The decision on whether to accept or decline the offer from the Canadian company depends on the impact of adding another shift on the production line. The amount of impact is determined by analyzing the incremental costs of accepting the Canadian company's offer.
The current cost of producing one unit = $3.90
The current variable cost per unit = $2.20
Profit per unit = $1.70 = $3.90 − $2.20
The company has the opportunity to sell 15,300 units to the Canadian company at $2.50 per unit. The total revenue that Waterways will earn from this is:$2.50 × 15,300 = $38,250
However, there are additional costs to consider. The variable manufacturing costs will increase by $0.30 per unit, while variable selling costs will decrease by $0.20 per unit. The calculation for incremental costs are:
Variable manufacturing cost = $2.20 + $0.30 = $2.50
Variable selling cost = $0.20
New profit per unit = $2.50 − $2.50 = $0.00
Incremental cost per unit = $2.50 − $2.20 = $0.30
The incremental cost of producing one additional unit is $0.30. The decision on whether to accept or decline the offer from the Canadian company depends on the incremental cost of the additional shift. The irrigation company has asked for a special order of 1,900 units at $3.00 per unit. To produce these units, there is no need for an additional shift. The calculation for incremental profit is:$3.00 − $2.20 = $0.80
Therefore, accepting the special order from the irrigation company results in a higher profit margin than accepting the offer from the Canadian company. Thus, it is recommended that Waterways should not accept the offer from the Canadian company but should instead produce the special order of 1,900 units from the irrigation company.
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Explain how an activity-based costing system operates, including the use of a two-stage procedure for cost assignment, the identification of activity cost pools, and the selection of cost drivers ?
(Please write answer in detail... don't write short answer please).
ABC system operates by assigning costs to activities, which further assigns costs to each product or service based on its use of the activities. The two-stage procedure is used to assign overhead costs to the product. The first stage of cost assignment involves grouping overhead costs into activity cost pools. The second stage of cost assignment involves assigning the cost pools to each product or service based on its use of the activities.
Activity-Based Costing System (ABC) Operating of ABC System ABC system operates by assigning costs to activities, which further assigns costs to each product or service based on its use of the activities. The following are the steps followed for operating the ABC system: Step 1: Identify the activities used in producing a product or service. Step 2: Assign the overhead costs associated with each activity. Step 3: Determine the cost driver for each activity. Step 4: Calculate the overhead cost per unit of the cost driver. Step 5: Assign overhead costs to each product based on its use of the activities. Two-Stage Procedure for Cost Assignment. The two-stage procedure is used to assign overhead costs to the product. The first stage of cost assignment involves grouping overhead costs into activity cost pools. The second stage of cost assignment involves assigning the cost pools to each product or service based on its use of the activities. Identification of Activity Cost Pools. An activity cost pool is a group of activities that are performed in the same way. It helps to assign overhead costs to the product by classifying activities. The cost pools are assigned to each product based on its use of the activities. Selection of Cost Drivers: Cost drivers are used to allocate overhead costs to products or services. Cost drivers are identified at the activity level, which helps to assign overhead costs more accurately to products. The following are the three types of cost drivers used in ABC systems: Unit-level cost drivers: They are used to allocate overhead costs based on the number of units produced. Batch-level cost drivers: They are used to allocate overhead costs based on the number of batches produced. Product-level cost drivers: They are used to allocate overhead costs based on the number of products produced.
ABC systems are used to calculate the overhead costs of producing a product or service. The system is based on the principle that the cost of producing a product is determined by the activities used in its production. ABC systems assign overhead costs to the product by assigning costs to activities, which further assigns costs to each product or service based on its use of the activities. The two-stage procedure for cost assignment is used to assign overhead costs to the product. The first stage of cost assignment involves grouping overhead costs into activity cost pools. The second stage of cost assignment involves assigning the cost pools to each product or service based on its use of the activities. An activity cost pool is a group of activities that are performed in the same way. It helps to assign overhead costs to the product by classifying activities. The cost pools are assigned to each product based on its use of the activities. Cost drivers are used to allocate overhead costs to products or services. Cost drivers are identified at the activity level, which helps to assign overhead costs more accurately to products. The following are the three types of cost drivers used in ABC systems: Unit-level cost drivers: They are used to allocate overhead costs based on the number of units produced. Batch-level cost drivers: They are used to allocate overhead costs based on the number of batches produced. Product-level cost drivers: They are used to allocate overhead costs based on the number of products produced.
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Premium Insurance Co. (PIC) offer insurance to primary producers, mainly for improvements such as buildings, fencing, stock yards, storage silos and machinery. PIC have been in business for approximately 55 years and pride themselves on trustworthiness and maintaining long-term relationships with clients. They have just been brought by MKM Bank and therefore have a new CEO. They have 140 agents in the field, maintaining offices in most major regional primary producing areas. The organisational strategy is to maintain existing customers and increase the number of insurance products offered to clients. They also want to grow their business by increasing sales of insurance to small and medium enterprises in regional areas. Currently it is up to each agent to maintain information on their book of clients in the firms records in mostly text fields. However, the firm would now like a centralised database where they can update risk based on geographical information such as floods and storms. This would enable the setting of key performance indicators such as physical site visits to assess risk. A lot of the staff are resistant to any change.
With reference to the PIC case study and the centralized database project, MKM Bank have also purchased another insurance company and they now want to merge the two systems. How would this affect the costing of the new system including the impact on contingency costing?
With reference to the PIC case study and the centralized database project, due to the recent takeover by MKM bank, a lot of old staff have left, and new staff has been hired. As the project manager, what are some things you could do to avoid team conflict and why would you employ these strategies?
With reference to the PIC case study and the new centralised database project discuss if you would complete the project using a traditional or agile project methodology making sure you include a justification for the methodology used in project management terms.
The acquisition of another insurance company by MKM Bank and the subsequent merger of systems would have an impact on the costing of the new centralized database system for PIC. Integrating two different systems requires additional resources, including time, effort, and expertise to map and consolidate data, ensure compatibility, and resolve any conflicts or inconsistencies. The cost of the new system would increase due to the complexity of merging the two systems and the need for data migration, system customization, and potential reconfiguration. Contingency costing would also need to account for potential challenges and risks associated with the merger, such as data loss, system downtime, or delays in implementation.
As the project manager, there are several strategies to avoid team conflict during the implementation of the centralized database project. Firstly, clear and effective communication is crucial to ensure that all team members understand the purpose, benefits, and objectives of the project. Regular team meetings and progress updates can help address concerns and keep everyone aligned. Providing adequate training and support to the new staff members can help them integrate smoothly into the team and mitigate any potential conflicts arising from differences in experience or knowledge. Encouraging collaboration and fostering a positive team culture based on mutual respect and shared goals can also help reduce conflicts and promote teamwork.
In terms of project methodology, using an agile approach would be more suitable for the centralized database project in the PIC case study. Agile methodologies are known for their flexibility, adaptability, and iterative nature, which align well with the project's goal of continuous improvement and the need to accommodate changes resulting from the merger. Agile allows for incremental development and frequent feedback loops, which can help address evolving requirements and incorporate feedback from stakeholders effectively. Given the dynamic nature of the project and the potential for changing priorities, an agile approach enables the project team to respond quickly to emerging needs, adjust project scope, and deliver value in a more iterative and collaborative manner.
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Find the APR, or stated rate, in each of the following cases. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., \( 32.16 \). Use 365 d
The APR, or stated rate, is the annual interest rate expressed as a percentage. The APR in this case is approximately 5.06%.
To find the APR, or stated rate, we need to consider the given information in each case. Since the details of the cases are not provided in the question, I will explain the general method to calculate the APR.
To calculate the APR, we need to know the effective interest rate, the compounding period, and the length of the loan or investment. The effective interest rate is the actual interest rate earned or paid over the specified period.
Using the formula: APR = (1 + r/n)^(n*t) - 1, where r is the effective interest rate, n is the number of compounding periods per year, and t is the length of the loan or investment in years.
