Keynesian policies can be effective in addressing more severe recessions, their application may not be warranted or effective in response to a minor recession like the one that occurred in 1990. It is important for policymakers to carefully assess the nature and scale of the recession and consider a range of factors before determining the appropriate policy response.
A Keynesian policy response may not make much sense in response to a minor recession like the one that occurred in 1990 for several reasons:
1. Scale of the recession: A minor recession is typically characterized by a relatively small decline in economic activity, limited duration, and mild impact on employment and output. In the case of the 1990 recession, it was considered a relatively mild economic downturn compared to more severe recessions. Keynesian policies, which often involve expansive fiscal measures such as increased government spending or tax cuts, are typically aimed at addressing larger-scale recessions with significant economic distress. Implementing such policies in response to a minor recession may be disproportionate and unnecessary.
2. Economic self-correction: Minor recessions are often seen as part of the natural economic cycle, with the economy having the capacity to self-correct and recover without significant government intervention. In these cases, market forces and adjustments, such as price and wage flexibility, can help restore equilibrium and economic growth over time. Keynesian policies, on the other hand, are predicated on the assumption that the economy may not naturally recover without active government intervention. Applying Keynesian policies to a minor recession may interfere with the natural self-correcting mechanisms of the market and lead to potential inefficiencies.
3. Budgetary considerations: Implementing Keynesian policies, particularly fiscal stimulus measures, often requires substantial government spending, which can have implications for the fiscal health of the country. In the case of a minor recession where the economic impact is relatively limited, the potential costs associated with implementing large-scale fiscal stimulus may outweigh the benefits. Governments need to consider the long-term sustainability of their fiscal position and the potential consequences of running budget deficits in response to a minor recession.
4. Potential unintended consequences: Keynesian policies, while intended to stimulate economic activity, can also have unintended consequences. For example, increased government spending or deficit financing may lead to inflationary pressures or create future fiscal challenges. In the case of a minor recession, the potential risks and unintended consequences of implementing Keynesian policies may outweigh the benefits, particularly if the economic downturn is expected to be short-lived and self-correcting.
Overall, while Keynesian policies can be effective in addressing more severe recessions, their application may not be warranted or effective in response to a minor recession like the one that occurred in 1990. It is important for policymakers to carefully assess the nature and scale of the recession and consider a range of factors before determining the appropriate policy response.
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Normandy Company has collected the following inventory data prior to preparing financial statements for the month of October. All purchases and sales are on credit. Assuming the periodic inventory system is used, determine the cost of the ending inventory and cost of goods sold using FIFO. Prepare the appropriate journal entries to record: (10 marks) (A) The October 6 purchase. (B) The October 12 sale. (C) The entries to close the October income statement items to Income Summary. (Assume that sales revenue and the elements of cost of goods sold are the only income statement items.)
the specific inventory data required to calculate the cost of the ending inventory and cost of goods sold using the FIFO (First-In, First-Out) method.
To calculate these values, we would need information about the quantity and cost of inventory purchases and sales throughout the month of October. Additionally, to prepare the appropriate journal entries for the October 6 purchase, October 12 sale, and the entries to close the income statement items to Income Summary, we would need the specific amounts and accounts affected by these transactions. Once the relevant inventory data and transaction details are provided, I would be happy to assist you in calculating the cost of the ending inventory and cost of goods sold using the FIFO method, as well as preparing the necessary journal entries.
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Human resources department is one of the most important department in any business organization. Compare and contrast HRM and personnel management. Describe HRM and it's role in the management of people in the organization.
Human Resource Management (HRM) and personnel management are two approaches to managing employees within an organization.
Personnel management refers to the traditional approach of managing employees, primarily focusing on administrative tasks such as recruitment, selection, compensation, and compliance with labor laws. The personnel management approach treats employees as resources to be managed efficiently, with an emphasis on maintaining discipline and order within the organization. It is mainly concerned with the day-to-day operations and transactional aspects of managing employees.
On the other hand, HRM is a more strategic and proactive approach to managing people in the organization. It recognizes employees as valuable assets and focuses on leveraging their skills and capabilities to achieve organizational goals. HRM aligns the management of people with the overall strategic objectives of the organization, emphasizing employee development, engagement, and retention. It encompasses various functions, including talent acquisition, performance management, training and development, compensation and benefits, and employee relations.
