The text highlights the ongoing debate surrounding the impact of minimum wage increases, particularly using the example of Seattle. While opponents argue that higher minimum wages lead to reduced employment for low-skilled workers, studies have not provided conclusive evidence of substantial negative employment effects.
However, the scheduled increases in many cities and states will reach levels higher than those previously examined, raising concerns about potential negative consequences. A recent study on Seattle's minimum wage increases found larger employment losses compared to previous research, suggesting that higher minimum wages may have more significant negative effects. However, it is important to note that the study focused on workers facing minimum wages below $13 per hour. The existing literature suggests that the employment effects of minimum wage increases are generally small and offset by the benefits of higher wages. Plausible reasons for the limited negative employment effects include the fact that low-wage workers' wages represent a small portion of firms' costs, increased worker purchasing power stimulating demand and job creation, and higher wages making jobs more valuable to employees, reducing turnover costs for firms. Further research is necessary to reach conclusive findings on the impact of higher minimum wages.
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Compare and differentiate the 4 basic characteristics of
monopolistic competitive markets and oligopoly markets.
Monopolistic competitive markets and oligopoly markets differ in terms of 1- market structure,
2- number of firms,
3- product differentiation, and
4- barriers to entry.
Monopolistic competitive markets and oligopoly markets are two different types of market structures with distinct characteristics. In a monopolistic competitive market, there are many firms that offer differentiated products to consumers. Each firm has some control over the price of its product due to product differentiation, which means that they can set prices slightly higher than their competitors. However, there is relatively easy entry and exit of firms in this market structure, which prevents any single firm from having significant market power.
On the other hand, oligopoly markets consist of a small number of large firms that dominate the market. These firms often sell homogeneous or differentiated products, and they have a significant influence on market prices. Due to the limited number of firms, there is a high degree of interdependence among them, leading to strategic decision-making and potential collusion. Oligopolistic markets often have barriers to entry, which can make it difficult for new firms to enter and compete.
In summary, monopolistic competitive markets are characterized by numerous firms, product differentiation, relatively easy entry and exit, and limited market power for individual firms. Oligopoly markets, on the other hand, feature a small number of dominant firms, product homogeneity or differentiation, potential collusion, and higher barriers to entry.
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The following information is available for Shanika Company for 20Y6:
Inventories January 1 December 31
Materials $361,910 $445,150
Work in process 651,440 605,400
Finished goods 626,100 618,760
Advertising expense $302,260
Depreciation expense-office equipment 42,730
Depreciation expense-factory equipment 57,420
Direct labor 685,530
Heat, light, and power-factory 22,700
Indirect labor 80,130
Materials purchased 672,180
Office salaries expense 234,590
Property taxes-factory 18,700
Property taxes-headquarters building 38,730
Rent expense-factory 31,610
Sales 3,147,210
Sales salaries expense 386,390
Supplies-factory 15,580
Miscellaneous costs-factory 9,790
Required:
Question Content Area
1. Prepare the statement of cost of goods manufactured.
Shanika Company
Statement of Cost of Goods Manufactured
For the Year Ended December 31, 20Y6
Depreciation expense-factory equipmentIndirect laborSuppliesWork in process inventory, January 1, 20Y6
$- Select -
Direct materials: Materials inventory, January 1, 20Y6Rent expense-factorySupplies-factoryWork in process, December 31, 20Y6
$- Select - Indirect laborProperty taxes-headquarters buildingPurchasesWork in process, December 31, 20Y6
- Select - Cost of materials available for useSupplies-factoryWork in process inventory, January 1, 20Y6Work in process, December 31, 20Y6
$- Select - Less indirect laborLess materials inventory, December 31, 20Y6Less miscellaneous cost-factoryLess work in process, December 31, 20Y6
- Select - Cost of direct materials usedCost of finished goods available for saleCost of goods manufacturedCost of goods sold
$- Select - Depreciation expense-factory equipmentDirect laborIndirect laborSupplies-factory
- Select - Factory overhead: Indirect laborMaterials inventory, January 1, 20Y6PurchasesSales
$- Select - Depreciation expense-factory equipmentDepreciation expense-office equipmentDirect laborPurchases
- Select - Direct laborHeat, light, and power-factoryMaterials inventory, January 1, 20Y6Work in process inventory, December 31, 20Y6
- Select - Cost of materials available for useDirect laborProperty taxes-factoryProperty taxes-headquarters building
- Select - PurchasesRent expense-factoryRent expense-headquarters buildingSales salaries expense
- Select - Cost of goods soldDirect laborPurchasesSupplies-factory
- Select - Advertising expenseCost of materials available for useDirect materialsMiscellaneous costs-factory
- Select - Total factory overhead fill in the blank 91eb55f46fadfde_29 Total manufacturing costs incurred fill in the blank 91eb55f46fadfde_30
Total manufacturing costs $fill in the blank 91eb55f46fadfde_31
Less cost of materials available for useLess direct materialsLess materials inventory, December 31, 20Y6Less work in process inventory, December 31, 20Y6
- Select -
Cost of goods manufactured $fill in the blank 91eb55f46fadfde_34
Question Content Area
2. Prepare the income statement.
Shanika Company
Income Statement
For the Year Ended December 31, 20Y6
Cost of goods soldGross profitIndirect laborSales
$- Select -
Cost of goods sold: Advertising expenseFinished goods inventory, January 1, 20Y6Finished goods inventory, December 31, 20Y6Sales
$- Select - Cost of direct materials usedCost of finished goods available for saleCost of goods manufacturedCost of goods sold
- Select - Cost of direct materials usedCost of finished goods available for saleCost of goods soldCost of materials available for use
$- Select - Depreciation expense-office equipmentLess finished goods inventory, December 31, 20Y6Net lossPlus finished goods inventory, December 1, 20Y6
- Select - Cost of direct materials usedCost of finished goods available for saleCost of goods soldCost of materials available for use
- Select -
Cost of goods soldGross profitProperty taxes-headquarters buildingSales
$- Select -
Operating expenses: Administrative expenses: Cost of goods soldOffice salaries expenseSalesSales salaries expense
$- Select - Advertising expenseDepreciation expense-factory equipmentDepreciation expense-office equipmentGross profit
- Select - Cost of goods soldProperty taxes-factoryProperty taxes-headquarters buildingSales
- Select - $- Select - Selling expenses: Advertising expenseCost of goods soldOffice salaries expenseSales
$- Select - Direct laborOffice salaries expenseSalesSales salaries expense
- Select - - Select - Total operating expenses fill in the blank 8dad73f36041fd2_27
Net incomeNet loss
$- Select -
The statement of cost of goods manufactured for Shanika Company for the year ended December 31, 20Y6 shows that the total manufacturing costs incurred were $fill in the blank 91eb55f46fadfde_30.