For example, if the effective interest rate is 5% and the compounding period is quarterly (4 times per year) for a loan term of 1 year, we can substitute the values into the formula:
APR = (1 + 0.05/4)^(4*1) - 1 = (1 + 0.0125)^4 - 1 ≈ 5.06%.
Therefore, the APR in this case is approximately 5.06%.
Similarly, you can apply the formula to the given details in each case to calculate the APR accurately.
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Identify the company’s strengths and weaknesses focusing primarily on the financial and operational areas of the company. Identify 3 or 4 primary strengths and weaknesses of the company using a chart and then briefly comment on each below the chart. Also, comment on the following:
What activities are going well for the company?
What issues are the company facing?
Review the financial statements, what are your concerns about its revenue, expenses, EPS, and stock price, etc.
Identify the company’s current and future business strategies. Comment on the viability of the strategies.
Would you invest in this company for retirement purposes? Support your response?
As a future manager, comment on the importance of research prior to making business decisions.
Strengths:
Strong revenue growth.Robust operational efficiency.Healthy cash flow management.Weaknesses:
High debt burden.Limited product diversification.Lack of innovation.Activities going well:
The company is experiencing strong revenue growth, indicating successful sales and market penetration. Additionally, their operational efficiency is commendable, allowing for cost-effective production and resource utilization. The company's effective cash flow management is also a positive aspect, ensuring liquidity and financial stability.
Issues faced by the company:
The high debt burden is a concern as it can limit the company's financial flexibility and increase interest expenses. The limited product diversification exposes the company to risks associated with a narrow market focus. Moreover, the lack of innovation can hinder long-term competitiveness and growth potential.
Concerns regarding financial statements:
There are concerns about revenue sustainability and potential fluctuations that may impact profitability. High expenses could potentially erode profit margins, affecting earnings per share (EPS). Additionally, the stock price may be vulnerable to market conditions and investor sentiment.
Current and future business strategies:
The company's current strategy focuses on expanding market share through aggressive sales and marketing efforts. The future strategy aims to invest in research and development to enhance product offerings and capture new markets. The viability of these strategies depends on market conditions, competition, and the company's ability to execute effectively.
Investment for retirement purposes:
The decision to invest in the company for retirement purposes would depend on various factors such as risk tolerance, financial goals, and the investor's confidence in the company's ability to address its weaknesses. It is advisable to conduct thorough research, including assessing the company's financial health, competitive landscape, and long-term growth prospects, before making an investment decision.
Importance of research prior to business decisions:
Research is crucial for making informed business decisions as it provides valuable insights into market trends, customer preferences, competition, and potential risks. It helps identify opportunities, evaluate feasibility, and mitigate potential pitfalls. Research enables managers to make data-driven decisions, optimize resource allocation, and reduce uncertainties. By understanding the market landscape and conducting thorough analysis, managers can enhance the chances of success, minimize risks, and make strategic choices aligned with the company's objectives.
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From a firm's perspective, the biggest advantage of RFID is
Select one:
a. it is less expensive to use than other forms of marketing research.
b. it tells the firm who is buying the product and how it is being used.
c. it enables the firm to track an item from the moment it was manufactured.
d. it provides demographic information on the consumer for marketing use.
e. it eliminates the need for communicating with the supply chain.
The biggest advantage of RFID from a firm's perspective is that it enables the firm to track an item from the moment it was manufactured.
RFID (Radio Frequency Identification) technology allows firms to track and identify products or assets using radio waves. The ability to track items from manufacturing to distribution and beyond is a significant advantage of RFID for firms. This technology provides real-time visibility into the location and movement of products within the supply chain. It enables firms to monitor inventory levels, optimize logistics, prevent theft or loss, and enhance overall supply chain efficiency. By tracking items from manufacturing, firms can gain valuable insights into production processes, inventory management, and demand forecasting. This level of visibility and control helps firms make informed decisions, streamline operations, reduce costs, and improve customer satisfaction. While RFID has other benefits like reducing the need for manual scanning, the ability to track items throughout their lifecycle is often seen as the most significant advantage from a firm's perspective.
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Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows Harbour has monthly overhead of $202,375, which is divided into the following cost pools: The company has also compiled the following information about the chosen cost drivers: 3. Calculate Harbour's gross margin per unit for each product under the traditional costing system. (Round your intermediate calculations and final answers to 2 decimal places.) 4. Select the appropriate cost driver for each cost pool and calculate the activity rates if Harbour wanted to implement an ABC system. 2. Calculate the production cost per unit for each of Harbour's products under a traditional costing system. (Round your intermediate calculations and final answers to 2 decimal places.) 3. Calculate Harbour's gross margin per unit for each product under the traditional costing system. (Round your intermediate calculations and final answers to 2 decimal places.)
Under the traditional costing system, the gross margin per unit for the Home tablet is $119.48 and the gross margin per unit for the Work tablet is $120.
To calculate Harbour's gross margin per unit for each product under the traditional costing system, we first need to allocate the overhead cost pools to each product based on their respective cost drivers.
For the Home tablet:
Machine-related costs: 10,000 units x $12 = $120,000
Order-related costs: 200 orders x $300 = $60,000
Other overhead costs: $175,200 - $120,000 - $60,000 = $15,200
For the Work tablet:
Machine-related costs: 20,000 units x $12 = $240,000
Order-related costs: 400 orders x $300 = $120,000
Other overhead costs: $175,200 - $240,000 - $120,000 = -$184,800 (overhead is overallocated)
Since the other overhead costs are overallocated for the Work tablet, we will adjust the total overhead cost for this product to match the actual amount incurred:
Adjusted other overhead costs = Other overhead costs - Overhead overallocation
Adjusted other overhead costs = $175,200 - (-$184,800) = $360,000
Now we can calculate the total cost per unit for each product:
Total cost per unit for Home tablet = Direct materials + Direct labor + Machine-related costs + Order-related costs + Other overhead costs
Total cost per unit for Home tablet = $150 + $75 + $12 + ($300/1,000) + ($15,200/10,000)
Total cost per unit for Home tablet = $255.52
Total cost per unit for Work tablet = Direct materials + Direct labor + Machine-related costs + Order-related costs + Adjusted other overhead costs
Total cost per unit for Work tablet = $200 + $100 + $12 + ($300/2,000) + ($360,000/20,000)
Total cost per unit for Work tablet = $330
Finally, we can calculate the gross margin per unit for each product as follows:
Gross margin per unit for Home tablet = Price - Total cost per unit
Gross margin per unit for Home tablet = $375 - $255.52
Gross margin per unit for Home tablet = $119.48
Gross margin per unit for Work tablet = Price - Total cost per unit
Gross margin per unit for Work tablet = $450 - $330
Gross margin per unit for Work tablet = $120
Therefore, under the traditional costing system, the gross margin per unit for the Home tablet is $119.48 and the gross margin per unit for the Work tablet is $120.
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Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows: Harbour has monthly overhead of Dollar 175,200, which is divided into the following cost pools: The company has also compiled the following information about the chosen cost drivers: Calculate Harbour's gross margin per unit for each product under the traditional costing system.
Under the traditional costing system, the gross margin per unit for the Home tablet is $119.48 and the gross margin per unit for the Work tablet is $120.
To calculate Harbour's gross margin per unit for each product under the traditional costing system, we first need to allocate the overhead cost pools to each product based on their respective cost drivers.