The role of HRM is to create a positive work environment where employees can thrive and contribute effectively to the organization's success. HRM professionals play a crucial role in talent management, ensuring the right people are hired, trained, and motivated to achieve organizational objectives. They also develop and implement policies and practices that promote fair treatment, diversity, and inclusion in the workplace. Furthermore, HRM professionals act as advisors to managers, providing guidance on people-related issues and helping them make informed decisions that align with the organization's overall strategy.
In summary, while personnel management focuses on administrative tasks and compliance, HRM takes a strategic approach to managing people. HRM aligns the management of employees with the organization's goals and objectives, emphasizing employee development, engagement, and retention to drive overall organizational success.
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How does a person accumulate and keep wealth in the U.S.; and how have policy and exclusion from government wealth-building programs limited black Americans’ opportunities to accumulate wealth? What ‘roadblocks’ are there to getting out of poverty while living in poverty?
Accumulating and keeping wealth in the U.S. can be achieved through various means, including:
1. Income Generation: Earning a stable and sufficient income through employment, entrepreneurship, or investments is crucial for wealth accumulation. Increasing income allows individuals to save and invest, which can lead to long-term wealth growth.
2. Saving and Investment: Building wealth often involves disciplined saving and strategic investments. By saving a portion of their income and investing it wisely, individuals can generate returns and increase their wealth over time. Investing in assets such as stocks, real estate, or retirement accounts can provide avenues for wealth growth.
3. Education and Skill Development: Access to quality education and skill development opportunities plays a vital role in wealth accumulation. Higher education and acquiring valuable skills can lead to higher-paying job opportunities and career advancement, increasing earning potential and wealth accumulation prospects.
4. Homeownership: Owning a home is often considered a significant asset and a means of wealth accumulation. Property values can appreciate over time, allowing homeowners to build equity and accumulate wealth. Additionally, homeownership provides stability and can serve as a foundation for generational wealth transfer.
However, policy and exclusion from government wealth-building programs have historically limited black Americans' opportunities to accumulate wealth. Some key factors include:
1. Racial Discrimination: Historically, black Americans have faced systemic racism and discrimination, including discriminatory housing practices, employment practices, and unequal access to education and financial services. These barriers have significantly hindered wealth accumulation opportunities.
2. Housing Discrimination: Redlining and discriminatory lending practices have limited black Americans' access to homeownership, a key driver of wealth accumulation. This has contributed to the racial wealth gap, as home equity is a primary source of wealth for many Americans.
3. Limited Access to Financial Services: Black Americans have often faced limited access to traditional financial services, such as affordable loans, banking services, and investment opportunities. This lack of access has restricted their ability to save, invest, and build wealth.
4. Exclusion from Government Programs: Historical policies, such as the New Deal and GI Bill, excluded black Americans from benefiting fully from government programs that facilitated wealth accumulation for white Americans. These exclusions have had long-lasting effects on the ability of black Americans to accumulate and transfer wealth across generations.
In terms of roadblocks to getting out of poverty while living in poverty, several challenges can make upward mobility difficult:
1. Limited Income: Low wages and unstable employment can make it challenging to save and invest, perpetuating the cycle of poverty. Financial constraints may restrict opportunities for education, skill development, and entrepreneurial endeavors.
2. Lack of Access to Resources: Limited access to quality education, healthcare, affordable housing, and essential services can impede individuals' ability to improve their circumstances and escape poverty.
3. Systemic Barriers: Discrimination, biases, and inequalities in various systems, including education, employment, and criminal justice, can create additional hurdles for individuals trying to escape poverty. These barriers can limit opportunities for upward mobility.
4. Intergenerational Effects: Poverty can have long-lasting effects, and individuals from disadvantaged backgrounds often face limited social capital and fewer opportunities for upward mobility. Breaking the cycle of poverty can be challenging without sufficient support and resources.
Addressing these challenges requires comprehensive policies and programs that promote equal opportunities, address systemic inequalities, provide access to resources and education, and support economic mobility for all individuals, regardless of their background.