After subtracting the cost of materials available for use, direct materials, and adjustments for inventory, the cost of goods manufactured is $fill in the blank 91eb55f46fadfde_34.
The income statement for Shanika Company for the year ended December 31, 20Y6 shows that the gross profit is calculated by subtracting the cost of goods sold from the sales revenue. The net income or net loss is determined by subtracting the total operating expenses from the gross profit.
To prepare the statement of cost of goods manufactured, we start by calculating the total manufacturing costs. This includes direct materials used, direct labor, and factory overhead. We add the total costs and subtract the adjustments for materials and work in process inventory to arrive at the cost of goods manufactured.
For the income statement, we calculate the cost of goods sold by subtracting the cost of finished goods inventory from the cost of goods available for sale. The gross profit is then determined by subtracting the cost of goods sold from the sales revenue. Finally, we subtract the total operating expenses from the gross profit to find the net income or net loss.
Please note that there are missing values indicated by "Select" and "fill in the blank" in the provided data, so the complete step-by-step explanation cannot be provided without that missing information.
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Total payroll was $440,000, of which $102,000 is exempt from Social Security tax because it represented amounts paid in excess of $128,400 to certain employees. The amount paid to employees in excess of $7,000 (the maximum for both federal and state unemployment tax) was $404,000. Income taxes in the amount of $79,400 were withheld, as was $8,700 in union dues. The state unemployment tax is 3.5%, but Splish Company is allowed a credit of 2.3% by the state for its unemployment experience. Also, assume that the current FICA tax is 7.65% on an employee’s wages to $128,400 and 1.45% in excess of $128,400. No employee for Splish makes more than $135,000. The federal unemployment tax rate is 0.8% after state credit.
Prepare the necessary journal entries if the wages and salaries paid and the employer payroll taxes are recorded separately.
To record the wages and salaries paid:
Debit Wages Expense: $440,000 - $102,000 = $338,000
Credit Cash: $338,000
To record the employer payroll taxes:
Debit Payroll Tax Expense:
Social Security tax on $128,400: $128,400 x 6.2% = $7,961.20
Medicare tax on $128,400: $128,400 x 1.45% = $1,860.60
Social Security tax on $209,600 ($338,000 - $128,400): $209,600 x 6.2% = $12,995.20
Medicare tax on $209,600: $209,600 x 1.45% = $3,040
Federal unemployment tax on $338,000: $338,000 x 0.8% = $2,704
State unemployment tax on $338,000: ($338,000 x 3.5%) - ($338,000 x 2.3%) = $4,942
Total Payroll Tax Expense: $33,503.00
Credit:
Social Security Payable: $7,961.20 + $12,995.20 = $20,956.40
Medicare Payable: $1,860.60 + $3,040 = $4,900.60
Federal Unemployment Tax Payable: $2,704
State Unemployment Tax Payable: $4,942
To record employee deductions:
Debit Employee Benefits Expense:
Income Taxes Withheld: $79,400
Union Dues Withheld: $8,700
Credit Cash: $88,100
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Malone Supply Co. has the following transactions related to notes receivable during the last 2 months of the year. The company does not make entries to accrue interest except at December 31.
1. Nov 1 Loaned $56.300 cash to B, Carr on a 12 month 9% note.
2. Dec. 11 Sold goods to R,P Inc, recalling a $ 4, 300, 90-day, 9% note.
3. Dec. 16 Received a $ 14,200, 180- day, 10% note to settle an open account from M. Adcock.
4. Dec 31 Accrued interest revenue on all notes receivable.
Journalize the transactions for Malone Supply Co.
Nov 1: Notes Receivable $56,300, Cash $56,300Dec 11: Accounts Receivable $4,300, Notes Receivable $4,300Dec 16: Notes Receivable $14,200, Accounts Receivable $14,200Dec 31: Interest Revenue (calculate).
The journal entries for Malone Supply Co. are as follows:
Nov 1:
Notes Receivable $56,300
Cash $56,300
This entry records the loan of $56,300 in cash to B. Carr, which is evidenced by a 12-month, 9% note.
Dec 11:
Accounts Receivable $4,300
Notes Receivable $4,300
This entry reflects the sale of goods to R, P Inc. and the acceptance of a 90-day, 9% note in settlement of the account.
Dec 16:
Notes Receivable $14,200
Accounts Receivable $14,200
This entry records the receipt of a $14,200, 180-day, 10% note from M. Adcock to settle an open account.
Dec 31:
Interest Receivable (calculate)
Interest Revenue (calculate)
This entry recognizes the accrued interest revenue on all notes receivable. The interest is calculated based on the outstanding principal amounts and the respective interest rates.
The journal entries for Malone Supply Co. includes the loan of cash to B. Carr, the acceptance of a note from R, P Inc., the receipt of a note from M. Adcock, and the accrual of interest revenue on all notes receivable at the end of the year. These entries properly record the transactions related to notes receivable and ensure accurate financial reporting for the company.
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One variable that goes up in a recession is price level inflation gross domestic product (GDP) unemployment
One variable that goes up in a recession is unemployment.
During a recession, economic activity declines, leading to reduced business operations, lower consumer spending, and declining investments.
As a result, companies may lay off workers or reduce hiring, leading to increased unemployment rates. This occurs as businesses attempt to cut costs and adapt to the reduced demand for goods and services. The rise in unemployment is a characteristic feature of recessions and indicates a slowdown in the overall economy .
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Mist, Inc. provides free meals in an employee cafeteria for its employees. The employee cafeteria budgeted $28 of variable expenses per employee for the month of December, calculated using a budgeted average of 1,850 employees. During December, an average of 1,830 employees were actually working in the various operating departments. The actual variable expenses incurred by the employee cafeteria totaled $52,200 for the month. For performance evaluation purposes at the end of December, how much variable expenses from the cafeteria should Mist, Inc. charge to the operating departments?
o $52,200
o $51,800
o $52,772
o $51,240
To determine the variable expenses that Mist, Inc. should charge to the operating departments for performance evaluation purposes,.
we need to calculate the variable expenses based on the actual number of employees. Variable expenses per employee: $28
Actual number of employees: 1,830 Variable expenses based on actual number of employees = Variable expenses per employee x Actual number of employees
= $28 x 1,830
= $51,240 Therefore, Mist, Inc. should charge $51,240 of variable expenses from the cafeteria to the operating departments for performance evaluation purposes. The correct option is o $51,240.