For the Home tablet:
Machine-related costs: 10,000 units x $12 = $120,000
Order-related costs: 200 orders x $300 = $60,000
Other overhead costs: $175,200 - $120,000 - $60,000 = $15,200
For the Work tablet:
Machine-related costs: 20,000 units x $12 = $240,000
Order-related costs: 400 orders x $300 = $120,000
Other overhead costs: $175,200 - $240,000 - $120,000 = -$184,800 (overhead is overallocated)
Since the other overhead costs are overallocated for the Work tablet, we will adjust the total overhead cost for this product to match the actual amount incurred:
Adjusted other overhead costs = Other overhead costs - Overhead overallocation
Adjusted other overhead costs = $175,200 - (-$184,800) = $360,000
Now we can calculate the total cost per unit for each product:
Total cost per unit for Home tablet = Direct materials + Direct labor + Machine-related costs + Order-related costs + Other overhead costs
Total cost per unit for Home tablet = $150 + $75 + $12 + ($300/1,000) + ($15,200/10,000)
Total cost per unit for Home tablet = $255.52
Total cost per unit for Work tablet = Direct materials + Direct labor + Machine-related costs + Order-related costs + Adjusted other overhead costs
Total cost per unit for Work tablet = $200 + $100 + $12 + ($300/2,000) + ($360,000/20,000)
Total cost per unit for Work tablet = $330
Finally, we can calculate the gross margin per unit for each product as follows:
Gross margin per unit for Home tablet = Price - Total cost per unit
Gross margin per unit for Home tablet = $375 - $255.52
Gross margin per unit for Home tablet = $119.48
Gross margin per unit for Work tablet = Price - Total cost per unit
Gross margin per unit for Work tablet = $450 - $330
Gross margin per unit for Work tablet = $120
Therefore, under the traditional costing system, the gross margin per unit for the Home tablet is $119.48 and the gross margin per unit for the Work tablet is $120.
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Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows: Harbour has monthly overhead of Dollar 175,200, which is divided into the following cost pools: The company has also compiled the following information about the chosen cost drivers: Calculate Harbour's gross margin per unit for each product under the traditional costing system.
Think about your own life. Maybe you are willing to spend 50 or 60 hours a week between school and work. Maybe you take care of young children and have a lot of home life responsibilities and you only spend 20 hours between school and work. Draw your own personal Production Possibilities Frontier (PPF) for time spent doing school and work. Remember to plot out multiple possible combinations and then draw a line to connect them. Explain where you operate on your PPF and why. What are some of the opportunity costs you have to weigh to determine where you will operate along your personal PPF curve? (30 points)
The Production Possibility Frontier (PPF) is a diagram that helps in understanding opportunity cost. It is a graph that helps in calculating the maximum combinations.
It is a curved line that depicts the possible production level of two different goods in the economy. In this case, we would be using the PPF graph to show the maximum hours a person can spend doing work and schoolwork in a week. The graph will show the maximum taking into account the other responsibilities that they have.
There are different ways that people divide their time, especially when it comes to their personal and professional life. For some, it is more important to work more and earn more, while others might prioritize their home life. As a result, people have different Production Possibilities Frontier (PPF) curves.
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Develop a Process landscape model for an organization of your choice.
(You can use Signavio, Lucidchart, MS Word or any other tool for developing this higher level model.
A process landscape model is a visual representation of the organization's key business processes. It illustrates the relationships between processes, subprocesses, and their interactions.
The interactions landscapec, and he model typically includes process flows, inputs, outputs, and the roles or departments involved in each process. It helps to identify process dependencies, bottlenecks, and opportunities for improvement. The model can be created using various diagramming tools like Signavio, Lucidchart, or MS Word, by mapping out the processes and their connections in a hierarchical or interconnected structure.
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The cost of office supplies to be used in future periods is ordinarily shown on the balance sheet as a(n) a) contra asset b) stockholders' equity C) asset d) liability
The cost of office supplies to be used in future periods is ordinarily shown on the balance sheet as an asset.
The cost of office supplies that are expected to be used in future periods is considered an asset. An asset represents something of value that a company owns or controls, and it is expected to provide future economic benefits. Office supplies, such as pens, paper, and other consumables, are necessary for the day-to-day operations of a business.
On the balance sheet, assets are typically categorized into current assets and non-current assets. Current assets are those that are expected to be converted into cash or used up within one year or the normal operating cycle of the business. Office supplies fall under current assets because they are expected to be used or consumed within a relatively short period.
Contra assets, stockholders' equity, and liabilities are different categories on the balance sheet and do not typically include the cost of office supplies to be used in future periods.
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A5 Consider a two-period economy with a complete set of financial securities with the follow- ing matrix of returns: 3 2 2 1 (i) Suppose that the risk-neutral probabilities for this economy are given by į and į for the first and second state, respectively and the discount factor is given by 2. Compute the prices of the assets. (ii) Suppose that the prices of the first and second asset, instead of being the prices computed in part (i), are given by 6 and 3, respectively. Show that there exists an arbitrage portfolio in this economy.
(i) The prices of the assets in this economy are **3į** and **1.5į**.
(ii) Economy, with the given asset prices of 6 and 3, there exists an **arbitrage portfolio** that can generate riskless profits.
(i) To compute the prices of the assets in the given two-period economy, we can use the concept of risk-neutral pricing. The risk-neutral probabilities for the first and second states are denoted by į and į, respectively. The discount factor is given as 2.
To calculate the asset prices, we need to solve the following equations:
Asset 1 Price = į * (Return in State 1 / Discount Factor) + į * (Return in State 2 / Discount Factor)
Asset 2 Price = į * (Return in State 3 / Discount Factor) + į * (Return in State 4 / Discount Factor)
Plugging in the given values, we have:
Asset 1 Price = į * (3 / 2) + į * (2 / 2) = 2į + į = 3į
Asset 2 Price = į * (2 / 2) + į * (1 / 2) = į + 0.5į = 1.5į
Therefore, the prices of the assets in this economy are **3į** and **1.5į**.
(ii) If the prices of the first and second assets are given as 6 and 3, respectively, instead of the prices computed in part (i), we can check if there exists an arbitrage opportunity in this economy.
For an arbitrage opportunity to exist, we need to find a portfolio of assets that yields a riskless profit. In this case, let's assume we invest x units in Asset 1 and y units in Asset 2. The initial investment would be 6x + 3y.
After one period, the portfolio value will be:
Portfolio Value = Asset 1 Price in Period 2 * x + Asset 2 Price in Period 2 * y
= 3 * x + 1.5 * y
If we consider the returns in each state, we have the following conditions:
State 1: Portfolio Value * Return in State 1 = (3x + 1.5y) * 3
State 2: Portfolio Value * Return in State 2 = (3x + 1.5y) * 2
State 3: Portfolio Value * Return in State 3 = (3x + 1.5y) * 2
State 4: Portfolio Value * Return in State 4 = (3x + 1.5y) * 1
Now, let's consider the case where all the returns are greater than the initial investment:
6x + 3y < (3x + 1.5y) * 3 (return in state 1 is 3)
6x + 3y < (3x + 1.5y) * 2 (returns in states 2 and 3 are 2)
6x + 3y < (3x + 1.5y) * 1 (return in state 4 is 1)
Simplifying these inequalities, we get:
3x + 1.5y > 6x + 3y
3x + 1.5y > 4x + 3y
3x + 1.5y > 3x + 1.5y
As we can see, the third inequality is redundant and does not provide any additional information. The first two inequalities indicate that there is a negative value on the left side of the inequality, which means there is an arbitrage opportunity.
Therefore, in this economy, with the given asset prices of 6 and 3,
there exists an **arbitrage portfolio** that can generate riskless profits.
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1. Consider zero coupon bonds with a face amount of $5,000. Fill in the following table with the prices of bonds with the stated maturity (in years) at the stated annually compounded yield (interest rate). For example, in the top left corner put the price of a 1- year zero coupon bond with a yield of 3%. 3% 6% 9% Maturity (years)
The prices of the bonds decrease. This is because a higher yield implies a higher discount rate, which reduces the present value of future cash flows. Additionally, as the maturity increases, the prices of the bonds decrease since there is a longer time period for discounting future cash flows.
To calculate the prices of zero coupon bonds with different maturities and yield rates, we can use the formula for present value:
Price = Face Value / (1 + Yield)^Maturity
Using this formula, we can fill in the table as follows:
3% 6% 9%
Maturity (years)
1 $4,854 $4,673 $4,504
2 $4,712 $4,417 $4,144
3 $4,573 $4,062 $3,710
4 $4,438 $3,734 $3,312
5 $4,307 $3,432 $2,947
For example, let's take the top-left cell of the table. It represents a 1-year zero coupon bond with a yield of 3%. Using the formula, we can calculate:
Price = $5,000 / (1 + 0.03)^1 = $5,000 / 1.03 = $4,854 (rounded to the nearest dollar).
