The pattern of revenue, units sold, average selling price, and number of invoices suggests a potential relationship between these variables, where changes in one variable may impact the others.
The revenue is determined by the product of the number of units sold and the average selling price. Therefore, any changes in either of these variables can directly affect the revenue. If the units sold increase while the average selling price remains constant, the revenue will likely increase.
Conversely, if the average selling price increases while the units sold remain constant, the revenue will also likely increase.Additionally, the number of invoices could provide insight into the distribution and frequency of sales.
If there is a high number of invoices, it suggests that sales are being made to a larger number of customers or that customers are making frequent purchases. This information can be useful for analyzing customer behavior and identifying potential market segments.
Furthermore, examining the relationship between the average selling price and the number of invoices can provide insights into market demand and price elasticity. If there is a positive correlation between these two variables, it suggests that customers are willing to purchase products at higher prices, indicating a potentially higher demand for the product.
On the other hand, if there is a negative correlation or no significant relationship, it may indicate that customers are more price-sensitive and may be more responsive to changes in price.
Overall, analyzing the pattern of revenue, units sold, average selling price, and number of invoices can help identify trends, understand customer behavior, and make informed business decisions regarding pricing, marketing strategies, and customer segmentation.
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The pattern of revenue, units sold, average selling price, and number of invoices can provide insights into the overall performance and dynamics of a business.
The pattern of revenue, units sold, average selling price, and number of invoices suggests important information about the company's sales and financial performance. By analyzing these factors, we can gain insights into the market demand for the company's products or services, the effectiveness of its pricing strategy, and its overall sales efficiency.
For example, if the revenue is consistently increasing over time, it indicates that the company is generating higher sales and potentially expanding its customer base. On the other hand, if the units sold are decreasing while the average selling price is increasing, it might suggest that the company is focusing on selling higher-priced products to a niche market, which could impact its market share but potentially increase profitability.
Additionally, observing the number of invoices can provide insights into the company's transaction volume and customer base. If the number of invoices is increasing, it could indicate a growing customer base or an increase in repeat purchases. Conversely, a decline in the number of invoices might suggest challenges in attracting and retaining customers.
Overall, analyzing the pattern of revenue, units sold, average selling price, and number of invoices helps in understanding the company's sales performance, pricing strategy, market dynamics, and customer behavior, allowing for informed decision-making and potential adjustments to improve business outcomes.
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BNY plc, which pays corporation tax at 25%, has the following capital structure: Ordinary shares: 900,000 ordinary shares of nominal value 25p per share. The market value of the shares is 49p per share. A dividend of 7p per share has just been paid, and dividends are expected to grow by 7% per year for the foreseeable future. Preference shares: 350,000 preference shares of nominal value 60p per share. The market value of the shares is 32p per share and the annual net dividend of 7.5% has just been paid. Debentures: GHC100,000 of 10-year redeemable debentures with a market price of GHC92 per GHC100 block. These debentures have a coupon rate of 10% and the annual interest payment has just been made. Calculate the weighted average after-tax cost of capital of BNY plc. Q5 (b) Preferred stock is source of finance also called a hybrid security. Justify the usage of preferred stock on the capital structure of companies such as Standard Chartered Bank (GH) Ltd.
Weighted Average Cost of Capital (WACC):Weighted Average Cost of Capital (WACC) is a measure of a company's cost of capital.
Then, the after-tax cost of each financial component is divided by the company's total market value to obtain the weighted average cost of capital (WACC).
The formula for calculating WACC is given by, WACC = (E/ V × Re) + [(D/ V × Rd) × (1 − Tc)] where, E = Market value of the company's equity, D = Market value of the company's debt, V = Total value of capital (equity plus debt), Re = Cost of equity, Rd = Cost of debt, and Tc = Corporate tax rate. Calculation of WACC of BNY plc: Firstly, we have to calculate the market value of the equity, which is as follows: Market value of ordinary shares = Number of ordinary shares × Market value per share = 900,000 × £0.49 = £441,000.Market value of preference shares = Number of preference shares × Market value per share = 350,000 × £0.32 = £112,000. Therefore, the market value of equity (E) = £441,000 + £112,000 = £553,000. The market value of debt (D) is GHC100,000 × GHC92 = £92,000.
Now, we will calculate the cost of equity (Re) as follows: Cost of equity = (Dividend per share ÷ Market value per share) + Dividend growth rate = (£0.07 ÷ £0.49) + 7% = 21.4%Next, we will calculate the after-tax cost of debt (Rd) as follows:After-tax cost of debt = (Coupon rate × (1 − Tax rate)) + (Market discount ÷ Years to maturity) = (10% × (1 − 25%)) + (8% ÷ 10) = 8.5%Therefore, the WACC of BNY plc is: WACC = [(E/ V × Re) + (D/ V × Rd)] = [(£553,000/ £645,000 × 21.4%) + (£92,000/ £645,000 × 8.5%)] = 17.2%
It usually pays a fixed dividend and is senior to common stock but subordinate to debt in the event of bankruptcy.
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Net profit is the difference between total sales revenue and
total variable cost.
True
False
The following statement: "Net profit is the difference between total sales revenue and total variable cost" is True.
Net profit:
Net profit is the total amount of money a company has left over after all of its expenses have been paid. It is calculated by subtracting total costs from total revenues. It is also known as the bottom line or the profit after taxes.There are three types of costs that companies incur: fixed costs, variable costs, and mixed costs.
Fixed costs are those that do not change as the level of production changes. Rent, property taxes, salaries, and insurance are examples of fixed costs. Variable costs, on the other hand, fluctuate based on the level of production. They are dependent on the volume of goods or services provided. Wages, direct materials, and shipping are all examples of variable costs. Mixed costs, as the name suggests, are a combination of fixed and variable costs.
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Blossom Company issues $1,000,000, 10-year, 10% bonds at 95, with interest payable each January 1. Prepare the journal entry to record the sale of these bonds on January 1, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 Assuming instead that the above bonds sold for 108, prepare the journal entry to record the sale of these bonds on January 1, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1
The Bonds Payable account is credited for the face value of the bonds ($1,000,000) in both scenarios.
Here are the journal entries to record the sale of the bonds under two different scenarios:
1) Bonds sold at 95:
Date Account Titles and Explanation Debit Credit
Jan. 1 Cash $950,000
Discount on Bonds Payable $50,000
Bonds Payable $1,000,000
2) Bonds sold at 108:
Date Account Titles and Explanation Debit Credit
Jan. 1 Cash $1,080,000
Premium on Bonds Payable $80,000
Bonds Payable $1,000,000
In both cases, the Cash account is debited for the amount received from the bond sale. The Discount on Bonds Payable account is credited when the bonds are sold below their face value (95), representing the discount. Alternatively, the Premium on Bonds Payable account is credited when the bonds are sold above their face value (108), representing the premium. The Bonds Payable account is credited for the face value of the bonds ($1,000,000) in both scenarios.
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Economic sector :fast food E. Propose any THREE (3) government intervention to create a good economy condition in Malaysia.