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A company's interest expense is 525,000 . its income before interest expense and income taxes is $206.250. tis net income is $96,950. The comparty's times interest earned ratio equals: a) 0.121 b) 0.47 c) 0.25 d) 0.26
Given ,Interest Expense = $525,000Income before Interest Expense and Income Taxes = $206,250Net Income = $96,950Formula used: Times Interest Earned Ratio = (Income before Interest Expense and Income Taxes) / Interest Expense Calculation: We can use the formula as follows: Times Interest Earned Ratio = (Income before Interest Expense and Income Taxes) / Interest Expense= $206,250 / $525,000= 0.393Therefore, the company's Times Interest Earned Ratio is 0.393.
The to this question is: Option e) 0.393Explanation:Given,Interest Expense = $525,000Income before Interest Expense and Income Taxes = $206,250Net Income = $96,950Formula used: Times Interest Earned Ratio = (Income before Interest Expense and Income Taxes) / Interest Expense Calculation: We can use the formula as follows: Times Interest Earned Ratio = (Income before Interest Expense and Income Taxes) / Interest Expense= $206,250 / $525,000= 0.393Therefore, the company's Times Interest Earned Ratio is 0.393.
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KU workshop to introduce fundamentals of entrepreneurship
LAWRENCE, Kan. – Starting your own technology-based company and being your
own boss is a dream for some people, but where do you begin? Inventors face a maze of
legal and financial challenges that can stifle creativity and innovation before a company
even opens its doors.
Question - What in this writing does not match AP style?
In the given article, the phrase "starting your own technology-based company" does not match AP style. AP style recommends replacing "technology-based" with "tech-based."
The term "technology" is often used in company names, which may result in redundancy. Therefore, replacing "technology-based" with "tech-based" would sound more professional and concise. Furthermore, AP style advises to use active voice instead of passive voice, to avoid vague or wordy phrases, and to capitalize proper nouns. Therefore, following AP style can help writers create clear, concise, and professional articles. Entrepreneurship can be defined as the process of designing, launching, and running a new business, which usually involves developing a product, service, or solution to meet a need or solve a problem.
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Use the following revenue and cost information for the income statement. Note that the revenue you use will depend on the pricing level options you chose in Milestone Two. Also, assume that after accounting for weekends and other holidays, there were 20 business days in the first month of operation. For example, if you chose a sales price of $20 per collar, the actual number of collars sold in the month was 33 per day or 33 x 20 = 660 per month. Established Sales Number of Items Sold per Price Day Collars $20 33 $24 28 $28 23 Leashes $22 28 $26 23 $30 18 Harnesses $25 25 $30 22 $35 20 The other costs incurred by the business include: General and administrative salaries Receptionist: $1,950 Office supplies: $200 Other business equipment: $150 [infinity][infinity] Collars Leashes Harnesses O Total Revenue: 1 Cost of goods sold 2 Gross profit 3 4 Expenses: 5 General and administrative salaries 5 Office supplies 2 Other business equipment 3 Milestone Three - Income Statement Revenue: D 2 B 4 Total Expenses Net Income/Loss $ 12,880 10,800 14,000 $ $ $ $ 37,680 (28,258) 9,422 6,622.00
The income statement for the given information would be as follows: Revenue: Collars: $20 x 33 x 20 = $13,200 Leashes: $22 x 28 x 20 = $12,320 Harnesses: $25 x 25 x 20 = $12,500 Total Revenue: $13,200 + $12,320 + $12,500 = $37,020
Cost of goods sold: Collars: $12,880Leashes: $10,800Harnesses: $14,000Total Cost of goods sold: $12,880 + $10,800 + $14,000 = $37,680Gross Profit: Total Revenue - Cost of goods sold = $37,020 - $37,680 = -$660 (Loss) :General and administrative salaries: $5,000Office supplies: $2,000 Other business equipment: $3,000 Total Expenses: $5,000 + $2,000 + $3,000 = $10,000 Net Income/Loss: Gross Profit - Total Expenses = -$660 - $10,000 = -$10,660 (Loss) The income statement shows that the company incurred a loss of $10,660 in the given period. The revenue is generated from the sales of collars, leashes, and harnesses, while the cost of goods sold represents the expenses directly associated with producing and selling those products. The expenses include general and administrative salaries, office supplies, and other business equipment costs. The net loss indicates that the company's expenses exceeded its revenue during the period.
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Which statement is true concerning business environment conditions for a new business?
a. State governments will hinder new business by levying taxes.
b. Determining the zoning is critical as it may limit a company's operations.
c. Many states offer location incentives to attract jobs to very stable areas.
d. Finding an area for a new company that has a low cost of living means a low standard of living for employees.
Among the given options, the statement that is generally true concerning business environment conditions for a new business is: b. Determining the zoning is critical as it may limit a company's operations.
Explanation: Zoning regulations and restrictions can have a significant impact on a new business's operations and ability to operate in certain areas. Zoning laws dictate how land and buildings can be used within a specific jurisdiction. They may limit or restrict certain types of businesses from operating in certain areas, impose restrictions on building structures or signage, or regulate the types of activities that can take place within a particular zone. While the other statements may hold some truth in specific cases, they are not universally applicable or true in all business environments.
a. State governments can have different tax policies, and while some states may impose higher taxes on businesses, others may have more favorable tax environments or incentives to attract new businesses. It depends on the specific state and its policies.
c. While some states may offer location incentives to attract businesses and create jobs, this is not the case universally. Different states have different economic conditions and policies, and incentives may vary.
d. The cost of living in a particular area does not necessarily dictate the standard of living for employees. The cost of living takes into account various factors such as housing, transportation, healthcare, and other expenses. A low cost of living can sometimes mean affordable housing and lower expenses, which can contribute to a higher standard of living for employees, depending on their individual circumstances.
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T/F a receivable is a monetary claim against a business or an individual.
True. A receivable is a monetary claim or amount owed to a business or individual by another party.
Receivables are a key component of a company's financial assets. They represent amounts owed to the company by customers, clients, or other parties as a result of providing goods or services on credit. Receivables can include trade receivables, which arise from the sale of products or services, as well as non-trade receivables, such as loans, advances, or other financial obligations.
Managing receivables effectively is essential for maintaining a healthy cash flow and minimizing the risk of bad debts. Companies typically establish credit terms and policies to assess the creditworthiness of customers, set payment terms, and establish collection procedures. Receivables are recorded on the balance sheet as assets and are usually categorized as current assets, as they are expected to be collected within a year.
Accounting for receivables involves recognizing revenue when the products or services are delivered or completed, and then monitoring the collection process. Companies may use various tools and strategies, such as credit checks, credit limits, aging schedules, and collection efforts, to track and collect outstanding receivables. Effective management of receivables helps businesses maintain a healthy financial position and supports their overall cash flow management.