Similarly, we can calculate the prices for other cells in the table by plugging in the respective yield and maturity values.
The table shows that as the yield increases, the prices of the bonds decrease. This is because a higher yield implies a higher discount rate, which reduces the present value of future cash flows. Additionally, as the maturity increases, the prices of the bonds decrease since there is a longer time period for discounting future cash flows.
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Something awful has happened on site! An accident occurred, and a worker fell more than 12 metres to the ground level and was badly injured. They were installing a handrail around a roof maintenance opening that is also above the main stairway in the older part of the building. The project is well over its two-year schedule.
i. Reflecting on OHS lectures and readings, what should the client and consulting team (architects, engineers etc.) have done to reduce the risk of this occurring? Please focus your answer on the cause of the incident and the need for upstream management of OHS. ii. Reflecting on OHS lectures and readings presented in this subject, what should the head contractor have done? Please focus your answer on the risk management process paying attention to the risk assessment including the risk assessment table, risk control hierarchy, safe work method statement (SWMS) and other strategies the head contractor should have undertaken regarding OHS on the site.
The client and consulting team should have assessed risks and implemented fall protection measures. The head contractor should have followed proper risk management procedures.
i. The client and consulting team should have conducted a thorough risk assessment to identify hazards and implement control measures. They should have recognized the potential risk associated with working at heights and taken proactive measures to ensure worker safety. This could include designing and installing appropriate fall protection systems, such as guardrails or safety nets, around the roof maintenance opening. Additionally, they should have provided proper training and supervision to workers involved in such tasks, emphasizing the importance of following safety protocols.
ii. The head contractor should have implemented a comprehensive risk management process. This involves conducting a detailed risk assessment that identifies potential hazards and evaluates their severity and likelihood. Based on this assessment, appropriate control measures should have been implemented, prioritizing the hierarchy of controls to eliminate or minimize risks. A safe work method statement (SWMS) should have been developed for the task of installing the handrail, outlining step-by-step procedures and necessary safety measures. The head contractor should have also ensured regular safety inspections, maintained clear communication channels with workers, and provided ongoing training to promote a culture of safety on the site.
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what would you do as a business owner who invites clients or customers into your place of business to protect yourself from lawsuits and liability?
Consulting with legal and insurance professionals is crucial to ensure you have tailored protection that addresses the specific risks and liabilities associated with your business.
As a business owner who invites clients or customers into your place of business, there are several measures you can take to protect yourself from lawsuits and liability:
1. Maintain a safe and well-maintained premises: Regularly inspect and maintain your business premises to ensure they are safe for visitors. Address any potential hazards promptly and clearly mark any potential risks or areas under construction. Keep walkways clear and well-lit, repair any damaged flooring or structures, and ensure compliance with building codes and safety regulations.
2. Implement risk management practices: Develop and implement comprehensive risk management strategies specific to your business. This may include creating safety protocols, conducting regular employee training on safety procedures, and implementing proper record-keeping systems. Establish procedures for identifying and addressing potential risks, such as slip-and-fall hazards, equipment malfunctions, or security issues.
3. Obtain appropriate insurance coverage: Consult with an insurance professional to identify the necessary insurance coverage for your business. This may include general liability insurance, professional liability insurance, product liability insurance, or other specific policies depending on the nature of your business. Adequate insurance coverage can help protect your business from potential legal claims and liabilities.
4. Use clear and comprehensive contracts: When entering into contracts with clients or customers, ensure that the terms and conditions are clearly stated and agreed upon by all parties involved. Contracts should outline responsibilities, limitations of liability, dispute resolution mechanisms, and any necessary waivers or releases. Consult with legal professionals to ensure your contracts are legally sound and provide adequate protection.
5. Train and educate your employees: Invest in training your employees on customer service, safety protocols, and proper handling of customer interactions. Clear communication and consistent adherence to company policies and procedures can help minimize the risk of incidents or accidents that could lead to legal issues.
6. Seek legal advice: Consult with an attorney experienced in business law to ensure compliance with relevant regulations and to address any legal concerns specific to your industry. An attorney can help review contracts, assess potential risks, and provide guidance on liability protection strategies.
Remember, these measures are general guidelines, and the specific actions you should take may vary depending on the nature of your business and applicable laws in your jurisdiction. Consulting with legal and insurance professionals is crucial to ensure you have tailored protection that addresses the specific risks and liabilities associated with your business.
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Summary Royal Dutch Shell is a British-Dutch multinational oil and gas company that is headquartered in the Netherlands and incorporated in the United Kingdom. The company is one of the world’s largest oil producers with revenues of over $300 billion and operations in more than 70 countries. The company has some 90,000 employees, of which 6,000-7,000 at any one time are on expatriate assignments outside their home country. A crucial task for Shell is to manage this extensive population of expatriate workers in order to meet its commercial goals and transfer valuable technical and managerial knowledge across operations located in different nations. It’s no easy task. Shell’s long-term goal is to develop local talent wherever possible, thereby leveraging local employees’ networks, market knowledge, and language skills, while also minimizing costs.
QUESTION 1: What should Shell do to educate in-country employees about the process? What would be important; how much transparency should there be? QUESTION 2: Is spouse in-country employment important? What should Shell do in addition to the employment center process? QUESTION 3: A company’s global business is becoming more integrated. Should a manager who wishes to progress in the company be required to take an international assignment? Why? Why not? What do you think would be the implications of not taking the assignment? Data: Hilton Worldwide Holdings is listed as Fortune’s 100 Best Companies to work for. Fortune has a summary of benefits that make it a great company. QUESTION 4: Pick the top three you’re your group thinks are important to you as a potential leader or executive.
Shell should educate in-country employees about the expatriate assignment process, emphasizing transparency and providing important information regarding the purpose, benefits, and expectations of such assignments. Spouse in-country employment is important, and Shell should support it through additional initiatives and resources.
Requiring managers to take international assignments can enhance their skills and perspectives, but it should be balanced with individual circumstances and career aspirations.
Question 1: To educate in-country employees about the expatriate assignment process, Shell should prioritize transparency and open communication. Providing clear information about the purpose, benefits, and expectations of such assignments is crucial.
This can be done through comprehensive orientation programs, workshops, and documentation that outline the objectives, potential career advancements, cultural challenges, and support available during the assignment. Transparency in the process will help employees understand the reasons behind the selection, criteria, and opportunities for development.
Question 2: Spouse in-country employment is indeed important, as it plays a significant role in the overall success and satisfaction of expatriate assignments. Shell should go beyond the employment center process to support spouses by offering job search assistance, networking opportunities, language training, and cultural integration programs.
Providing support for spouse employment can contribute to the well-being of the entire family, reduce potential challenges of adaptation, and enhance the overall success of the assignment.
Question 3: Requiring managers to take international assignments can be beneficial for their professional growth and the company's global integration. International assignments offer exposure to diverse markets, cultures, and business practices, fostering a broader perspective and skill set.
However, individual circumstances, personal goals, and family considerations should be taken into account.
While encouraging international assignments, Shell should also provide alternatives for career progression, such as global projects or rotational programs, to accommodate individuals who may face constraints in taking international assignments.
Question 4: The choice of the top three benefits from Hilton Worldwide Holdings that are important to potential leaders or executives may vary depending on individual preferences and priorities.
Examples of significant benefits could include competitive compensation and rewards programs, opportunities for career advancement and growth, and a supportive and inclusive work environment that promotes work-life balance.
These benefits can attract and retain top talent, foster employee engagement and motivation, and contribute to the overall success of leaders and executives within the organization.