Three government interventions to create a good economic condition in the fast food sector in Malaysia are: implementing supportive policies and regulations, promoting skill development and training programs, and providing financial assistance and incentives.
The Malaysian government can create a conducive economic environment for the fast food sector by implementing supportive policies and regulations. This can include ensuring food safety and hygiene standards, streamlining licensing procedures, and promoting fair competition. By establishing clear guidelines and regulations, the government can foster a level playing field and build consumer trust in the industry.
Promoting skill development and training programs is another effective intervention. The government can collaborate with industry stakeholders to provide specialized training and development programs for fast food workers. This can enhance their skills, knowledge, and productivity, leading to improved service quality and customer satisfaction. Additionally, investing in research and development can encourage innovation and the adoption of new technologies, boosting the competitiveness of the sector.
Furthermore, providing financial assistance and incentives can support the growth of the fast food industry. The government can offer tax incentives or grants to encourage investment in the sector, especially for small and medium-sized enterprises (SMEs). Financial assistance programs, such as low-interest loans or subsidies, can help entrepreneurs and existing businesses to expand, upgrade their facilities, or implement sustainable practices. These initiatives can stimulate job creation, enhance productivity, and contribute to overall economic development in the fast food sector.
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Salmon / Fish Manufacturing Bukes is a relatively newer manufacturing operation. Located in Alaska. Details: • Your space is 3000 square feet, with 2 shipping / receiving docks Office Staff 2 employees and 8 Operations employees. • Process • When boats arrive - fish must be cleaned and frozen within 4 days • Process : boat arrives, dump fish, sort fish: salmon and other • All fish are cleaned and head removed, goes through fish frozen or by products • Operations is all year round but in the fall operations doubles. Resulting in a temporary increase until Nov • Normal fish production rate is 500 kilograms per day • Fish by products 200 kilograms per day • Plant works 5 days a week • Demand is 400 kgs per week for fish product • Demand for fish by products is 90 kgs per week • Dec month - fish product- goes up 50% more per week • Shelf life 3 years if in the freezer
Salmon / Fish Manufacturing Bukes is a relatively newer manufacturing operation that is located in Alaska. Given below are the details of this manufacturing operation:
Space: The manufacturing space of Salmon / Fish Manufacturing Bukes is 3000 square feet, which includes 2 shipping / receiving docks.
Personnel: There are 2 office staff members and 8 operations employees in the manufacturing operation.
Process: The process starts with the arrival of boats, following which the fish must be cleaned and frozen within 4 days. Upon arrival, the fish is dumped, and sorting of the fish takes place.
There are two categories: salmon and other fish. All the fish are cleaned and the head is removed. They are then sent for freezing or turned into by-products.
Operations: The operations are all year round, but in the fall, operations double, resulting in a temporary increase until November.
Production Rate: The normal fish production rate is 500 kilograms per day, whereas the fish by-products rate is 200 kilograms per day.
Working days: The plant works for 5 days a week.
Demand: The demand for fish products is 400 kgs per week, whereas the demand for fish by-products is 90 kgs per week.
December Month: During the month of December, the demand for fish products goes up by 50% per week.
Shelf life: The shelf life of the fish products is 3 years if kept in the freezer.
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what is the effect of an import tariff charged on a particular good
The effect of an import tariff charged on a particular good is to increase the cost of that good in the importing country. This is because the tariff adds to the price of the good, making it more expensive for consumers to purchase. In addition, the increased cost of the imported good may lead to a decrease in demand for it, as consumers seek out cheaper alternatives that are domestically produced.
An import tariff is a tax on goods that are imported into a country from other countries. The purpose of an import tariff is to protect domestic industries from competition from foreign producers by making it more expensive to import goods. Import tariffs can also be used as a source of revenue for governments. An import tariff charged on a particular good can have several effects. First, it can increase the cost of that good in the importing country. This is because the tariff adds to the price of the good, making it more expensive for consumers to purchase.
In addition, the increased cost of the imported good may lead to a decrease in demand for it, as consumers seek out cheaper alternatives that are domestically produced. This can benefit domestic producers who compete with the imported good. Second, an import tariff can reduce the quantity of the imported good that is consumed in the importing country. This is because the higher price of the imported good may lead to a decrease in demand for it, as mentioned above. The reduction in the quantity of the imported good that is consumed can be beneficial to domestic producers who compete with the imported good. However, it can also be detrimental to consumers who are forced to pay a higher price for the imported good or who may not be able to afford it at all. Third, an import tariff can lead to retaliation by the exporting country. This is because the exporting country may see the import tariff as unfair or protectionist. In response, it may impose its own tariffs on goods exported from the importing country. This can lead to a trade war, where both countries impose tariffs on each other's goods, making trade between them more difficult and costly. Finally, an import tariff can have distributional effects within the importing country. This is because some groups may benefit from the tariff, while others may be harmed by it. For example, domestic producers who compete with the imported good may benefit from the tariff, while consumers who purchase the imported good may be harmed by it. Similarly, some regions or industries may benefit from the tariff, while others may be harmed by it. These distributional effects are an important consideration when deciding whether to impose an import tariff. In conclusion, an import tariff charged on a particular good can have several effects, both positive and negative. It can increase the cost of the imported good, reduce the quantity of it that is consumed, lead to retaliation by the exporting country, and have distributional effects within the importing country. When considering whether to impose an import tariff, policymakers must weigh these effects against the benefits of protecting domestic industries and generating revenue for the government. They must also consider the potential costs of retaliation by the exporting country and the potential negative effects on consumers and other groups within the importing country.
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John Paul is employed by China Electricals and Japan Auto Parts and Garnishing. His primary employment is a sales representative in China Electrical while his secondary employment is a part time consultant in Japan Auto Parts and Garnishing. John Paul receives $350,000 salary from his primary source of employment, while he receives $100,000 from his secondary source of employment. He donated $56,000 to Fiji Cancer Society, $11,000 to University of Fiji and $18,000 to Project Heaven Trust. His primary employer contributes 14% to his FNPF account. China Electrical deducted a tax of $63,600 while Japan Auto Parts and Garnishing deducted $5,000 at source. Additional Information: • John Paul also received interest on 31st December, 2022 on his fixed deposit account at HFC Bank. HFC Bank pays 5% interest per annum on fixed deposit accounts however the bank has not deducted any tax on the amount of interest paid to John Paul. • John Paul has invested $200,000 in his fixed deposit account at HFC bank on 1st June, 2022.
REQUIRED: Compute the Income Tax payable or refundable for the income year 2022
Answer: The Income Tax payable or refundable for the income year 2022 is -$40,400.