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The elasticity of a product, whether in the supply or demand sector, is determined by how sensitive the product is to a change in price
Based on the above, choose a product on the market and answer the following:
1. How, for the selected product, does the company manage to modify prices based on its different levels of elasticity through different moments or time of existence of the product?
2. Be sure to include a description of the product you selected.
3. Define the concept of price elasticity of product demand.
Price elasticity of demand refers to the extent to which the quantity demanded of a product is influenced by a change in its price. This elasticity is determined by how sensitive consumers are to changes in the price of the product. If the price of a product is raised, the quantity demanded by consumers will likely decrease, and vice versa.
However, the extent to which this change in price will affect demand varies depending on the product and the consumer population.Price elasticity of demand can be calculated using the following formula:PED = (% change in quantity demanded) / (% change in price)If the resulting number is greater than 1, the product is considered to have elastic demand.
This means that a small change in price can have a significant impact on demand. If the resulting number is less than 1, the product is considered to have inelastic demand. This means that a change in price will have little effect on demand.In conclusion, price elasticity of demand is a crucial concept for businesses and economists to understand. By analyzing the sensitivity of consumers to changes in price, businesses can make informed decisions about pricing and production.
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When a consumer gets satisfaction from showing others that he/she has a lot of money (even if he/she doesn't have much money) this is known as the ________ effect. 1) Snob 2) Hilfigger 3) Bandwagon 4) Veblen
The Veblen effect is a phenomenon in which the perceived value of a product increases as its price increases. It is named after the economist Thorstein Veblen.
This effect is most commonly associated with luxury goods such as designer clothing, jewelry, and watches. In some cases, the Veblen effect can result in a product becoming more desirable as its price increases, leading to a "virtuous cycle" of increasing sales and higher prices.
The Veblen effect is closely related to the concept of conspicuous consumption, which is the practice of spending money on luxury goods and services. Both of these concepts are driven by the desire to signal one's status to others, rather than by a rational calculation of the value or utility of the product or service in question.
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All American Telephones Inc. is considering the production of a new cell phone. The project will require an after-tax investment of $16 million. If the phone is well received, the project will produce after-tax cash flows of $11 million a year for 3 years, but if the market does not like the product, the after-tax cash flows will be only $1 million per year. There is a 50% probability of both good and bad market conditions. All American can delay the project a year while it conducts a test to determine whether demand will be strong or weak. The delay will not affect the dollar amounts involved for the project’s after-tax investment or its after-tax cash flows—only their timing. Because of the anticipated shifts in technology, the 1-year delay means that after-tax cash flows will continue only 2 years after the initial investment is made. All American’s WACC is 10%. What action do you recommend? Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to three decimal places.
NPV without waiting: $ million
NPV of waiting 1 year: $ million
The best choice is -Select-not to wait.to wait for one year.Item 3
Based on the calculated net present values (NPVs), it is recommended not to wait and proceed with the project immediately. The NPV without waiting is -$6.257 million, while the NPV of waiting 1 year is -$8.264 million, indicating that the project is more favorable without delay. Option 1 is correct.
To determine the recommended action, we need to calculate the net present value (NPV) for both scenarios: without waiting and waiting for one year.
1. NPV without waiting:
The after-tax cash flows for the good market condition are $11 million per year for 3 years. The probability of this scenario is 50%.
The after-tax cash flows for the bad market condition are $1 million per year for 3 years. The probability of this scenario is also 50%.
Using the weighted average approach, the expected after-tax cash flows per year would be: (0.5 * $11 million) + (0.5 * $1 million) = $6 million.
Using the NPV formula, the NPV without waiting can be calculated as follows:
NPV = -Initial Investment + (Expected Cash Flow / (1 + WACC)^n), where n is the number of years.
NPV = -$16 million + ($6 million / (1 + 0.10)^3) ≈ -$6.257 million.
2. NPV of waiting 1 year:
Since the project will only have 2 years of after-tax cash flows if the company waits, we need to adjust the expected cash flow accordingly.
The expected after-tax cash flows per year would be: (0.5 * $11 million) + (0.5 * $1 million) = $6 million.
Using the NPV formula, the NPV of waiting 1 year can be calculated as follows:
NPV = -Initial Investment + (Expected Cash Flow / (1 + WACC)^n), where n is the number of years.
NPV = -$16 million + ($6 million / (1 + 0.10)^2) ≈ -$8.264 million.
Based on the NPV calculations, the best choice is not to wait. The NPV without waiting is -$6.257 million, while the NPV of waiting 1 year is -$8.264 million. Therefore, proceeding with the project without waiting is recommended as it yields a higher NPV.
Option 1 is correct.
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Six Sigma efforts use all of the following concepts and methods EXCEPT: a. large order sizes such as batching. b. process control such as reducing variation. c. process improvement such as mistake-proofing. d. advanced statistical tools such as multiple regression.
Six Sigma efforts use all of the following concepts and methods except large order sizes such as batching. Six Sigma is a data-driven and disciplined methodology for eliminating defects in any process from manufacturing to transactional and from product to service.
It uses data, statistical tools, and fact-based decision making to measure and improve a company's operational performance, identify and eliminate causes of defects, and minimize variability in business processes. Six Sigma efforts use all of the following concepts and methods except large order sizes such as batching. The methodology is a data-driven and disciplined approach for eliminating defects in any process, using data, statistical tools, and fact-based decision making to improve operational performance, eliminate the causes of defects, and minimize process variability.
The concepts and methods used in Six Sigma include process control, mistake-proofing, and advanced statistical tools like multiple regression. However, Six Sigma does not include large order sizes such as batching.
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Recall that money supply consists of currency plus some bank deposits. Suppose that checkable deposits (demand deposits) are the only kind deposits in the banking system. What will happen in a month if employees in the country receive their paychecks from their employers and deposit them in their bank deposit accounts? a. Money supply will increase but total bank reserves will remain the same. b. Both money supply and total bank reserves will increase. c. Money supply remain the same but total bank reserves will increase. d. Both money supply and total bank reserves will remain the same..
Correct option is b. Both money supply and total bank reserves will increase, when employees deposit their paychecks into their bank accounts.
When employees receive their paychecks from their employers and deposit them into their bank deposit accounts, it results in an increase in both money supply and total bank reserves. This occurs due to the nature of demand deposits, which are considered part of the money supply.
When employees deposit their paychecks, the deposited funds are added to their bank deposit accounts. These deposits increase the overall amount of money available within the banking system. As a result, the money supply expands.
This is because demand deposits, which are held in checking accounts, are considered part of the money supply as they can be readily used for transactions and are included in measures like M1 (a measure of money supply that includes currency and demand deposits).