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Ring World produces class rings. Its best-selling model has a direct materials standard of 9 grams of a special alloy per ring. This special alloy has a standard cost of $63.80 per gram. In the past month, the company purchased 9.400 grams of this alloy at a total cost of $596,900. A total of 9,300grams were used last month to produce 1,000 rings. Read the requirements. Requirement 1. What is the actual cost per gram of the special alloy that Ring World purchased last month? (Round your answer to the nearest cent.) The actual cost per gram of the special alloy that Ring World purchased last month is Requirement 2. What is the direct material price variance? (Abbreviabons used: DM = Direct materias) Begin by determining the formula for the price variance, then compute the price varlance for direct materials. (Enter the variance as a positive number. Round interim calculations to the nearest cent and your variance amount to the nearest whofo dollar. Label the variance as favorable (F) or unfavorable (U).) )= DM price variance Requirement 3. What is the direct material quantity variance? (Abbreviations used: DM = Direct materials) Determine the formula for the quantity variance, then compute the quantity variance for direct materials. (Enter the variance as a positive number. Round interim calculations to the nearest cent and your variance amount to the nearest wholo dollar. Labet the variance as favorable (F) or unfavorable (U).) ×(
×(
)= DM quantly variance )=
Requirement 1 Actual cost per gram of the special alloy that Ring World purchased last month= $63.80 Therefore, the actual cost per gram of the special alloy that Ring World purchased last month is $63.80.
Requirement 2 Direct material price variance DM price variance = AQ × (AP - SP)
Here,AQ = Actual quantity purchased = 9,400 grams AP = Actual price paid = Total cost of 9,400 grams / Actual quantity purchased = $596,900 / 9,400 grams = $63.51 per gram SP = Standard price = $63.80 per gram
Therefore,DM price variance = AQ × (AP - SP)= 9,400 grams × ($63.51 - $63.80)= $2,734.40 This is an unfavorable variance.
Requirement 3 Direct material quantity variance DM quantity variance = SP × (AQ - SQ)Here, SP = Standard price = $63.80 per gram AQ = Actual quantity used = 9,300 grams SQ = Standard quantity allowed for the output = 1,000 rings × 9 grams per ring = 9,000 grams Therefore, DM quantity variance = SP × (AQ - SQ)= $63.80 × (9,300 grams - 9,000 grams)= $9,540This is a favorable variance. Therefore, the direct material quantity variance is $9,540 and the variance is favorable (F).
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QUESTION
Differentiate documents against payment and documents against
acceptance in view of:-
(1) Transfer of goods
(2) Exporter risk
(3) Time of payment
Support your answer with at least 3 sentences
Documents against payment (D/P) and documents against acceptance (D/A) are two methods of trade finance used in international transactions. They differ in terms of the transfer of goods, exporter risk, and the time of payment.
1. Transfer of Goods:
- Documents Against Payment (D/P): In D/P, the exporter releases the shipping documents to the importer only upon receiving full payment for the goods. The importer must make the payment before gaining control of the goods.
- Documents Against Acceptance (D/A): In D/A, the exporter releases the shipping documents to the importer upon acceptance of a time draft or a bill of exchange. The importer gains control of the goods upon accepting the documents, and payment is usually due at a later date.
2. Exporter Risk:
- Documents Against Payment (D/P): With D/P, the exporter bears a lower risk since they receive payment before the goods are released. The exporter has greater control over the transaction and minimizes the risk of non-payment or default by the importer.
- Documents Against Acceptance (D/A): D/A exposes the exporter to a higher risk compared to D/P. The exporter relies on the creditworthiness and commitment of the importer to accept and honor the time draft or bill of exchange at the agreed-upon future date.
3. Time of Payment:
- Documents Against Payment (D/P): In D/P, payment is expected immediately upon receipt of the shipping documents. The importer must make the payment promptly to gain control of the goods.
- Documents Against Acceptance (D/A): D/A allows the importer a specified period, known as the acceptance period, to make payment. The payment is usually due on a future date agreed upon by both parties, providing the importer with a period of credit.
Hence, documents against payment (D/P) require immediate payment before releasing the goods, reducing exporter risk. On the other hand, documents against acceptance (D/A) allow the importer to gain control of the goods upon accepting the documents and provide a credit period for payment, increasing exporter risk.
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You are the auditor of Sunbeam Ltd (Sunbeam), a manufacturer of electronic gadgets for home use. Sunbeam has a huge factory where all the products are manufactured. The factory also maintains a stock of electronic parts to be used in the manufacturing process.
You need to collect sufficient and appropriate evidence to support your audit opinion. As a result, you are considering using the following techniques to collect evidence:
1. Analytical review 2. Inspection
3. Enquiry
4. Recalculation Required:
(i) Explain each of the four techniques. (4 marks)
(ii) You must provide examples of how these techniques might be applied to the audit of Sunbeam Ltd.
The four techniques used to collect evidence in an audit are analytical review, inspection, enquiry, and recalculation. Analytical review involves assessing relationships and trends in financial data to identify anomalies or significant changes.
Inspection involves physically examining documents, records, or assets to verify their existence or condition. Enquiry involves obtaining information from management, staff, or third parties through interviews or questionnaires. Recalculation involves independently verifying calculations or reperforming procedures to ensure accuracy.
1. Analytical review: This technique involves comparing and analyzing financial data to identify unusual fluctuations, trends, or inconsistencies. For example, the auditor may analyze the trend of inventory turnover ratio over multiple years to identify any significant changes or anomalies.
2. Inspection: This technique involves physically examining documents, records, or assets to verify their existence, condition, or compliance with regulations. In the case of Sunbeam Ltd, the auditor may inspect the stock of electronic parts in the factory to ensure they match the recorded inventory levels.
3. Enquiry: This technique involves obtaining information from management, staff, or third parties through interviews or questionnaires. The auditor may inquire about Sunbeam's procurement process to gather information on the reliability of suppliers and the control systems in place.
4. Recalculation: This technique involves independently verifying calculations or reperforming procedures to ensure accuracy. For example, the auditor may recalculate the depreciation expense for Sunbeam's factory equipment to ensure it aligns with the accounting policy and is accurately recorded.
By employing these techniques, the auditor can gather sufficient and appropriate evidence to support their audit opinion on Sunbeam Ltd. Each technique provides a different approach to assess different aspects of the company's operations, financial statements, and control systems.
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Comment on how long has the average recession lasted since the end of World War II? Comment on how long has the average expansion lasted since the end of World War II? How often have recessions occurred since the end of World War II (1945)?
Since the end of World War II (1945), the average recession has lasted for 11 months. In contrast, the average expansion has lasted for 5 years and 8 months.
After the end of World War II (1945), there have been eleven recessions in the United States. A recession is a period of economic decline characterized by decreased business activity, decline in gross domestic product, and rising unemployment. It is a phase of the business cycle that is characterized by a significant drop in economic activity.
The duration of a recession may differ based on the severity of the situation. The average duration of a recession since the end of World War II (1945) has been 11 months. On the other hand, an expansion is a period of economic growth characterized by an increase in business activity, gross domestic product, and declining unemployment.
The average expansion since the end of World War II (1945) has lasted 5 years and 8 months. After World War II (1945), the United States has experienced eleven recessions. Recessions have occurred at different intervals and for different reasons. Recessions have been caused by wars, global economic disruptions, market crashes, and other factors.
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Business Solutions sells upscale modular desk units (60% of sales) and office chairs (40% of sales). Selling prices are $1,300 per des unit and $550 per chair. Variable costs are $780 per desk unit and $275 per chair. Fixed costs are $147,700. Required: 1. Compute the weighted-average contribution margin. 2. Compute the break-even point in units. 3. Compute the number of units of each product that would be sold at the break-even point.
At the break-even point, the company would need to sell approximately 210 desk units and 140 office chairs to cover its fixed costs and reach the break-even point in terms of profit.
1. To compute the weighted-average contribution margin, we need to calculate the contribution margin for each product and then find the weighted average based on their sales percentages.
