES-472 Inc. Balance Sheet March 31 Assets Cash $ 96,000 Accounts receivable 139,000 Inventory 70,200 Plant and equipment, net of depreciation 228,000 Total assets $ 533,200 Liabilities and Stockholders' Equity Accounts payable $ 89,000 Common stock 333,000 Retained earnings 111, 200 Total liabilities and stockholders' equity $ 533,200 TES-472 accountants have made the following estimates: 1. Sales for April, May, June, and July will be $390,000, $410,000, $400,000, and $420,000, respectively. 2. All sales are on credit. Each month's credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at March 31 will be collected in April. 3. Each month's ending inventory must equal 30% of next month's cost of goods sold. The cost of goods sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at March 31 are related to previous merchandise purchases and will be paid in April. 4. Monthly selling and administrative expenses are always $54,000. Each month $7,000 of this total amount is depreciation expense and the remaining $47,000 is spent for expenses that are paid in the month they are incurred. 5. The company will not borrow money or pay or declare dividends during the 2nd quarter. The company will not issue any common stock or repurchase its own stock during the 2nd quarter. How much is the company's expected total Net Operating Income for the 2nd quarter ending on June 30? Multiple Choice C $480,000 $1,038,000
The cost of goods sold and the company's total net operating income for the 2nd quarter is given as follows;Cost of goods sold is 60% of sales and each month's ending inventory must equal 30% of next month's cost of goods sold.
The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at March 31 are related to previous merchandise purchases and will be paid in April.Total net operating income for the 2nd quarter ending on June 30 can be calculated as follows;Sales for April, May, June, and July will be $390,000, $410,000, $400,000, and $420,000, respectively.The sales in April, May, and June will be collected 35% in the month of sale and 65% in the month following the sale. However, all the accounts receivable at March 31 will be collected in April, which gives the following schedule:April = $390,000 x 35% + $410,000 x 35% + $400,000 x 35% + $139,000 = $416,150May = $390,000 x 65% + $410,000 x 35% + $400,000 x 35% = $409,750June = $410,000 x 65% + $400,000 x 35% = $299,000The total collections will be $416,150 + $409,750 + $299,000 = $1,124,900Cost of goods sold = 60% x SalesEnding inventory = 30% x Cost of goods sold of the following month
Learn more about operating income here:
https://brainly.com/question/31877213
#SPJ11