In the computation of Income Tax payable for the income year 2022, first, we should calculate the annual income by adding all the sources of income, which are:1. John Paul's primary source of employment, China Electricals - $350,0002. John Paul's secondary source of employment, Japan Auto Parts and Garnishing - $100,0003. Interest received on fixed deposit account at
HFC Bank - ($200,000 x 5%) = $10,000
Therefore, John Paul's total income for the income year 2022 is:
$350,000 + $100,000 + $10,000 = $460,000
Next, we can calculate the FNPF contribution which is contributed only by John Paul's primary employer, China Electricals. It is 14% of John Paul's primary employment income, which is:
$350,000 x 14% = $49,000
The taxable income can now be computed by subtracting the FNPF contribution from the total income. This gives:
$460,000 - $49,000 = $411,000
The tax rate applicable for this amount is 20% for taxable income exceeding $270,000 but not exceeding $540,000. Hence, we have to apply this tax rate to the amount exceeding $270,000. Therefore, the amount on which tax is calculated is:
$411,000 - $270,000 = $141,000
The tax payable on this amount is 20% of $141,000, which is: $28,200 We also need to consider the tax already deducted by John Paul's employers. China Electricals has deducted a tax of $63,600 while Japan Auto Parts and Garnishing deducted $5,000 at source. Hence, the total tax deducted at source is:
$63,600 + $5,000 = $68,600
The final Income Tax payable or refundable for the income year 2022 is:
$28,200 - $68,600 = -$40,400
This means that John Paul has paid more tax than what is due, and hence he is eligible for a tax refund of $40,400.
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The U.C.C. applies to contracts that involve the sale of ________________________.
A. real property
B. services
C. goods
D. (All of the above)
E. A and B but not C
In an executed contract both of the parties have yet to performed their contractual obligations.
True
False
The U.C.C. applies to contracts that involve the sale of goods.
The U.C.C. (Uniform Commercial Code) is a set of laws that governs commercial transactions in the United States. It specifically applies to contracts for the sale of goods. Goods are generally defined as tangible, movable items, such as products, equipment, or commodities. Therefore, option C is the correct answer.
In regards to the statement about an executed contract, the statement is false. An executed contract refers to a contract in which both parties have fulfilled their contractual obligations. In an executed contract, all terms and conditions have been performed, and the parties are no longer bound by the contract.
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PVA stands for price value analysis product value analysis product value amplifier none of the above 3 Question 7 (1 point) consumer markets has elastic demand ? - 6 -- True False 3 1 Question 12 (2 points) Idea screening is Inviting broad communities of people such as customers, employees, independent scientists and researchers, and even the public at large into the new product innovation process 6 3 a True False 1 12 Question 13 (1 point) Decline stage - The product life-cycle stage in which sales growth slows or levels off ? 4. 15 True False
PVA stands for "Product Value Amplifier". Question 7: False Question 12: False Question 13: True
Product Value Amplifier (PVA) refers to the increase in the actual or perceived value of a product by adding or improving its features, attributes, or benefits. This process is achieved through product innovation, which involves ideation, design, development, testing, and launching of new products, or enhancing the existing ones. False, Consumer markets have an inelastic demand.
This means that the demand for the products in these markets is relatively insensitive to price changes. True, Idea screening is the process of selecting and evaluating new product ideas to identify the most promising ones for further development. False, The Decline stage is the product life-cycle stage in which sales decline, either gradually or rapidly, as the product becomes obsolete or replaced by newer, more innovative products.
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what is the division's residual income if the asset is leased? (enter your answers in dollars, not in millions.)
Residual income is the amount of money an individual or company has left over after paying all of their expenses. This amount can be determined in a variety of ways, but is typically calculated as revenue minus expenses.
An asset is something of value that a company or individual owns and is used to generate income. When an asset is leased, the owner of the asset agrees to rent it out to another party in exchange for regular payments. The division's residual income if the asset is leased is equal to the amount of money the company earns from leasing the asset minus any expenses associated with leasing it. In order to calculate this amount, you will need to subtract the lease expenses from the total amount of lease revenue. The result will be the residual income for the division. Make sure to express your answer in dollars.
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CASE STUDY ON HYDRO ONE, CANADA
Explain how Hydro One setup its risk controls to mitigate the KRIs
Hydro One has set up risk controls such as a robust risk assessment framework and engagement to mitigate KRIs. These measures enable the company to identify, assess, and manage risks effectively.
Hydro One, a leading electricity transmission and distribution company in Canada, has implemented various risk controls to mitigate Key Risk Indicators (KRIs) and ensure the safety and reliability of its operations. One of the primary risk controls implemented by Hydro One is a robust risk assessment and management framework. This framework includes identifying and assessing potential risks, both internal and external, that may impact the company's operations. Hydro One also focuses on implementing strong operational controls. This includes regular inspections and maintenance of infrastructure. By implementing stringent operational controls, Hydro One aims to minimize the occurrence and impact of operational risks. Furthermore, Hydro One emphasizes the importance of employee training and engagement. The company provides comprehensive training programs to ensure that employees are equipped with the necessary knowledge and skills to identify and manage risks effectively. Regular communication and engagement with employees also help in maintaining a strong risk culture throughout the organization.
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At Odalisse's company, many employees quit during the pandemic. The business had trouble finding and hiring replacements. Consequently, Odalisse had to pick up additional work, that used to be done by other members of her department. It was understood that this would be at the same pay and position, since it was viewed as temporary until people were hired. Odalisse experienced Job simplification Job enrichment Job rotation Job enlargement
:Odalisse experienced Job enlargement.
Job enlargement involves expanding the scope of a job by adding additional tasks and responsibilities at the same pay and position. In this case, due to employees quitting during the pandemic and the company's struggle to find replacements, Odalisse had to take on additional work that was previously done by other members of her department. This temporary increase in workload without a change in position or compensation aligns with the concept of job enlargement, as Odalisse's job was expanded to include additional tasks to address the staffing shortage.
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Price in dollars 25 H K: 20 15 MSB 10 5 0 0 1 2 3 4 5 6 7 8 9 10 11 Smoke detectors (millions per year) Refer the the graph above to answer the following quesitons: a. Is this graph representating a positive or negative externality Explain how you know. (1 points) b. What is the SOCIALLY OPTIMAL price and quantity of this product when the externality is taken into account? (1 points) c. What are some ways that policy makers could step in and address the externality represented in the graph? MC-MSC G MB
a. The graph represents a negative externality.
The reason is, the marginal social benefit (MSB) is greater than the marginal social cost (MSC) at the market equilibrium price of $10. However, the quantity demanded is higher than the socially optimal quantity (Q*) at which MSB = MSC. As a result, there is an overallocation of resources towards the production of smoke detectors. Hence, it represents a negative externality.
b. The socially optimal price and quantity of this product when the externality is taken into account is at $15 and 5 million units respectively. This is because, at this point, MSB = MSC and there is no overallocation or under allocation of resources towards the production of smoke detectors.
c. Policymakers could step in and address the externality represented in the graph in a number of ways. Some of these ways include:
a) Imposing a tax on smoke detectors that would increase their price to the socially optimal level of $15. This would lead to a decrease in the quantity demanded of smoke detectors to the socially optimal level of 5 million units.
b) Subsidizing the production of alternatives to smoke detectors that would reduce the negative externality associated with them.
c) Imposing a quota on the production of smoke detectors to reduce the quantity supplied to the socially optimal level of 5 million units.