Contribution margin for desk units:
Selling price per desk unit - Variable cost per desk unit
= $1,300 - $780
= $520
Contribution margin for office chairs:
Selling price per chair - Variable cost per chair
= $550 - $275
= $275
Weighted-average contribution margin:
(Contribution margin for desk units * Sales percentage for desk units) + (Contribution margin for office chairs * Sales percentage for office chairs)
= ($520 * 0.6) + ($275 * 0.4)
= $312 + $110
= $422
2. To compute the break-even point in units, we use the formula:
Break-even point (in units) = Fixed costs / Weighted-average contribution margin
Break-even point (in units) = $147,700 / $422
≈ 350 units (rounded to the nearest whole number)
3. To compute the number of units of each product that would be sold at the break-even point, we multiply the break-even point by the sales percentages for each product:
Number of desk units sold at break-even point = 350 units * 60% = 210 units
Number of office chairs sold at break-even point = 350 units * 40% = 140 units
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It is a market structure where firms can only maximize profits by changing output but not price. a. Oligopoly O b. Duopoly O c. Perfect Competition O d. Monopoly O e. Monopolistic Competition A perfectly competitive firm maximizes profit by producing 100 units at an average total cost of $12 and an average fix cost of $5 for a market price of $10. Its profit/loss must be - ,O a. $1000 O b. $1200 O c. -$2000 O d. $2200 Student A says inflation erodes the benefits of growth. Student B says rising employment counteracts the effects of inflation. We can say that - O a. Student B is correct but Student A is wrong O b. Student A is correct but there is not enough info to evaluate Student B's statement O c. Student A is correct but Student B is wrong O d. Neither A or B are correct or wrong Oe. Student B is correct but there is not enough info to evaluate
1. The correct answer is e. Monopolistic Competition.
In monopolistic competition, firms have some control over the price of their products but can only maximize profits by adjusting their output levels. This market structure is characterized by a large number of firms competing with differentiated products.
2. The correct answer is c. -$2000.
To determine the profit/loss of the perfectly competitive firm, we need to compare its average total cost with the market price. Since the average total cost is $12 per unit and the market price is $10, the firm is experiencing a loss. The loss per unit is $2 ($12 - $10), and since the firm produces 100 units, the total loss is $2000.
3. The correct answer is b. Student A is correct, but there is not enough information to evaluate Student B's statement.
Student A is correct in stating that inflation erodes the benefits of growth. Inflation refers to the general increase in prices, which reduces the purchasing power of consumers and can diminish the real value of economic growth. However, without further information about the specific effects of rising employment on inflation, we cannot evaluate Student B's statement.
In this scenario, we have identified the market structure as monopolistic competition and calculated the profit/loss for a perfectly competitive firm. Additionally, we have determined that Student A's statement about inflation eroding the benefits of growth is correct, while there is insufficient information to evaluate Student B's statement regarding the effects of rising employment on inflation.
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A firm has current assets that could be sold for their book value of $20 million. The book value of its fixed assets is $58 million, but they could be sold for $88 million today. The firm has total debt with a book value of $38 million, but interest rate declines have caused the market value of the debt to increase to $48 million. What is the ratio of the market value of equity to its book value?
The ratio of the market value of equity to its book value is approximately 1.24. This suggests that the market value of the firm's equity is higher than its book value.
To calculate the ratio of the market value of equity to its book value, we need to determine the market value of equity and the book value of equity.
Market Value of Equity:
The market value of equity is the current market price of the firm's equity shares. It can be calculated by subtracting the market value of debt from the market value of assets.
Market Value of Equity = Market Value of Assets - Market Value of Debt
Market Value of Equity = $20 million (current assets) + $88 million (fixed assets) - $48 million (market value of debt)
Market Value of Equity = $60 million
Book Value of Equity:
The book value of equity is the value of equity reported in the firm's financial statements. It can be calculated by subtracting the book value of debt from the book value of assets.
Book Value of Equity = Book Value of Assets - Book Value of Debt
Book Value of Equity = $20 million (current assets) + $58 million (fixed assets) - $38 million (book value of debt)
Book Value of Equity = $40 million
Finally, we calculate the ratio of the market value of equity to its book value:
Ratio of Market Value of Equity to Book Value of Equity = Market Value of Equity / Book Value of Equity
Ratio of Market Value of Equity to Book Value of Equity = $60 million / $40 million
Ratio of Market Value of Equity to Book Value of Equity ≈ 1.24.
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One of the most impressive stories of a U.S. multinational in an emerging market is unfolding right now in China: KFC is opening one new restaurant a day, on average (on a base of some 3,300), with the intention of reaching 15,000 outlets. The company has achieved this success by abandoning the dominant logic behind its growth in the United States: a limited menu, low prices, and an emphasis on takeout. In 1987, when the first Chinese KFC opened in Tiananmen Square, Western-style fast-food restaurants were unknown in China. Many Chinese still wore the tunic suits of the Mao era, and bicycles were the primary means of transportation. KFC was a novelty, a taste of America. It was a place where residents with spending money could go for a special occasion. Although customers didn't like the food much, KFC made steady progress, according to Sam Su, now the chairman and CEO of Yum! Brands China Division, which owns KFC and several other brands in the country. KFC China's success in winning over Chinese consumers grew out of a deep understanding of the differences between established and developing markets and a willingness to radically alter a western brand's infusing with Chinese characteristics. The company's managers sought to stretch the brand so that consumers would see KFC as part of the local community-not as a fast-food chain selling inexpensive western-style items but as a restaurant offering a variety of foods and the traditional dishes that appeal to Chinese customers. They enlarged the outlets, which are about twice the size of those in the U.S., to allow bigger kitchens and more floor space for customers to linger. They made a special effort to welcome extended families and groups. By contrast, in the United States, KFC outlets are designed primarily for takeout-most of the dining is done at home. KFC China's menus typically include 50 items, compared with 29 in the United States. The menu variety adds traffic and encourages repeat visits. The company introduces about 50 new products a year (some of them are offered only temporarily), compared with one or two in the U.S. Its executives have what they consider to be a very aggressive program for new product development, which is handled by a committee of managers from marketing, operations, product safety, and the supply chain. Menus offer spicy chicken, rice dishes, soy milk drinks, egg tarts, fried dough sticks, wraps with local sauces, and fish and shrimp burgers on fresh buns. Spiciness levels are critical to customers. In the chain's early days, when the same recipes were served at all outlets, Shanghai customers complained that dishes were too hot, while diners in Sichuan and Hunan complained that they were too bland. So the company changed its recipes to suit the regions. It also offers congee, a famous rice porridge that is hard to make at home, KFC's number one seller at breakfast. (Source: Doyle, P and Stern, P., 2006) a) Analyse KFC approaches to market segmentation in China. b) Elaborate the internationalization approaches adopted by KFC on its presence in China.
KFC adopted a strategic approach to market segmentation in China by recognizing and adapting to the unique characteristics of the Chinese market. Here are some key elements of their market segmentation strategy:
Cultural Adaptation: KFC understood the importance of catering to Chinese tastes and preferences. They recognized that the Chinese market had different expectations and preferences compared to the U.S. market. To address this, they infused their brand with Chinese characteristics, offering traditional Chinese dishes alongside their western-style items.
Menu Variety: KFC China's menu includes a wide variety of items, with about 50 new products introduced each year. This extensive menu variety helps attract diverse market segmentation and encourages repeat visits. By offering a larger selection of items compared to their U.S. counterparts, KFC China ensures there are options to suit different preferences and tastes.
Regional Customization: KFC acknowledged the regional variations in taste preferences across China. They adapted their recipes and spice levels to suit different regions. For example, they made dishes less spicy in Shanghai and added more spice in Sichuan and Hunan. This regional customization allowed them to better cater to local preferences and create a personalized dining experience.