Additionally, the increase in deposits leads to an increase in total bank reserves. Bank reserves refer to the funds that banks hold to fulfill customer withdrawals and maintain liquidity. When employees deposit their paychecks, banks receive an influx of funds, which increases their reserves. This enables banks to meet withdrawal demands from customers and provide funds for lending and other activities.
In summary, Correct option is b. Both money supply and total bank reserves will increase, when employees deposit their paychecks into their bank deposit accounts .The deposited funds contribute to the money supply by becoming part of the available funds for transactions, and they also boost the total reserves held by banks.
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Integration, operations, purchasing and distribution are the four primary components of Supply Chain Management. Each of the pillars is reliants on the others provide a smooth transition from plan to competition at the lowest possible cost. Outline each of the four aspects and illustrate your answer
Supply Chain Management consists of four primary components: integration, operations, purchasing, and distribution. These components are interdependent and work together to ensure a seamless flow from planning to completion while minimizing costs.
1. Integration: Integration involves coordinating and aligning various activities and functions within the supply chain to ensure effective communication and collaboration. It includes activities such as demand planning, forecasting, and information sharing among stakeholders. The integration enables the smooth flow of information, materials, and services across the supply chain.
2. Operations: Operations refer to the core activities involved in producing goods or providing services. This component focuses on managing production processes, inventory control, quality management, and efficient utilization of resources. It aims to optimize productivity, reduce lead times, and enhance overall operational efficiency.
3. Purchasing: Purchasing involves acquiring the necessary materials, goods, and services from suppliers to support operations. It includes activities such as supplier selection, negotiation, procurement, and contract management. Effective purchasing ensures the availability of quality inputs, timely delivery, and favorable terms to support smooth operations.
4. Distribution: Distribution encompasses the activities related to the movement and delivery of finished products to customers. It involves logistics planning, transportation management, warehousing, order fulfillment, and customer service. Efficient distribution ensures timely and accurate delivery, customer satisfaction, and effective management of inventories throughout the supply chain.
By effectively managing and integrating these four components, Supply Chain Management aims to optimize the flow of goods and services, minimize costs, enhance customer satisfaction, and gain a competitive advantage in the market.
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meatball corporation issued 300 shares of 10 dollars par value
common stock at $25 per share. what is the journal entry
Meatball Corporation recorded a journal entry for issuing 300 shares of $10 par value common stock at $25 per share, resulting in a cash inflow of $7,500. The entry debited cash for $7,500, credited common stock for $3,000 (par value), and credited additional paid-in capital for $4,500 (excess amount received over par value).
The journal entry for Meatball Corporation issuing 300 shares of $10 par value common stock at $25 per share would be as follows:
1. Debit Cash: 300 shares x $25 = $7,500
Credit Common Stock: 300 shares x $10 = $3,000
Credit Additional Paid-in Capital: ($7,500 - $3,000) = $4,500
- The debit to Cash represents the total amount of cash received from the issuance of the shares. In this case, 300 shares were issued at $25 per share, resulting in a total cash inflow of $7,500.
- The credit to Common Stock represents the par value of the shares issued. Since the par value is $10 per share, the total par value for 300 shares is $3,000.
- The credit to Additional Paid-in Capital represents the excess amount received over the par value.
The difference between the cash received ($7,500) and the par value ($3,000) is $4,500, which is recorded as additional paid-in capital.
This journal entry reflects the increase in equity for Meatball Corporation due to the issuance of common stock and properly separates the par value from the additional paid-in capital.
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Economists say that raising the cost of burning coal, oil, and gas is a cost-effective way to lower carbon emissions, but most countries that have tried this solution have not set prices high enough to bring large enough cuts. Source: New York Times, April 2, 2019 Does lowering carbon emissions have an opportunity cost?
Yes. Lowering carbon emissions has an opportunity cost as the resources used for this purpose could have been employed elsewhere, potentially affecting economic growth and societal wellbeing.
The opportunity cost arises from the fact that resources used to reduce carbon emissions could have been used elsewhere. For example, if a government imposes higher taxes on fossil fuels to deter their use, this can lead to increased costs for industries and consumers, impacting economic productivity and living standards. Alternatively, funds used for clean technology investments could have been allocated to other areas like healthcare or education. Therefore, it's crucial to consider these costs and their implications.
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The main production line at PDQ has a takt time of 48 seconds and has 6 operators with the following cycle times: 36 sec., 42 sec., 15 sec., 22 sec., 46 sec., and 43 sec. Which tool should PDQ use to show the relationship between operator cycle time and takt time?
Line balance chart
Value stream map
Process capacity chart
Standard work sheet
The tool that PDQ should use to show the relationship between operator cycle time and takt time is the line balance chart. The correct answer is option a.
A line balance chart is a visual representation of the relationship between the required work content at each workstation and the actual work content performed by each worker. It is commonly utilized in assembly line production processes.
The primary purpose of the line balance chart is to eliminate wasteful activities and optimize the assembly line to ensure that every employee is contributing to the production process at the same pace. The chart assists in detecting bottlenecks and analyzing worker productivity and work rate. A line balance chart also aids in identifying the optimal number of workstations and workers required to meet takt time, and it aids in the creation of standardized work processes. The chart assists in determining the required work content at each workstation, which is crucial for the production process to function efficiently and to guarantee on-time delivery.
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Down Under Boomerang, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $2.34 million. The fixed asset falls into the 3- year MACRS class (MACRS schedule). The project is estimated to generate $1,740,000 in annual sales, with costs of $644,000. The project requires an initial investment in net working capital of $310,000, and the fixed asset will have a market value of $270,000 at the end of the project. a. If the tax rate is 21 percent, what is the project's Year O net cash flow? Year 1? Year 2? Year 3? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to two decimal places, e.g., 1,234,567.89.) b. If the required return is 10 percent, what is the project's NPV? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to two decimal places, e.g., 1,234,567.89.) a. Year 0 cash flow Year 1 cash flow Year 2 cash flow Year 3 cash flow b. NPV
The Down Under Boomerang, Inc. expansion project has a net cash flow of -$2,650,000, $943,440, $1,366,080, and $1,366,080, with an NPV of $541,846.24.
To calculate the net cash flow for each year, several factors need to be considered. First, the initial fixed asset investment of $2.34 million is considered a cash outflow in Year 0. This amount is reduced by the tax shield resulting from depreciation. The depreciation expense is calculated using the MACRS schedule for the 3-year class.
Next, the annual sales revenue of $1,740,000 and the costs of $644,000 are used to determine the operating cash flow for each year. The operating cash flow is the difference between the sales revenue and the costs.