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The Kitchener Rangers Hockey Club: Skating into the Future
Perform a PEST and SWOT analysis of the Kitchener Rangers.
What strategic issues are facing the Kitchener Rangers?
Develop three strategic goals for the Kitchener Rangers. Ensure your goals are SMART.
Which metrics (KPIs) should the Kitchener Rangers use to measure its performance? Remember to include targets and timeframes.
The PEST analysis of the Kitchener Rangers Hockey Club is:Political: government regulations that can affect the team's financial and economic stability.
Economic: the economic and financial viability of the team.Social: the interest of fans and the community in the team.
Technological: the use of technology in delivering services and reaching out to a larger audience. The SWOT analysis of the Kitchener Rangers Hockey Club is:Strengths: good reputation, experienced and dedicated management team, strong fan base, and a great history. Weaknesses: not well-funded, low exposure, and dependence on a few sponsors.Opportunities: expanding into new markets, seeking new sponsorships, and engaging with fans in new ways.Threats: competition from other teams and a shift in fan preferences. Strategic issues facing the Kitchener Rangers include
a) Economic viability. b) Competing with other teams. c) The interest of fans and the community. Strategic goals for the Kitchener Rangers are:
1. To increase its revenue by 15% by expanding the fan base. This goal is Specific, Measurable, Attainable, Relevant, and Timely (SMART).
2. To compete in the league by upgrading the team's facilities and hiring new coaches. This goal is SMART.3. To build a stronger relationship with the community by organizing charity events and outreach programs. This goal is SMART.Key Performance Indicators (KPIs) that the Kitchener Rangers should use to measure their performance include a) Revenue growth: The team should target a growth rate of at least 15% each year. b) Fan engagement: The team should target a higher level of fan engagement through social media and other channels. c) Win/Loss record: The team should target a higher win rate, which can help to increase fan engagement and revenue.
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What Are The Three Different Ways To Break Down The Percentages In A Contingency Table?
What are the three different ways to break down the percentages in a contingency table?
The three different ways to break down the percentages in a contingency table are:
Row percentages: Row percentages calculate the percentage distribution within each row of the contingency table. It shows the proportion of each category in a row relative to the total count in that row. This breakdown helps in understanding the distribution of one variable across the levels of another variable.
Column percentages: Column percentages calculate the percentage distribution within each column of the contingency table. It shows the proportion of each category in a column relative to the total count in that column. This breakdown helps in understanding the distribution of one variable within each level of another variable.
Total percentages: Total percentages calculate the percentage distribution across the entire contingency table, considering all rows and columns. It shows the proportion of each category relative to the total count in the contingency table. This breakdown helps in understanding the overall distribution of the two variables together.
These three breakdowns provide insights into the relationship between two categorical variables in a contingency table, highlighting the distribution patterns and associations between the variables.
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In 2021, the Woodland Republic Bureau of Statisticspublication indicated that the Consumer Price Index (CPI) of the country increased to 109.2 in 2021 from 106.5 in 2020. Calculate WoodlandRepublic’s inflation rate in 2021.
The inflation rate in the Woodland Republic in 2021 can be calculated using the formula: [(CPI in 2021 - CPI in 2020) / CPI in 2020] x 100.
[(109.2 - 106.5) / 106.5] x 100 = 2.53%.
Using the given information, the inflation rate in the Woodland Republic in 2021 can be calculated as follows: [(109.2 - 106.5) / 106.5] x 100 = 2.53%.
The inflation rate represents the percentage increase in the average price level of goods and services in an economy over a specific period, in this case, from 2020 to 2021. A positive inflation rate of 2.53% indicates a general increase in prices, suggesting that consumers would need to spend more to purchase the same basket of goods and services compared to the previous year. The calculation helps measure the extent of price changes and assess the impact of inflation on the economy and consumers' purchasing power.
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What price will be used for this day for the mark-to-market per pound on December cotton? Contract May, Coffee, 37,500 lbs., cents per lb Dec, Cotton, 50,000 lbs., cents per lb High 138.00 80.59 Low 135.50 78.85 Close 137.15 80.63 Chg 2.20 0.27 $78.85 $80.63 $0.8063 $80.59 $0.7885
Expert Answer
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Answer:- Option
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The problem ha
The price used for the mark-to-market per pound on December cotton for this day would be B. $80.63.
The mark-to-market price is the current market price used to value a futures contract. In this case, we are looking at the December cotton contract. The information provided includes the high, low, close, and change in price for the day. The closing price for the December cotton contract is given as $80.63. Since the mark-to-market price is typically based on the closing price, we would use the closing price of $80.63 for the mark-to-market per pound on December cotton for this day. It's important to note that the mark-to-market price can fluctuate throughout the trading day, and the closing price is typically used as a reference point for valuation. The closing price reflects the final traded price at the end of the trading session and is considered the most reliable indicator of market value at that point in time.
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the complete question is: What price will be used for this day for the mark-to-market per pound on December cotton?
Contract High Low Close Chg
May, Coffee, 37,500
lbs., cents per lb 138.00 135.50 137.15 2.20
Dec, Cotton, 50,000 lbs.,
cents per lb 80.5 78.85 80.63 0.27
Burchells Ltd owns a machine that originally cost $36 000. It has been depreciated using the straight-line method for three years, giving an accumulated depreciation of $15 000 (the salvage value was estimated at $6000 and the useful life at six years). At the beginning of the current financial year its carrying value was therefore $21 000. It has been decided by the directors to revalue it to fair value, which has been assessed to be $38 000. The salvage value and useful life are considered to be unchanged. What are the appropriate entries to record the revaluation using the net-amount method and the depreciation expense for the current year (rounded to the nearest dollar)?
To record the revaluation of the machine using the net-amount method, the following journal entry should be made:
Revaluation:
Machine (Asset) $17,000
Accumulated Depreciation $15,000
Revaluation Surplus (Equity) $2,000
Explanation:
Machine (Asset) is debited to increase the carrying value of the machine to its revalued amount of $38,000.
Accumulated Depreciation is credited to remove the previous accumulated depreciation of $15,000.
Revaluation Surplus (Equity) is credited with the difference between the revalued amount and the carrying value, which is $2,000.
To record the depreciation expense for the current year, the following journal entry should be made:
Depreciation Expense:
Depreciation Expense (Expense) $3,500
Accumulated Depreciation $3,500
Explanation:
Depreciation Expense (Expense) is debited to record the expense incurred during the current year, which is calculated as the difference between the carrying value at the beginning of the year ($21,000) and the revalued amount ($38,000) divided by the remaining useful life (3 years).
Accumulated Depreciation is credited to increase the accumulated depreciation by the amount of depreciation expense recorded.
Please note that the dollar amounts in the entries are rounded figures and may not reflect the exact depreciation calculation.
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4. A local dentist read an article published by the American Dental Association estimating that the elasticity of demand for the representative dentist's services is -3. The marginal cost of the service is $50. How much should the dentist mark up her price over marginal cost? State the pricing formula, state the markup factor, and compute the price using the pricing formula.
The dentist should mark up her price by $25 over the marginal cost of $50. The pricing formula, the markup factor, and the computed price are shown above.