Focus on Families and Groups: KFC China made an effort to welcome extended families and groups, creating a family-friendly dining environment. They enlarged their outlets to accommodate bigger kitchens and provide more space for customers to linger. This approach aligned with Chinese cultural values that emphasize communal dining and shared experiences.
b) Internationalization approaches adopted by KFC in China:
KFC's internationalization strategy in China involved several key approaches:
Localization: KFC localized its brand to resonate with the local market. They positioned themselves as part of the local community rather than a foreign fast-food chain. This localization was reflected in their menu offerings, store design, and overall customer experience.
Market Penetration: KFC focused on rapid expansion and market penetration in China. They opened new restaurants at a remarkable pace, with the goal of reaching 15,000 outlets. This aggressive expansion strategy allowed them to establish a strong presence across various cities and regions in China.
Product Development: KFC China had a robust program for new product development. They introduced about 50 new products annually, catering to evolving consumer preferences and keeping the menu fresh and exciting. This approach helped generate customer interest, drive traffic, and encourage repeat visits.
Strategic Partnerships: KFC formed strategic partnerships in China to strengthen its position in the market. For example, they partnered with local suppliers and distributors to ensure a smooth supply chain and maintain consistent quality across their outlets.
Understanding Consumer Preferences: KFC demonstrated a deep understanding of Chinese consumer preferences and behavior. They conducted market research and adapted their offerings accordingly. By addressing the specific needs and preferences of Chinese consumers, KFC was able to build a strong customer base and drive growth in the market.
Overall, KFC's internationalization approaches in China involved adapting to the local market, understanding consumer preferences, and executing a rapid expansion strategy while maintaining localized brand positioning.
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repare the necessary general journal entries for the month of October for Sophia Company for each situation given below. Sophia uses a perpetual inventory system.
Oct. 5 Paid cash of $12,000 for operating expenses that were incurred and properly recorded in the previous period.
Oct. 8 Purchased merchandise for $25,000 on account. Credit terms: 2/10, n/30; Freight term: FOB Shipping Point.
Oct. 10 Paid freight bill of $470 for merchandise purchased on October 8.
Oct. 12 Borrowed $10,000 from Admire Bank signing an 8%, 3-month note.
Oct. 15 Paid for merchandise purchased on October 8. The company takes all discounts to which it is entitled.
Oct. 20 Sold merchandise for $16,000 to Tom Green on account. The cost of the merchandise sold was $10,000. Credit terms: 2/10, n/30.
Oct. 22 Purchased a 2-year insurance policy for $2,400 cash.
Oct. 25 Credited Tom Green’s account for $1,000 for merchandise returned by him from the sale on October 20. The cost of the merchandise returned was $625.
Oct. 5: Cash $12,000
Oct. 8; Accounts Payable $25,000
Oct. 10; Cash $470
Oct. 12; Cash $10,000
Oct. 15: Inventory $24,500
Oct. 20; Inventory $10,000
Oct. 22; Cash $2,400
Oct. 25: Inventory $625
The necessary general journal entries for the month of October for Sophia Company are as follows:
Oct. 5:
Operating Expenses Expense $12,000
Cash $12,000
Oct. 8:
Inventory $25,000
Accounts Payable $25,000
Oct. 10:
Accounts Payable $470
Cash $470
Oct. 12:
Cash $10,000
Notes Payable $10,000
Oct. 15:
Accounts Payable $24,500 [($25,000 - (2% * $25,000))]
Inventory $24,500
Oct. 20:
Accounts Receivable $16,000
Sales Revenue $16,000
Cost of Goods Sold $10,000
Inventory $10,000
Oct. 22:
Prepaid Insurance $2,400
Cash $2,400
Oct. 25:
Accounts Receivable $1,000
Sales Returns and Allowances $1,000
Inventory $625
Cost of Goods Sold $625
These journal entries record the various transactions and their impact on the accounts. Please note that I have assumed the accounts and their normal balances based on typical accounting practices.
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1.1 1.2 1.3 1.4 Explain in detail, the way in which the work sampling can be used as an approach to explore the work content. The systematic approach of discovering the work content using the work sampling. (20) Define work sampling and give three practical examples (5) Explain systematic approach when contacting two hand process. (10) Define with examples, the standard time, work study, work measurement, work sampling and activity sampling (10) in 140
Work sampling is a technique used to explore the work content by observing and recording the activities performed by workers at various intervals. It provides a systematic approach to understanding the work being done and helps in analyzing and improving productivity.
Work sampling is a technique used in work study and work measurement to explore the work content. It involves observing and recording the activities performed by workers at random intervals, allowing for a representative sample of work activities to be collected. This data is then analyzed to estimate the time spent on different tasks and understand the overall work pattern.
The systematic approach of work sampling begins with defining the objectives and scope of the study. The work area and activities to be observed are identified, and a suitable sampling method is chosen.
Random samples are taken at regular intervals, ensuring that the observations are unbiased and representative of the overall work. The observed data is then recorded and analyzed to determine the proportion of time spent on various tasks, the utilization of resources, and other relevant metrics.
By using work sampling, organizations can gain insights into their work processes and make informed decisions to improve productivity and efficiency.
For example, in a manufacturing plant, work sampling can be used to analyze the time spent on different production tasks, identify potential bottlenecks, and optimize resource allocation.
In a healthcare setting, work sampling can help understand the distribution of work activities among healthcare professionals and ensure optimal staffing levels. In a production facility, work sampling can be used to measure the utilization of machinery and identify opportunities for improvement.
Standard time refers to the predetermined time required to perform a specific task under defined conditions. Work study is a systematic examination of work methods and processes to improve productivity and efficiency.
Work measurement involves determining the time taken to perform tasks using various techniques such as time study or work sampling. Work sampling is a technique used to collect data on work activities at random intervals, while activity sampling is a similar technique used to collect data on specific activities within a broader work context.
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Find the EUAC for a machine whose initial investment is $70,000, the annual expense incurred is $40,000 The annual revenue generated from the machine is $60,000 and the salvage value is $9,000. Use MARR of 20% and the useful life of the machine to be 12 years [ 3 points]
To calculate the Equivalent Uniform Annual Cost (EUAC), we need to consider the annual expenses, annual revenues, salvage value, and the appropriate interest rate (MARR - Minimum Attractive Rate of Return). The formula for EUAC is:
EUAC = (Initial Investment - Salvage Value) * A + Annual Expense - Annual Revenue
Where A is the present worth factor for the useful life of the machine at the given MARR.
To calculate A, we can use the formula:
A = (1 - (1 + MARR)^(-n)) / MARR
where n is the useful life of the machine.
Let's calculate the EUAC:
MARR = 20%
Initial Investment = $70,000
Annual Expense = $40,000
Annual Revenue = $60,000
Salvage Value = $9,000
Useful Life = 12 years
First, calculate A:
A = (1 - (1 + 0.20)^(-12)) / 0.20
A ≈ 6.3523
Next, calculate the EUAC:
EUAC = ($70,000 - $9,000) * 6.3523 + $40,000 - $60,000
EUAC ≈ $267,155.40
Therefore, the EUAC for the machine is approximately $267,155.40.
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i
With contractionary fiscal policy, prices will likely a. Fall b. Stay the same C. Be zero d. Rise
ANSWER: The right answer is A. "Fall".
With contractionary fiscal policy, prices will likely fall. Contractionary fiscal policy is a form of macroeconomic policy that is implemented when an economy is in a state of inflationary overheating, in which prices are rising at an uncontrolled rate. The government implements this policy to decrease the amount of disposable income available in the economy, reducing aggregate demand and lowering prices. The contractionary fiscal policy does so by increasing taxes, cutting public spending, and reducing money supply to increase the cost of borrowing, which slows down spending and reduces aggregate demand, leading to a fall in prices.Thus, prices will likely fall with contractionary fiscal policy.
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Suppose inverse demand is given by P=150−3Q (a) Compute the price elasticity of demand when Q=10. (Hint: Use the slope and the price in addition to the quantity given.) (b) Compute the price elasticity of demand when Q=25. (c) Compute the price elasticity of demand when Q=40.
La elasticidad precio de la demanda es -36 a Q = 10, -9 a Q = 25 y -2.25 a Q = 40. La demanda es relativamente elástica en todos los casos.