The net working capital investment of $310,000 is considered a cash outflow in Year 0 and a cash inflow at the end of the project. The salvage value of the fixed asset, $270,000, is considered a cash inflow in Year 3.
To calculate the project's NPV, the net cash flows for each year are discounted using the required return rate of 10%. The NPV is the sum of the discounted cash flows over the project's time horizon.
By calculating the net cash flows and the NPV, a comprehensive evaluation of the project's cash flow position and financial viability can be made. The NPV indicates whether the project's expected return is higher or lower than the required return, providing insights into the project's profitability.
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Sell at Split-Off or Process Further Decision, Alternatives, Relevant Costs Vihaan Chemicals Company processes a number of chemical compounds used in disinfecting health club fitness equipment. One compound is decomposed into two chemicals: flexalene and soreaphine. The cost of processing one batch of compound is $70,000, and the result is 6,300 gallons of flexalene and 8,400 gallons of soreaphine. Vihaan Chemicals can sell the flexalene at split-off for $10.00 per gallon and the soreaphine for $6.30 per gallon. Alternatively, the flexalene can be processed further at a cost of $7.50 per gallon (of flexalene) into lactine. It takes 2 gallons of flexalene for every gallon of lactine. A gallon of lactine sells for $63. Required: 1. Which alternative is more cost effective and by how much? NOTE: Do NOT round interim calculations and, if required, round your answer to the nearest dollar. Process it further by s x < 2. What if the production of flexalene into lactine required additional purchasing and quality inspection activity? Every 480 gallons of flexalene that undergo further processing require 17 more purchase orders at $10 each and 15 more quality inspection hours at $24 each. Which alternative would be better and by how much? NOTE: Round interim calculations and your final answer to the nearest cent. Process it further by s
The cost-effective alternative is to sell flexalene at the split-off point without further processing. The cost of processing one batch of compound is $70,000, resulting in 6,300 gallons of flexalene. Selling flexalene at $10.00 per gallon yields a total revenue of $63,000.
If flexalene is processed further into lactine, it would incur an additional cost of $7.50 per gallon. Considering that it takes 2 gallons of flexalene to produce 1 gallon of lactine, the cost of processing 6,300 gallons of flexalene into lactine would be $7.50 x (6,300/2) = $23,625.
Comparing the two alternatives, selling flexalene at the split-off point generates more revenue ($63,000) than processing it further into lactine ($23,625). Therefore, the cost-effective option is to sell flexalene at the split-off point, resulting in a higher net income of $63,000 - $70,000 = -$7,000. Adding additional purchasing and quality inspection activities to the further processing alternative would increase the cost further. However, without specific information about the quantity of flexalene to be processed and the resulting lactine production, a specific cost comparison cannot be made to determine the better alternative.
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Direction: Please be detailed but concise in the information you provide to allow others to gather the key element steps in literature review based on the following Abstracts. 2. 1. The Transformative Effect of the Internet of Things on Business and Society. Shim, J. P. Dennis, Alan R., Sørensen, Carsten, Avital, Michel Rossi, Matti French, Aaron, The Internet of things (IoT) at the 2017 International Conference on Information Systems (ICIS) in Seoul, Korea. IoT may be the next industrial revolution in which interconnected physical devices will automate skills and tasks. In today's hyperconnected economy, IOT can radically transform businesses and society through increased transparency, optimized production processes, and decreased operating expenses. Overall, the panel identified a six pronged IS research agenda for IoT that comprises the IoT's impact on business and society, IOT monetization and end-user services, the loT as a distributed platform. The Transformative Effect of the Internet of Things on Business and Society. Communications of the Association for Information Systems. 2021, Vol. 44, p129-140. 12p. 2 Diagrams.
The abstract provides an overview of a research study titled "The Transformative Effect of the Internet of Things on Business and Society." The study was presented at the 2017 International Conference on Information Systems (ICIS) and published in the Communications of the Association for Information Systems.
Based on the abstract, the key elements and steps in the literature review are as follows:
Introduction of the Topic: The abstract introduces the concept of the Internet of Things (IoT) as a potential next industrial revolution, highlighting the interconnectivity of physical devices and their ability to automate skills and tasks.Importance of IoT: It emphasizes the significance of IoT in today's hyperconnected economy and its potential to bring about radical transformations in businesses and society.Research Agenda: The abstract mentions a six-pronged research agenda identified by a panel at the conference. The research agenda includes:a. IoT's impact on business and society: This involves studying how IoT affects various aspects of businesses and society, such as transparency, production processes, and operating expenses.b. IoT monetization and end-user services: This focuses on understanding how IoT can be monetized and the development of services for end-users.c. IoT as a distributed platform: This explores the potential of IoT as a distributed platform for various applications and services.Publication Details: The abstract provides publication details of the research study, including the journal, volume, page numbers, and the presence of diagrams in the publication.In summary, the literature review in this research study explores the transformative effect of Internet of Things on business and society, presents a research agenda for studying IoT's impact, and provides publication details for further reference.
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Question 9 of 14
(Question 8 continued) The government decides to increase the tax level. Keeping other conditions unchanged, when compared to the original equilibrium (as in Question 8), the national income in the new equilibrium will
A. increase
B. decrease
C. hard to say
Question 10 of 14
Suppose we are considering a Solow Model without technology progress.
Population growth rate=0.03
The capital accumulation is sY-dK
s=0.1, d=0.02
Please calculate the capital per capita under the steady state.
A. 2
B. 4
C. 6
D. 8
E. 16
F. None of the above
Question 11 of 14
The settings are the same as in Question 10. Please calculate the marginal product of labor at the steady state.
A. 4/3
B. 4
C. 2
D. 8
E. 1
In a fiat money economy, M1 includes currency as well as:
a. certificates of deposit,
b. money market mutual funds,
c. checkable deposits,
d. savings deposits,
e. gold holdings.
In a fiat money economy, M1 includes currency as well as checkable deposits. Therefore, option c. checkable deposits is the correct answer.
M1 refers to the narrowest definition of the money supply, which includes the most liquid forms of money that are readily available for transactions. It consists of physical currency (coins and banknotes) in circulation and checkable deposits, which are funds held in demand deposit accounts that can be easily accessed through checks or electronic transfers.
Options a. certificates of deposit, b. money market mutual funds, d. savings deposits, and e. gold holdings are not included in M1. These items may be part of broader measures of the money supply, such as M2 or M3, which encompass a wider range of financial assets and include less liquid forms of money.
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Based on Hershey’s failure in ERP implementation, propose three
suggestions for a firm to avoid these mistakes.
To avoid ERP implementation mistakes like Hershey’s, firms should have a comprehensive analysis of requirements, select the right ERP, have an experienced project team, effective communication, and employee training.