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It is desirable that the greatest torque required to loosen the cap on a type of food container should be 2.5 Nm. For the producer’s risk of 0.05 for an acceptable quality level of 1% nonconforming, and a consumer’s risk of 0.10 for a rejectable quality level of 8%, determine the appropriate plan.
A single sampling plan with a sample size of 125 units, and accepting the lot if no more than 2 non-conforming units are found in the sample is an appropriate plan for the given problem.
According to the question, the producer's risk is 0.05, while the acceptable quality level is 1% non-conforming. Similarly, the consumer's risk is 0.10, and the rejectable quality level is 8%. We are given the greatest torque required to loosen the cap on a type of food container as 2.5 Nm.
The next step is to choose a sampling plan. The plan could be an AQL plan, an Operating Characteristic (OC) plan, or a Sequential Probability Ratio Test (SPRT) plan. An OC curve depicts the probability of accepting a lot for a specific percentage of defective products, and an AQL curve indicates the probability of accepting a lot for a specific AQL level. The OC plan is typically used for small batch sizes, while the AQL plan is used for larger batch sizes.
For this problem, an AQL plan is appropriate since we need to check a large number of items. The AQL is 1%, and the rejectable quality level is 8%, meaning that we will accept the lot if the number of non-conforming items is less than or equal to 1%, and we will reject the lot if the number of non-conforming items is more than or equal to 8%.
We will use a single sampling plan, with a sample size of 125 units. We will accept the lot if no more than 2 non-conforming units are found in the sample, while we will reject the lot if 9 or more non-conforming units are found in the sample. If 3 to 8 non-conforming units are found in the sample, we will inspect additional samples to reach a decision.
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IFRS 5 requires certain conditions to be met before an asset or
disposal group can be classified as held for sale.
What are these conditions?
IFRS 5 conditions for asset/disposal group classification as held for sale: intention to sell, active marketing, immediate availability, unlikely significant changes. Lower of carrying amount or fair value less costs to sell measurement.
Under IFRS 5 (International Financial Reporting Standards), an asset or disposal group can be classified as held for sale if the following conditions are met:
1. Management's intention: The entity must have the intention to sell the asset or disposal group. This intention should be supported by a formal plan, which includes identification of the asset or disposal group to be sold, the expected method of sale, and the expected time frame within which the sale is anticipated to be completed.
2. Active marketing: The asset or disposal group must be actively marketed for sale at a price that is reasonable in relation to its current fair value. The entity should also demonstrate a reasonable expectation of finding a buyer within the expected time frame.
3. Availability for immediate sale: The asset or disposal group must be available for immediate sale in its present condition, subject only to terms that are usual and customary for sales of such assets or disposal groups. Any restrictions or conditions on the sale should not significantly impede the sale process.
4. Unlikely significant changes: It should be highly unlikely that significant changes will be made to the plan to sell the asset or disposal group, or that the plan will be withdrawn. The entity should not have a history of withdrawing assets or disposal groups from sale after previously classifying them as held for sale.
If all of these conditions are met, the asset or disposal group is classified as held for sale and is presented separately on the balance sheet. Additionally, it is measured at the lower of its carrying amount or fair value less costs to sell, and it is no longer depreciated or amortized but rather measured at the lower of its carrying amount or fair value less costs to sell.
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A company with financial year ending 31 October purchased a machine for R3 450 000 (VAT inclusive) on 1 January 2021 for cash. The following cost were incurred over the period January to March 2021 in respect of the machine:
· Transport cost to delivery the sewing machine to the factory premises……….R11 400
· Wages for the workers to offload and move the machine………………………… R16 000
· R28 500 (excluding vat) was spent to purchase a part that the machine needs to enable it perform at maximum capacity:
· A concrete stand was erected at a cost of R15 640 (VAT inclusive) for the machine.
· The machine was brought into production from the 1st of April 2021
· The company directors estimated the machine’s residual value to be R42 300 (excluding VAT).
· Depreciation is calculated on a straight-line basIs at 20% per annum.
· On the 20th of July 2021 the Machine was damaged by a hailstorm and it was repaired at a cost of RR18 600 (excluding vat).