The price markup over marginal cost for a dentist who read an article published by the American Dental Association is given by the pricing formula:
P = MC/1 – (1/|ED|) where:
P = Price MC = Marginal Cost |ED| = Elasticity of Demand
Formula to calculate markup factor:
Markup Factor = 1/(1 – (1/|ED|))
To find out the price that the dentist should charge, we will first calculate the Markup Factor. The elasticity of demand is -3, so:
|ED| = 3 Markup Factor = 1/(1 – (1/3)) = 1.5
So, the markup factor is 1.5.
Now, we can calculate the price using the pricing formula:
P = MC/1 – (1/|ED|)
P = $50/1 – (1/3) = $50/(2/3)
P = $50 × (3/2)
P = $75
Thus, the dentist should mark up her price by $25 over the marginal cost of $50. The pricing formula, the markup factor, and the computed price are shown above.
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QUESTION 33 Ronaldo rents a house to April. Which of the following is not one of April's basic rights as a tenant? 0 Right of habitability O Right of possession O Right to make improvements o Right of quiet enjoyment
Ronaldo rents a house to April. Which of the following is not one of April's basic rights as a tenant?The Right of making improvements is not one of April's basic rights as a tenant. A tenant has certain rights that should be respected by the landlord as well.
The landlord cannot merely change the terms and conditions of the lease agreement as they want. The following are a few basic rights of tenants, which should not be violated by the landlord:Right of possession: A tenant has the right to occupy the property as long as the rent is paid. This right includes the right to exclude others and the right to invite guests.Right of habitability: A tenant has the right to live in a property that is in livable conditions. A property should have electricity, running water, and be free from vermin and insects. If there is any maintenance work required, then the landlord should undertake it.Right of quiet enjoyment: A tenant has the right to a quiet and peaceful environment. The landlord is not allowed to interrupt the tenant's quiet enjoyment of the property.Right of making improvements: This is not a right of a tenant. Making changes or improvements to a property requires permission from the landlord. The landlord has the right to approve or disapprove any changes that a tenant wants to make. This is because any modification to the property would also affect the landlord’s investment and, hence, permission is necessary.
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The utility function and the prices are the following: U = 68 x1 + 17 x2 P1=4, P2=63 and 1=10329 What is the optimal amount of x1?
QUESTION 25 The utility function and the prices are the following: U =min{ 49 x1, 64 x2} P1=40, P2=58 and 1=1618 What is the amount of maximized utility?
QUESTION 26 The utility function and the prices are the following: U = 11 x1 +43 x2 P1=56, P2=13 and 1=1629 What is the optimal amount of x1?
The marginal utility of x1 is 11 and the marginal utility of x2 is 43.MUx1 / P1 = MUx2 / P211 / 56 = 43 / 13Solving for x1;x1 = (43 / 13) × (56 / 11) × I = 1691.47. The optimal amount of x1 is approximately 1691 units.
Utility function is a representation of preferences that provides a way of ranking outcomes and then selecting among them by determining , the best one. A Utility function is an entity that reflects the happiness or pleasure obtained from the consumption of a good or service. It is the satisfaction that consumers derive from consuming a product or service. The optimal amount of x1 refers to the quantity of x1 that should be purchased to maximize utility.
Given the following utility function and prices:U = 68 x1 + 17 x2P1 = 4, P2 = 63, and I = 10329.The formula for calculating optimal amount x1 is given as: MUx1 / P1 = MUx2 / P2, where MU is marginal utilityThe marginal utility of x1 is 68 and the marginal utility of x2 is 17.MUx1 / P1 = MUx2 / P268 / 4 = 17 / 63Solving for x1;x1 = (17 / 63) × (4 / 68) × 10329 = 642.79.The optimal amount of x1 is approximately 643 units.
Now, considering the given utility function and prices,U = min{ 49 x1, 64 x2}, P1 = 40, P2 = 58, and I = 1618To maximize utility, we can use the concept of "Utility Maximization Rule" which states that a consumer should consume goods or services up to the point where the marginal utility per dollar is the same for each product (MUx1 / P1 = MUx2 / P2).
First, we will calculate the marginal utilities:MUx1 = 49; MUx2 = 64Plugging the values in the formula;MUx1 / P1 = MUx2 / P249 / 40 = 64 / 58Solving for x1; x1 = (49 / 64) × (58 / 40) × I = 1038.25The amount of maximized utility is approximately 1038 units.Next, considering the given utility function and prices:U = 11 x1 + 43 x2, P1 = 56, P2 = 13, and I = 1629We can use the same formula (MUx1 / P1 = MUx2 / P2) to find the optimal amount of x1.The marginal utility of x1 is 11 and the marginal utility of x2 is 43.MUx1 / P1 = MUx2 / P211 / 56 = 43 / 13Solving for x1;x1 = (43 / 13) × (56 / 11) × I = 1691.47The optimal amount of x1 is approximately 1691 units.
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Leadership Online (B): Barnes & Noble vs Amazon.com in 2005.
Analyze the paper and resume the most important concepts of it. minimum of 300 words maximum 500.
the Leadership Online (B): Barnes & Noble vs Amazon.com in 2005 is a case study
I have the paper to analyze, but Chegg doesn't let me upload it
Leadership Online (B): Barnes & Noble vs Amazon.com in 2005 case study. However, I can provide you with a general overview of the concepts typically discussed in such a case study involving Barnes & Noble and Amazon.com during that time period.
The case study likely focuses on the competitive dynamics and strategic decisions made by Barnes & Noble and Amazon.com in the online retail industry in 2005. Here are some key concepts that could be discussed in the paper:
Competitive Landscape: The case study may analyze the online retail industry in 2005, highlighting the intensifying competition between Barnes & Noble, a traditional brick-and-mortar bookstore, and Amazon.com, an emerging e-commerce giant. It may explore how the industry landscape was changing due to the growth of online shopping.
Business Models: The paper might examine the business models of Barnes & Noble and Amazon.com and compare their approaches to online retail. Barnes & Noble, with its physical stores, had to adapt its model to compete with Amazon.com's online-only approach. The study could explore the strengths and weaknesses of each company's business model.
Strategic Decisions: The case study may delve into the strategic decisions made by Barnes & Noble and Amazon.com during that period. This could include initiatives to improve customer experience, expand product offerings, enhance distribution networks, or invest in technological innovations. The study might evaluate the effectiveness of these strategies and their impact on the companies' competitive positions.
Customer Experience: The paper could discuss how Barnes & Noble and Amazon.com approached customer experience in the online retail space. It may examine factors such as website design, ease of navigation, personalized recommendations, customer reviews, and fulfillment capabilities. The study might analyze how these factors influenced customer loyalty and satisfaction.
Technological Innovations: The case study may explore the role of technology in shaping the competition between Barnes & Noble and Amazon.com. This could include discussions on e-commerce platforms, supply chain management systems, customer relationship management tools, and data analytics. The study might assess how each company leveraged technology to gain a competitive advantage.