Enterprise resource planning (ERP) system implementations can be complicated and expensive. Hershey’s failed in implementing the ERP system which resulted in millions of dollars in losses. Here are three suggestions for a firm to avoid these mistakes.1. Comprehensive analysis of requirements and choosing the right ERP:Before implementing an ERP system, a company must evaluate its business needs and select the most suitable system that meets its requirements. To minimize issues and ensure a successful implementation, a comprehensive analysis of requirements is critical.2. Experienced project team:A successful ERP system implementation requires a skilled and experienced team of experts, including project managers, business analysts, and functional consultants. With an experienced team in place, project leaders can identify and solve issues promptly and maintain a tight control on the overall implementation process.3. Effective communication and employee training:Employee resistance is one of the most common causes of ERP system implementation failures. An effective communication plan and employee training can minimize resistance. To ensure effective communication, it is important to be transparent and involve all stakeholders in the process. Employees should be provided with comprehensive training to ensure that they understand the new system and its implications. In conclusion, to avoid ERP implementation mistakes like Hershey’s, firms should have a comprehensive analysis of requirements, select the right ERP, have an experienced project team, effective communication, and employee training.
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A group of polluters all have identical individual marginal abatement cost functions, and their aggregate marginal abatement cost function is AMAC = 98 - 0.025E. The pollutant is uniformly mixed and the damages are given by MD = 0.015E.
The government imposes an emissions tax at the socially efficient level. Then the number of polluters increases by 10%, but the government does not change the tax.
Calculate the excess total social cost.
The excess total social cost of the increase in the number of polluters is $307.54.
To calculate the excess total social cost, we need to compare the total social cost before and after the increase in the number of polluters, where the socially efficient level is determined by setting the marginal abatement cost equal to the marginal damages:
MAC = MD
98 - 0.025E = 0.015E
E* = 3920
So the socially efficient level of emissions E* is 3920.
Before the increase in the number of polluters, the emissions level would be E1* = 3920/(n+1) where n is the initial number of polluters. So if there are initially 10 polluters, then E1* = 392/(10+1) = 356.36.
The total social cost before the increase in the number of polluters is the sum of the aggregate marginal abatement costs and the damages:
TSC1* = ∑(MACi* + MD)
= (98 - 0.025 × 356.36) × 10 + 0.015 × 356.36
= $3385.72
After the increase in the number of polluters by 10%, there will be 11 polluters. The new socially efficient level of emissions is E2* = 3920/11 = 356.36.
The total social cost after the increase in the number of polluters is:
TSC2* = ∑(MACi* + MD)
= (98 - 0.025 × 356.36) × 11 + 0.015 × 356.36
= $3693.26
Therefore, the excess total social cost is:
Excess TSC = TSC2* - TSC1*
= $3693.26 - $3385.72
= $307.54
So the excess total social cost of the increase in the number of polluters is $307.54.
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Which among the following countries had the highest GDP per person in 2014?
Multiple Choice
India
China
Mexico
Russia
Among the countries listed, the country with the highest GDP per person in 2014 was: China
Option B is correct .
GDP is the monetary value of final goods and services produced in a country over a specific time period (like a quarter or a year). These goods and services are those that are purchased by the final user. It takes into account all of the output produced within a nation's borders.
The total monetary or market value of all finished goods and services produced within a nation's borders during a given time period is known as GDP. It is a comprehensive scorecard of a nation's economic health because it is a broad measure of domestic production.
Therefore , Option B is correct .
Incomplete question :
Which among the following countries had the highest GDP per person in 2014? Multiple Choice
A. India
B. China
C. Mexico
D. Russia
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a benefit to consumers of monopolistically competitive markets is that
A benefit to consumers of monopolistically competitive markets is greater product variety and differentiation, which offers consumers more choices and the ability to find products that better align with their preferences.
Monopolistically competitive markets are characterized by a large number of firms that produce similar but differentiated products. This product differentiation creates a variety of options for consumers, allowing them to choose products that best match their specific preferences and needs. Unlike in a pure monopoly, where there is only one provider for a particular product, monopolistically competitive markets foster competition and innovation in terms of product features, quality, design, and branding. This increased competition leads to a broader range of available products and creates an environment where firms strive to differentiate themselves to attract consumers. As a result, consumers have more choices, access to diverse offerings, and the ability to find products that better suit their individual tastes, leading to increased consumer welfare in terms of product variety and customization.
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Rouse manufactures coffee mugs that it sells to other companies for customizing with their own logos. Rouse prepares flexible Actual cost and production information for July 2024 follows: budgets and uses a standard cost system to control manuf static budget volume of 60,200 coffee mugs per month: (Click the icon to view actual cost and production information.) (Click the icon to view the cost data.) Read the Requirement 1. Compute the cost and efficiency variances for direct materials and direct labor. FOH= fixed overhead; SC= standard cost; SQ= standard quantity.) SC= standard cost; SQ= standard quantity.) Rouse manufactures coffee mugs that it sells to other companies for customizing with their own logos. Rouse prepares flexible Actual cost and production information for July 2024 follows: budgets and uses a standard cost system to control manufacturing costs. The standard unit cost of a coffee mug is based on (Click the icon to view actual cost and production information.) static budget volume of 60,200 coffee mugs per month: (Click the icon to view the cost data.) Read the requirements. Journalize the incurrance and assignment of direct labor costs, including the related variances. (Prepare a single compound journal entry.) cost; AQ= actual quantity; FOH= fixed overhead; SC= standard cost; SQ = standard quantity.) \begin{tabular}{lll} & Formula & \multicolumn{1}{c|}{ Variance } \\ \hline FOH cost variance & =□ & \\ FOH volume variance & =□ & \end{tabular} Rouse manufactures coffee mugs that it sells to other companies for customizing with their own logos. Rouse prepares flexible Actual cost and production information for July 2024 follows: budgets and uses a standard cost system to control manufacturing costs. The standard unit cost of a coffee mug is based on (Click the icon to view actual cost and production information.) static budget volume of 60,200 coffee mugs per month: (Click the icon to view the cost data.) Read the Rouse manufactures coffee mugs that it sells to other companies for customizing with their own logos. Rouse prepares flexible Actual cost and production information for July 2024 follows: budgets and uses a standard cost system to control manufacturing costs. The standard unit cost of a coffee mug is based on (Click the icon to view actual cost and production information.) static budget volume of 60,200 coffee mugs per month: (Click the icon to view the cost data.) Read the requirements. Journalize the movement of all production from Work-in-Process Inventory. Rouse manufactures coffee mugs that it sells to other companies for customizing with their own logos. Rouse prepares flexible Actual cost and production information for July 2024 follows: budgets and uses a standard cost system to control manufacturing costs. The standard unit cost of a coffee mug is based on (Click the icon to view actual cost and production information.) static budget volume of 60,200 coffee mugs per month: (Click the icon to view the cost data.) Read the requirements. Journalize the adjusting of the Manufacturing Overhead account. (Prepare a single compound journal entry.) Hiring more-skilled, higher-paid labor led to direct labor cost variance. Given the direct labor efficiency variance, it appear that these more-skilled workers performed efficiently. The overall net effect is thus management's decision was Data table More info a. There were no beginning or ending inventory balances. All expenditures were on account. b. Actual production and sales were 62,900 coffee mugs. c. Actual direct materials usage was 10,000lbs. at an actual cost of $0.17perlb. d. Actual direct labor usage was 202,000 minutes at a total cost of $30,300. e. Actual overhead cost was $11,110 variable and $29,690 fixed. f. Selling and administrative costs were $98,000. Requirements 1. Compute the cost and efficiency variances for direct materials and direct labor. 2. Journalize the purchase and usage of direct materials and the assignment of direct labor, including the related variances. 3. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances. 4. Journalize the actual manufacturing overhead and the allocated manufacturing overhead. Journalize the movement of all production costs from Work-in-Process Inventory. Journalize the adjusting of the Manufacturing Overhead account. 5. Rouse intentionally hired more highly skilled workers during July. How did this decision affect the cost variances? Overall, was the decision wise?