Due to the inconsistence performance of the machine as a result of the effect of the damage sustained in the hailstorm, the directors decided to sell the machine on 31 October 2022 for R2 350 000 (excluding VAT)
You are required to calculate the depreciation for the year ending 31st October 2021:
Select one:
a. R533 621
b. R605 420
c. R353 173
d. R405 911
Given,Machine cost (including VAT) on 1st January 2021 = R3 450 000The following costs incurred over the period January to March 2021 in respect of the machine.
Transport cost = R11 400Wages for workers = R16 000Part that January needs = R28 500Concrete stand = R15 640Total cost incurred = 11,400 + 16,000 + 28,500 + 15,640 = R71,540Machine was brought into production from 1st April 2021Residual value = R42 300Depreciation is calculated on a straight-line basis at 20% per annum .On the 20th of July 2021.
The machine was damaged by a hailstorm and it was repaired at a cost of R18 600 (excluding VAT). The company directors decided to sell the machine on 31 October 2022 for R2 350 000 (excluding VAT)Solution:Annual depreciation = (Cost of the machine – residual value) / Estimated life time Annual depreciation = (R3 450 000 - R42 300) / 5 years Annual depreciation = R681,540/ year Depreciation from 1 January 2021 to 31 March 2021 .
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Fish Packers Inc. (FPI) had the following transactions: Dec. 31 Feb. 10 Feb. 24 Fish Packers Inc. announced a bonus earned by the employees during the year, which amounted to $450,000. The source deductions on the bonus earned were CPP of $22,275, which FPI matched; El of $7,335, which it matched at 1.4 times; and income taxes of $112,500. In addition, FPI paid Workers' Compensation Board of British Columbia premiums of 6.54% of gross wages. Paid the wages recorded on December 31. Made the remittance to the government related to the December 31 payroll. Determine the amount of the employees' net wages.
To determine the amount of the employees' net wages, we need to consider the various deductions made from their gross wages.
First, let's calculate the deductions related to the bonus earned:
CPP (Canada Pension Plan) deduction: The CPP deduction for the bonus earned is $22,275. Since FPI matches this deduction, the total CPP deduction is $22,275 * 2 = $44,550.
EI (Employment Insurance) deduction: The EI deduction for the bonus earned is $7,335. FPI matches this deduction at 1.4 times, so the total EI deduction is $7,335 * 1.4 = $10,269.
Income tax deduction: The income tax deduction for the bonus earned is $112,500.
Next, let's calculate the Workers' Compensation Board of British Columbia premiums:
The premiums are calculated as 6.54% of gross wages. However, the gross wages are not provided in the information given. Without the gross wages figure, we cannot determine the exact amount of Workers' Compensation premiums.
Finally, we need to subtract the total deductions (CPP, EI, and income tax) from the bonus amount to determine the net wages:
$450,000 - ($44,550 + $10,269 + $112,500) = $282,681
Therefore, the employees' net wages amount to $282,681.
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If you want to have $1.0015-yrs from now, how much you need to deposit $ now using 10% rate? A) 0.2394 B) 31.772 C) 0.1315 D) 7.606
To determine the amount you need to deposit now to have $1.0015 in y years with a 10% interest rate, None of the given answer choices is correct.
You can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A is the future amount ($1.0015)
P is the principal amount (the amount you need to deposit now)
r is the annual interest rate (10% or 0.1)
n is the number of times the interest is compounded per year (assume annually, so n = 1)
t is the time in years (y)
Rearranging the formula to solve for P, we have:
P = A / (1 + r/n)^(nt)
Substituting the given values, we get:
P = 1.0015 / (1 + 0.1/1)^(1× y)
P = 1.0015 / (1 + 0.1)^y
P = 1.0015 / (1.1)^y
Calculating the equation for each answer choice:
A) P = 1.0015 / (1.1)^0.2394 = 0.1315 (incorrect)
B) P = 1.0015 / (1.1)^31.772 = 0.0068 (incorrect)
C) P = 1.0015 / (1.1)^0.1315 = 0.9901 (incorrect)
D) P = 1.0015 / (1.1)^7.606 = 0.5121 (incorrect)
Therefore, none of the given answer choices are correct.