Future Outlook: The paper might conclude with an analysis of the future prospects for Barnes & Noble and Amazon.com based on their performance and strategies in 2005. It may discuss potential challenges and opportunities in the evolving online retail landscape.
Please note that the actual content and focus of the case study may vary, and the concepts mentioned above are general areas that could be covered.
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Your product is Top Tier Performance Equine Feed
What are your major 2-3 pricing objectives for this new product?
What is your expected final price for this new product? Show how you arrived at this price (e.g., break-even analysis and any other calculation you deem supportive of your conclusion).
Project your costs and profits for getting this product to market. (Provide as much detail as you can at this point).
Using a spreadsheet project your expected revenue for one year – 1st year by month; 2nd and 3rd years by quarter (show volume and dollars expected). Label rows and columns so that everything is clear and makes logical sense.
Pricing objectives for Top Tier Performance Equine Feed: One of the major pricing objectives for Top Tier Performance Equine Feed would be to maximize the profit margins. This objective would focus on setting a higher price for the product than the competitors, considering the production and distribution cost.
It's also essential to ensure that the price set is not too high, which would be a turn-off for customers. Another pricing objective would be to achieve market penetration. This would be done by setting a lower price to attract customers and improve the market share.
The main goal would be to have customers switching from competitor brands. Expected final price for Top Tier Performance Equine Feed: To arrive at the final price of Top Tier Performance Equine Feed, the production and distribution cost must be taken into consideration.
A break-even analysis should also be done to ensure the price is profitable while appealing to the customers.
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CAPITAL STRUCTURE The goal of the company is to maximize shareholders' wealth as well as minimize the cost of capital. Capital structure describes the mix of a firm's long-term capital, which is a combination of debt and equity. Capital structure is a type of funding that supports a company's growth and related assets. Sometimes it's referred to as capitalization structure or simply capitalization. A firm's judicious use of debt and equity is a key indicator of a strong balance sheet. A healthy capital structure that reflects a low level of debt and a large amount of equity is a positive sign of investment quality. As such the company must fine an optimal capital structure that minimizes the cost of financing and minimizes the risk of bankruptcy. An optimal capital structure is the basic balance of debt and equity a company should have in order to minimize its cost of capital and the rates it pays to use money to maximize its market value. QUESTION 1 AgarMaju Bhd, is a public listed company listed in Bursa Saham Malaysia. The firm has been operating since the last five years. The company manufactures agricultural equipment. It has an annual earnings before interest and tax (EBIT) of RM800,000 in perpetuity. The interest on debt is 12%. Required: (a) A. B. C. (b) The debt-to-equity ratio is given as 0.20 and its overall cost of capital is14%, calculate the following, if the company operates in the world without tax. i. ii. (4 marks) Assumed that the company's debt outstanding is RM600,000 and its unlevered cost of equity is 15%. The corporate tax is 25%. In the world with taxes, calculate the following: i. The value of the company The value of its equity ii. iii. The value of the company. The value of the equity. The company's weighted average cost of capital (Rwacc) (6 marks) In the world without taxes, explain two (2) assumptions used in the Modigliani- Miller Proposition. (5 marks) Discuss two (2) implications of Modigliani-Miller Proposition II, in the world with taxes for a levered company. (5 marks) Total: 20 marks
The Value of equity for the company is given by RM3,000,000 of the Capital structure.
(a) The WACC formula for a company without taxes is as follows:
WACC = E / V × Re + D / V × Rd
Where,
E is the market value of equity, D is the market value of debt, V is the market value of the whole company (D+E), Re is the cost of equity and Rd is the cost of debt.Now, WACC = E / V × Re + D / V × Rd= (E / V) × (Re)+ (D / V) × (Rd)
Where, E/V is the percentage of equity and D/V is the percentage of debt.
Let's plug in the values given in the question:
WACC = (0.8) × (15%) + (0.2) × (12%)
= 0.12 + 0.024
= 0.144 or 14.4%.
Debt outstanding is RM600,000 and the debt-to-equity ratio is 0.20, we can find out the total capitalization of the company by using the following formula:
V = E + D= E + 0.2E= 1.2E.
Therefore, the value of debt D = 0.2
E = RM600,000
E = RM3,000,000
Using the unlevered cost of equity 15% to calculate the cost of equity of the company with debt, we get:
Re = Ru + (Ru - Rd) × (D/E)Re
= 15% + (15% - 12%) × (600,000/2,400,000)
= 0.15 + 0.0075
= 0.1575 or 15.75%.
Value of the company = D + E
= RM600,000 + RM3,000,000
= RM3,600,000
Value of equity = V - D
= RM3,600,000 - RM600,000
= RM3,000,000
In the world without taxes, the two assumptions used in the Modigliani- Miller Proposition are as follows:
Assumption 1: There are no transaction costs or flotation costs associated with the issuance of securities. This means that investors and firms can buy and sell securities at the current market price without incurring any costs. Assumption 2: The investment decisions of the company are not affected by the capital structure of the company. This means that the company's investment decisions are independent of the financing decisions.Learn more about equity:
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a. Use a loanable funds diagram to analyze the impact of a decrease in government tax revenue on the rate, investment and national saving. b. The banking system has $50 million in deposit and $10 million in reserve, and there are no es mere The public holds $5 million in cash. Assume that the central bank sells $5 million government bondi open market operations. Calculate the change in money supply resulted from the above policy and the effects on interest rates and money quantity in the money market diagram.
A decrease in government tax revenue will lead to a decrease in national saving and a decrease in investment. In the loanable funds market, this will result in a decrease in the supply of loanable funds, causing the interest rate to increase. The higher interest rate will discourage borrowing and investment, leading to a decrease in investment levels. Additionally, the decrease in tax revenue reduces the funds available for saving, resulting in a decrease in national saving.
The sale of $5 million government bonds by the central bank in open market operations will decrease the money supply. Since reserves decrease by $5 million, the banking system's ability to create new loans and deposits is reduced. The initial change in reserves will lead to a multiple contraction of deposits. The money supply decreases by a multiple of the initial change in reserves based on the reserve requirement. This reduction in the money supply will lead to an increase in interest rates in the money market diagram and a decrease in the quantity of money available in the economy.
In the loanable funds market, a decrease in government tax revenue reduces national saving. This decrease in saving shifts the supply of loanable funds to the left. As a result, the equilibrium interest rate increases. With a higher interest rate, the cost of borrowing increases, leading to a decrease in investment. Therefore, both national saving and investment decrease due to the decrease in tax revenue.
In the money market, the central bank's sale of $5 million government bonds reduces reserves in the banking system. This decrease in reserves limits the ability of banks to create new loans and deposits. As banks make fewer loans, the money supply contracts by a multiple of the initial decrease in reserves. The specific multiple depends on the reserve requirement. The reduction in the money supply leads to an increase in interest rates as the demand for money exceeds the reduced supply. Additionally, the quantity of money available in the economy decreases due to the contraction of deposits caused by the decrease in reserves.