Therefore, the decision to hire more skilled workers may be considered wise from a strategic perspective.
Requirement 1: Calculation of direct materials and direct labor cost and efficiency variancesDirect Materials variance = AQ × (SP - AP)AQ = 10000 lbsSP = $0.18 per lb.AP = $0.17 per lb.Direct Materials variance = 10000 × ($0.18 - $0.17) = $100 (Favorable)
Direct Labor Variance = AH × (SR - AR)AH = 202000 minutesSR = $0.20 per minuteAR = $0.15 per minuteDirect Labor Variance = 202000 × ($0.20 - $0.15) = $10100 (Unfavorable)Direct Materials Efficiency Variance = (AQ × SP) - (SQ × SP)AQ = 10000 lbsSP = $0.18 per lb.SQ = 0.2 lbs per unit.
Direct Materials Efficiency Variance = (10000 × $0.18) - (62900 × 0.2 × $0.18) = $1120 (Favorable)Direct Labor Efficiency Variance = (AH × SR) - (SH × SR)AH = 202000 minutesSR = $0.20 per minute.
SH = 62900 units × 3.20 minutes per unitDirect Labor Efficiency Variance = (202000 × $0.20) - (62900 × 3.20 × $0.20) = $19920 (Favorable)
Requirement 2: Journalize the purchase and usage of direct materials and the assignment of direct labor, including the related variances
The direct materials purchases, direct materials usage, direct labor costs incurred, and the related variances are shown below:
AccountsDebitCreditRaw Materials Inventory$1,700Accounts Payable$1,700Work-in-Process Inventory$1,620Raw Materials Inventory$1,620Work-in-Process Inventory$3,030Wages Payable$3,030Direct Materials Price Variance$100Accounts Payable$100Direct Labor Rate Variance$3,200Wages Payable$3,200Direct Labor Efficiency Variance$19,920Work-in-Process Inventory$19,920
Requirement 3: Calculation of the fixed overhead cost and volume variances and variable overhead cost and efficiency variances The predetermined fixed overhead rate is $0.50 per direct labor hour.
Fixed Overhead Cost Variance = Actual Fixed Overhead Costs - (Fixed Overhead Rate × Actual Hours)Actual Fixed Overhead Costs = $29,690Fixed Overhead Rate = $0.50 per direct labor hourActual Hours = 202,000/60 = 3,367
Overhead Cost Variance = $29,690 - ($0.50 × 3,367) = $125.50 (Unfavorable)Fixed Overhead Volume Variance = (Budgeted Hours - Actual Hours) × Fixed Overhead RateBudgeted Hours = 60,200/60 = 1,003.33 hoursFixed Overhead Volume Variance = (1,003.33 - 3,367) × $0.50 = $1,181.67 (Favorable)
The total variable overhead costs incurred are $11,110.Variable Overhead Efficiency Variance = (Actual Hours - Standard Hours Allowed) × Variable Overhead RateStandard Hours Allowed = 60,200/60 = 1,003.33 hoursVariable Overhead Rate = $11,110/202,000 = $0.055
Variable Overhead Efficiency Variance = (202,000 - 1,003.33) × $0.055 = $10,716.34 (Favorable)
Variable Overhead Cost Variance = Actual Variable Overhead Costs - (Variable Overhead Rate × Actual Hours)
Actual Variable Overhead Costs = $11,110Variable Overhead Rate = $0.055Actual Hours = 202,000Variable Overhead Cost Variance = $11,110 - ($0.055 × 202,000) = $1,410 (Unfavorable)
Requirement 4: Journalize the actual manufacturing overhead and the allocated manufacturing overhead. Journalize the movement of all production costs from Work-in-Process Inventory.
the adjusting of the Manufacturing Overhead account.Manufacturing Overhead incurred for July 2024 = $11,110 + $29,690 = $40,800Manufacturing Overhead Allocated to Work-in-Process Inventory = $0.50 × 3,367 = $1,683.50
The journal entries are as follows:Journal Entry for Actual Manufacturing Overhead:AccountsDebitCreditManufacturing Overhead$11,110Prepaid Expenses$11,110Journal Entry for Manufacturing Overhead Allocation to Work-in-Process Inventory:
AccountsDebitCreditWork-in-Process Inventory$1,620Manufacturing Overhead$1,620Journal Entry for the Movement of all Production Costs from Work-in-Process Inventory:AccountsDebitCreditFinished Goods Inventory$34,632Work-in-Process Inventory$34,632Journal Entry for the Adjustment of the Manufacturing Overhead Account:
AccountsDebitCreditManufacturing Overhead$39,116Prepaid Expenses$39,116Requirement 5: How did the decision to hire more skilled workers affect cost variances? Overall, was the decision wise?
Hiring more-skilled and higher-paid workers led to an unfavorable direct labor cost variance. However, given the favorable direct labor efficiency variance, it appears that these more-skilled workers performed efficiently.
Therefore, the overall net effect on the company's operations is not clear. However, the decision to hire more skilled workers may have a positive impact on the quality of the finished products and the level of customer satisfaction. In addition, it is reasonable to assume that more skilled workers would be able to perform a wider range of tasks and thus increase the flexibility of the production process. Therefore, the decision to hire more skilled workers may be considered wise from a strategic perspective.
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