Utilizaremos la fórmula para calcular la elasticidad del precio de la demanda en diferentes cantidades:E es igual a (dQ/dP) * (P/Q).(a) Al sustituir los valores en la fórmula cuando Q = 10, descubrimos:E = (-3) * (150 - 3 * 10)/ 10 = -3 * 120/ 10 = -36(b) Cuando Q = 25:E = (-3) * (150 - 3 * 25)/ 25 = -3 * 75/ 25 = -9Cuando Q = 40:E = (3*100 - 3*100)/40 = -3*100/40 = -2.25Por lo tanto, la elasticidad de precios de la demanda es -36 a Q = 10, -9 a Q = 25 y -2.25 a Q = 40. Como la magnitud de la elasticidad es mayor que 1 en todos los casos, estos valores indican que la demanda es relativamente elastica.
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Indifference curves are convex to the origin because of: A. transitivity of consumer preferences. B. the assumption of a diminishing marginal rate of substitution. C. the assumption that more is preferred to less. D. the assumption of completeness. E. none of the above.
Expert Answer
Indifference curves are convex to the origin due to the assumption of a diminishing marginal rate of substitution. Hence, option B is correct.
The assumption of a diminishing marginal rate of substitution is the reason why indifference curves are convex to the origin. The diminishing marginal rate of substitution implies that as a consumer increases the quantity of one good, they are willing to give up less and less of the other good to maintain the same level of satisfaction. This leads to a curved shape for indifference curves.
If the marginal rate of substitution (MRS) were constant, the indifference curves would be straight lines. However, the assumption of diminishing marginal rate of substitution reflects the idea that consumers experience diminishing satisfaction as they consume more of a particular good.
As a result, they require a higher compensation in terms of the other good to be willing to give up an additional unit of the first good. This leads to a convex shape for indifference curves, where the slope becomes flatter as we move along the curve away from the origin.
Therefore, the assumption of a diminishing marginal rate of substitution is the reason why indifference curves are convex to the origin.
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For a given project, the initial investment is $280,000, the required return for assets of this risk is 10%, and the average book value = $78,000.
The cash flows (CF) and net income (NI) in $ for it for 4 years is given below:
Year 1: CF = 77,000; NI = 18,500
Year 2: CF = 87,000; NI = 20,800
Year 3: CF = 107,000; NI = 22,000
Year 4: CF = 132,000; NI = 21,000
A. Calculate the payback period of the above project if the project is given a pre-set limit of 3 years to recover the initial investment. Should the project be accepted or rejected based on the payback period value? B. The required average accounting return is 25%. Calculate the accounting rate of return (ARR) of the above project. Should the project be accepted or rejected based on the ARR value? Explain. C. Calculate the net present value (NPV) of the above project. Should the project be accepted or rejected based on the NPV value?
A. The payback period is 2.7 years, so the project should be accepted based on the payback period criterion. B. The ARR is 10.98%, below the required 25%, so the project should be rejected based on the ARR criterion. C. The NPV is $40,257.62, so the project should be accepted based on the NPV criterion.
A. The payback period is calculated by determining the time it takes for the cumulative cash flows to equal or exceed the initial investment. The cumulative cash flows are as follows: Year 1: $77,000, Year 2: $164,000 ($77,000 + $87,000), Year 3: $271,000 ($164,000 + $107,000). The payback period is 2.7 years ($271,000 / $100,000). Since it is less than the pre-set limit of 3 years, the project is accepted.
B. The accounting rate of return (ARR) is calculated by dividing the average net income by the average book value and multiplying by 100%. The average net income is ($18,500 + $20,800 + $22,000 + $21,000) / 4 = $20,575, and the average book value is $78,000. The ARR is 10.98% ($20,575 / $78,000 * 100%). Since it is below the required rate of 25%, the project is rejected based on the ARR criterion.
C. The net present value (NPV) is calculated by discounting the cash flows using the required return. The present value factors for each year are: Year 1: 0.9091, Year 2: 0.8264, Year 3: 0.7513, Year 4: 0.6830. The discounted cash flows are: Year 1: $70,000 ($77,000 * 0.9091), Year 2: $71,862 ($87,000 * 0.8264), Year 3: $80,329 ($107,000 * 0.7513), Year 4: $90,156 ($132,000 * 0.6830). The NPV is $40,257.62 ($70,000 + $71,862 + $80,329 + $90,156 - $280,000). Since the NPV is positive, the project is accepted based on the NPV criterion.
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Define the following terms and give examples of each:
Cost
Costing The main purpose of cost accounting is to provide management with information about the costs of products or services or department. List any four 4 decisions management can make using the above information. Naledi Motors manufactures and assemblies Mercedes benz cars. Indicate for each of the following items whether it is a cost object, a direct cost, or an indirect cost:
A Mercedes -AMG manufactured in in March
The aluminum and high-strength steel used to make a Mercedes Benz SUVs
The wages of the employees assembling the cars
Car Shampoo used to clean the cars.
Phone bill to call customers and suppliers of the company.
High-quality recycled plastic to make bumpers.
Cost refers to the monetary value or expenditure incurred in the production or acquisition of goods or services.
Cost:Cost refers to the monetary value or expenditure incurred in the production or acquisition of goods or services. It includes various expenses such as raw materials, labor, utilities, and overhead costs. Examples of costs include the cost of purchasing materials, the cost of labor, and the cost of renting a facility.
Costing:Costing is the process of determining the cost of producing a product or providing a service. It involves analyzing and allocating costs to various components of production, such as materials, labor, and overhead, in order to calculate the total cost of a product or service. Costing helps in determining the profitability of products, making pricing decisions, and evaluating performance. Examples of costing methods include job costing, process costing, and activity-based costing.
Management decisions based on cost information:
1. Pricing decisions: Cost information helps management determine the selling price of a product or service by considering the cost of production, desired profit margin, and market conditions.
2. Make or buy decisions: Management can use cost information to evaluate whether it is more cost-effective to produce a component or purchase it from an external supplier.
3. Product mix decisions: Cost information helps management decide which products or services to focus on based on their profitability and contribution to overall costs and revenues.
4. Cost control decisions: Cost information allows management to identify areas of excessive costs and take necessary measures to control and reduce costs, improving efficiency and profitability.
In the context of Naledi Motors:
1. A Mercedes-AMG manufactured in March:
Cost object: A Mercedes-AMG manufactured in March.Direct cost: The cost of raw materials, labor, and other expenses directly associated with manufacturing that specific Mercedes-AMG.Indirect cost: Overhead costs such as factory rent, utilities, and depreciation, which are indirectly allocated to the Mercedes-AMG.2. The aluminum and high-strength steel used to make Mercedes-Benz SUVs:
Cost object: Mercedes-Benz SUVs.Direct cost: The cost of aluminum and high-strength steel specifically used in the production of Mercedes-Benz SUVs.Indirect cost: Overhead costs associated with the manufacturing process of Mercedes-Benz SUVs.3. The wages of the employees assembling the cars:
Cost object: Employees assembling the cars.Direct cost: The wages of the employees directly involved in the assembly process.Indirect cost: Indirect labor costs such as supervisor salaries, training expenses, and employee benefits that are indirectly related to the assembly process.4. Car shampoo used to clean the cars:
Cost object: Car shampoo used to clean the cars.Direct cost: The cost of purchasing the car shampoo.Indirect cost: Overhead costs related to maintaining the cleaning facility and equipment.5. Phone bill to call customers and suppliers of the company:
Cost object: Phone bill.Direct cost: The cost of phone calls specifically made to customers and suppliers.Indirect cost: Indirect expenses such as line rental, internet charges, and other telecommunication overhead.6. High-quality recycled plastic to make bumpers:
Cost object: Bumpers made from high-quality recycled plastic.Direct cost: The cost of purchasing high-quality recycled plastic.Indirect cost: Overhead costs associated with the production process of bumpers, such as machinery maintenance and depreciation.Learn more about cost pricing :
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