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PR 10-3A Depreciation by three methods; partial years OBJ. 2 Perdue Company purchased equipment on April 1 for $270,000. The equipment was expected to have a useful life of three years, or 18,000 operating hours, and a residual value of $9,000. The equipment was used for 7,500 hours during Year 1, 5,500 hours in Year 2, 4,000 hours in Year 3, and 1,000 hours in Year 4. Instructions Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Year Year 1 Year 2 Year 3 Year 4 Totals Calculations: Straight-line method: For full year: (Cost For part years: Year 1 Depreciation x Portion of Year Year 4 Depreciation x Portion of Year Units-of-activity method: (Cost Year 1 Year 2 Year 3 Year 4 a. Straight- Line Residual Value) Year 1 Year 2 Year 3 Year 4 Residual Value) Double-declining-balance method: Depreciable Balance Rate Depreciation Expense 1 X X b. Units-of- Activity Years Depreciation Depreciation Total Hours Hours Rate C. Double-Declining- Balance Residual Value Yearly Depreciation Since depreciation cannot cause book value to fall below residual value: Depreciable Balance Rate Yearly Depreciation X Portion of Year = Yearly Depreciation Yearly Depreciation
Straight-line method: Year 1: $87,000, Year 2: $87,000, Year 3: $87,000; Year 4: $87,000Units-of-activity method:, Year 1: $112,500, Year 2: $82,500, Year 3: $60,000, Year 4: $15,000
Given,Perdue Company purchased equipment on April 1 for $270,000.
The equipment was expected to have a useful life of three years, or 18,000 operating hours, and a residual value of $9,000.The equipment was used for 7,500 hours during Year 1, 5,500 hours in Year 2, 4,000 hours in Year 3, and 1,000 hours in Year 4.
To find Depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4 by(a) the straight-line method,
(b) the units-of-activity method, and (c) the double-declining-balance method.Straight-line method:
Formula to calculate annual depreciation expense = (Cost - Residual Value) / Useful life in yearsYear 1 : $270,000 - $9,000 / 3 = $87,000Year 2: $270,000 - $9,000 / 3 = $87,000Year 3: $270,000 - $9,000 / 3 = $87,000Year 4: $270,000 - $9,000 / 3 = $87,000
Units-of-activity method:
Formula to calculate depreciation rate per hour = (Cost - Residual Value) / Total estimated units of activity= ($270,000 - $9,000) / 18,000 = $15
Year 1: $15 x 7500 = $112,500Year 2: $15 x 5500 = $82,500Year 3: $15 x 4000 = $60,000Year 4: $15 x 1000 = $15,000
Double-declining-balance method:Formula to calculate depreciation rate per hour = 2 / Useful life= 2 / 3 = 66.67%
Depreciation Expense in Year 1= 66.67% x $270,000 = $180,009
Depreciable base for year 2= $270,000 - $180,009 = $89,991Depreciation Expense in Year 2= 66.67% x $89,991 = $59,991
Depreciable base for year 3= $89,991 - $59,991 = $29,000Depreciation Expense in Year 3= 66.67% x $29,000 = $19,333
Depreciable base for year 4= $29,000 - $19,333 = $9,667Depreciation Expense in Year 4= 66.67% x $9,667 = $6,444
Therefore, the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by the straight-line method, the units-of-activity method, and the double-declining-balance method is:
Straight-line method:
Year 1: $87,000
Year 2: $87,000
Year 3: $87,000
Year 4: $87,000Units-of-activity method:
Year 1: $112,500
Year 2: $82,500
Year 3: $60,000
Year 4: $15,000
Double-declining-balance method:
Year 1: $180,009
Year 2: $59,991
Year 3: $19,333
Year 4: $6,444
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What component of the profit equation should be set equal to zero to find the breakeven point? Multiple Choice Total sales revenue Total variable costs Total fixed costs Profit O The formula for break-even point in terms of units is: Multiple Choice Total variable costs/Unit contribution margin Total fixed costs/Contribution margin ratio Total fixed costs/Unit contribution margin Total variable costs/Total fixed costs Mustang Corp. has a selling price of $25, variable costs of $13 per unit, and fixed costs of $61,080. How many units must be sold to break-even? Multiple Choice 2,443 5,090 10180 4.698
The component of the profit equation that should be set equal to zero to find the breakeven point is profit.What is the break-even point?Break-even point (BEP) is a term that refers to the point at which a company's revenue and expenses are equal.
The breakeven point is the point at which a company's total sales revenues are equal to its total expenses. It's the point at which a company isn't making any money but isn't losing any either. The formula for break-even point in terms of units is Total Fixed Cost/Unit contribution margin.
To find the break-even point, the profit equation component should be set to zero.How to calculate the number of units that Mustang Corp. has to sell to break even?The total fixed cost is $61,080. The variable cost is $13 per unit. Let's call the selling price "p."
we have the equation: $25p = $13p + $61,080. Simplifying, we have $12p = $61,080. As a result, p = 5,090 units. Thus, Mustang Corp. has to sell 5,090 units .
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Case Study: Subversion or Territorial Rights Polymeric Corporation was still attempting to work the "bugs out of its recently installed computerized MRP system. It had been six months since the system was put into operation. Ed Explode, the production control manager, disagree with Sue Structure, the computer programmer, about the format and design of the reports the computer was to generate. Ed insisted, on behalf of his two production supervisors, that the report be printed with an additional space between lines. Each line represented a separate part number. Sue Structure argued that providing additional space would only increase the cost of the report. Sue exclaimed it would take a very good reason to convince her to modify the reports In an attempt to gather additional information for his argument Ed discussed the situation with his supervisors. After meeting several hours with them, he uncovered the real reason behind their request for more space in the report. It seemed the supervisors wanted the extra space so they could write in their own numbers regarding planned production and parts requirements. The supervisors apparently had little faith in the new computerized system. They both had been involved in an earlier system that was a complete failure. As he left his office to meet with Sue, Ed was not sure what position he should take Read the Case Study and answer two of the following questions. 1. How is the MRP system being subverted at Polymeric? 2. How can the integrity of the system be improved? 3. What strategy would you recommend to Ed Explode?
Improve training, emphasize data accuracy, establish open communication, and ensure adherence to established processes to enhance the integrity of the MRP system at Polymeric.
The MRP system is being subverted at Polymeric through territorial rights. The production supervisors want the extra space so they could write in their own numbers regarding planned production and parts requirements. They both had been involved in an earlier system that was a complete failure and thus they had little faith in the new computerized system.2. How can the integrity of the system be improved?The integrity of the system can be improved by adopting strategies like training the employees on how to use the system, and the need for accuracy and timeliness of data entry. It is also necessary to provide training to management staff in change management, especially when implementing new systems. An open communication system needs to be established between the two departments to work through the issues and come to a mutually acceptable solution. This can help to identify any subversion that is taking place within the system.3. What strategy would you recommend to Ed Explode?Ed Explode should initiate a meeting with Sue Structure and both supervisors to discuss their concerns about the MRP system and to clear the air. They should be made to understand the benefits of the system and how it can help the company. Ed can help to improve the integrity of the system by training employees, and the need for accuracy and timeliness of data entry. There is a need to establish an open communication system between the two departments to work through the issues and come to a mutually acceptable solution. It is important to ensure that employees follow established processes and procedures in the use of the MRP system.
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Bahrain Company makes snow blowers. It has two departments that process all products: Assembly and Testing. The following data pertain to the Assembly department: Direct materials are added at the beginning of the process and conversion costs are uniformly incurred. The degree of completion of conversion cost is as follows: At the beginning of September, work in process is 40 % complete and at the end of the month work in process is 60% complete. Other data for the month include: Beginning work-in-process inventory 6,400 units Units started 8,000 units Units completed 12,800 units Ending work-in-process inventory ? I Conversion costs for September $800,000 $1,040,000 Direct materials cost September Questione Filter (12) K First Previous. Next > Last > Beginning work-in-process inventory 6,400 units Units started 8,000 units Units completed 12,800 units Ending work-in-process inventory ? Conversion costs for September $800,000 Direct materials cost September $1,040,000 Beginning work-in-process costs: Materials $616,000 $328,320 Conversion Required: a) Prepare a production cost schedule for the Assembly Department at the end of September using the weighted average method of process costing. (9 marks) b) Prepare the necessary journal entries.
To prepare a production cost schedule for the Assembly Department at the end of September using the weighted average method of process costing, we need to calculate the equivalent units of production for direct materials and conversion costs.
(a) Production Cost Schedule using the weighted average method:
1. Direct Materials:
Beginning Work-in-Process (BWIP) units = 6,400 units (40% complete)
Units Started = 8,000 units
Units Completed = 12,800 units
Ending Work-in-Process (EWIP) units = ?
Equivalent Units of Production for Direct Materials:
Units completed = 12,800 units
BWIP units * Percentage complete = 6,400 * 40% = 2,560 units
Total equivalent units of production for direct materials = Units completed + BWIP equivalent units = 12,800 + 2,560 = 15,360 units
Direct Materials Cost per Equivalent Unit:
Direct materials cost for September = $1,040,000
Direct materials cost per equivalent unit = Direct materials cost for September / Total equivalent units of production
= $1,040,000 / 15,360 units = $67.71 per unit
2. Conversion Costs:
Equivalent Units of Production for Conversion Costs:
Units completed = 12,800 units
BWIP units * Percentage complete = 6,400 * 40% = 2,560 units
EWIP units * Percentage complete = EWIP units * 60% (given EWIP is 60% complete)
Total equivalent units of production for conversion costs = Units completed + BWIP equivalent units + EWIP equivalent units
= 12,800 + 2,560 + (EWIP units * 60%)
Conversion Costs per Equivalent Unit:
Conversion costs for September = $800,000
Conversion costs per equivalent unit = Conversion costs for September / Total equivalent units of production
Now, let's calculate the EWIP units and complete the production cost schedule:
EWIP units = Units started + BWIP units - Units completed
= 8,000 + 6,400 - 12,800
= 1,600 units
Total equivalent units of production for conversion costs = 12,800 + 2,560 + (1,600 * 60%)
= 12,800 + 2,560 + 960
= 16,320 units
Conversion costs per equivalent unit = $800,000 / 16,320 units
= $48.96 per unit
(b) Journal entries:
To record the completion of units and transfer to the Testing Department:
Debit: Work-in-Process Inventory - Testing Department
Credit: Work-in-Process Inventory - Assembly Department
To record the cost of direct materials and conversion costs:
Debit: Work-in-Process Inventory - Assembly Department
- Direct Materials Cost ($67.71 per unit * Units completed)
- Conversion Costs ($48.96 per unit * Units completed)
Credit: Raw Materials Inventory (for direct materials cost)
Credit: Conversion Costs (for conversion costs)
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1. [Specification] You are interested in returns to college education. You decide to use log (wage) as the dependent variable, and the main variable of interest is college education (a dummy variable, taking value 1 if an individual is college graduate, and 0, otherwise).
(a) Suppose education and experience are important determinants of wage and you decide to add them in the regression. Propose a population regression equation to examine the return to college education. Name variables as you wish. Be careful with notation in your answer; that is, be clear with whether you use the population regession function or the sample regression function (or fitted line).
(b) Suppose you want to test whether graduates from top 10 universities fare better in the labor market. Propose a population regression equation that allows a wage gap between top-10 University graduates (Group 1) and non- top-10 University graduates (Group 2). Define relevant variable(s). Write down the null and alternative hypotheses to test whether the means log wages differ between the two groups.
(c) Propose a population regression equation that allows the return to college education to vary with experience. Write down the null and alternative hypotheses to test whether the returns to college education vary with ex- perience. 1
(d) Propose a population regression that allows the return to experience to vary with the level of experience. Write down the null and alternative hypotheses to test whether the returns to experience vary with the level of experience.
(e) Propose a population regression equation that allows the return to col- lege education to vary with which university you graduate from (that is, whether one belongs to Group 1 or Group 2). Write down the null and al- ternative hypotheses to test whether the return to college education differ between the two groups.
(a) The population regression equation to examine the return to college education, taking into account education and experience as important determinants of wage, can be expressed as:
log(wage) = β₀ + β₁college + β₂education + β₃*experience + ε
where:
log(wage) is the natural logarithm of the wage,
college is a dummy variable indicating college education (1 for college graduate, 0 otherwise),
education represents the level of education,
experience represents the number of years of work experience,
β₀, β₁, β₂, and β₃ are the coefficients to be estimated, and
ε is the error term.
(b) To test whether graduates from top 10 universities fare better in the labor market, the population regression equation can be extended to include a variable distinguishing between top-10 university graduates (Group 1) and non-top-10 university graduates (Group 2). The equation can be written as:
log(wage) = β₀ + β₁college + β₂education + β₃experience + β₄group + ε
where:
group is a dummy variable indicating whether an individual belongs to Group 1 (top-10 university graduate) or Group 2 (non-top-10 university graduate).
The null hypothesis would state that there is no difference in the means of log wages between the two groups:
H₀: β₄ = 0
The alternative hypothesis would state that there is a difference in the means of log wages between the two groups:
H₁: β₄ ≠ 0
(c) To allow the return to college education to vary with experience, the interaction term between college and experience can be added to the population regression equation:
log(wage) = β₀ + β₁college + β₂education + β₃experience + β₄(college*experience) + ε
The null hypothesis would state that the returns to college education do not vary with experience:
H₀: β₄ = 0
The alternative hypothesis would state that the returns to college education vary with experience:
H₁: β₄ ≠ 0
(d) To allow the return to experience to vary with the level of experience, an interaction term between experience and a variable indicating the level of experience can be added to the population regression equation. Let's denote the variable indicating the level of experience as "level_exp":
log(wage) = β₀ + β₁college + β₂education + β₃experience + β₄(experience*level_exp) + ε
The null hypothesis would state that the returns to experience do not vary with the level of experience:
H₀: β₄ = 0
The alternative hypothesis would state that the returns to experience vary with the level of experience:
H₁: β₄ ≠ 0
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