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When the price of a good increases from $12 to $28, the quantity demanded of the good decreases from 160 to 40. What is the price efasticity of demand? a. 46 b. 66 e. 1.50 0. 1.86
The price elasticity of demand is a measure of how much the quantity demanded of a good changes in response to a change in its price.
It is calculated as the percentage change in quantity demanded divided by the percentage change in price.Let's calculate the price elasticity of demand using the given information:Initial price, P1 = 12New price, P2 = 28Initial quantity demanded, Q1 = 160New quantity demanded.
Q2 = 40Percentage change in price = [(P2 - P1) / P1] x 100% = [(28 - 12) / 12] x 100% = 133.33%Percentage change in quantity demanded = [(Q2 - Q1) / Q1] x 100% = [(40 - 160) / 160] x 100% = -75% the price elasticity of demand is calculated as:|E| = |(% change in quantity demanded) / (% change in price)| = |-75% / 133.33%| = 0.5625Since the value of price elasticity of demand is less.
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John and Barbara have just opened two savings accounts at their credit union. The accounts earn 10% annual interest.
a) John wants to deposit $1000 in his account at the end of the first year and increase this amount by $300 for each of the following 5 years.
b) Barbara wants to deposit an equal amount at the end of each year for the next 6 years. What should the size of Barbara’s annual deposit be so that the two accounts would have an equal balance at the end of 6 years?
SOLUTION:
A = $1000 + $300(A/G,10%,6) = $1000 + $300(2.224) = $1667.20
The above line is the solution, but why did we add 1000 without using any factor?
The calculation for John's savings account balance includes adding the initial deposit of $1000 without using any factor. The line in the solution, A = $1000 + $300(A/G,10%,6) = $1000 + $300(2.224) = $1667.20, shows how John's account balance is determined over the 6-year period.
In the given solution, the equation A = $1000 + $300(A/G,10%,6) is used to calculate John's savings account balance at the end of the 6-year period.
The term A/G,10%,6 represents the accumulation factor for a geometric series with an interest rate of 10% and a duration of 6 years. This factor, 2.224, is derived from the mathematical formula for the accumulation factor.
However, when calculating the balance, the initial deposit of $1000 is added separately to the accumulated value. This is because the $1000 represents the initial investment or deposit made at the beginning of the first year.
It is not included in the accumulation factor calculation because it is a fixed amount independent of the interest rate and time period. Therefore, to determine the final balance, the accumulated value from the geometric series is added to the initial deposit of $1000.
In the provided solution, the final balance for John's account after 6 years is calculated as $1667.20, which includes the initial deposit of $1000 and the accumulated value of $300 multiplied by the accumulation factor of 2.224.
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You have won a lottery and have the choice of one of the following options a) $1 million paid today b) $100,000 a year paid forever c) $180,000 per year for next 10 years d) $39,000 per year growing at 6% per year forever Which option would you choose if r=9%
Among all the given options, the present value of $39,000 per year growing at 6% per year forever has the highest present value. Hence, option d is the best among all the given choices. Further explanation is given below.
Present Value Calculation:Option a) $1 million paid todayThe present value of $1 million paid today is $1 million.Option b) $100,000 a year paid foreverThe present value of $100,000 a year paid forever can be calculated using the formula:P = A / rwhere,P = Present ValueA = Annual Paymentr = Interest RatePutting the given values into the above formula.
We get:P = $100,000 / 0.09P = $1,111,111Option c) $180,000 per year for next 10 yearsThe present value of $180,000 per year for the next 10 years can be calculated using the formula:P = (A / r) x (1 - (1 / (1 + r)^n))where,P = Present ValueA = Annual Payment = intrest raten = Number of PaymentsPutting the given values into the above formula.
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Please solve it with all requirements please all questions
1. Jack is saving to buy a new car. He needs to have \( \$ 21,000 \) in three years' time. How much will he have to invest today in an account that pays \( 6 \% \) interest annually to achieve his tar
Jack needs to invest $17,632 today in an account that pays 6% interest annually to achieve his target of $21,000 in three years.
To calculate the present value of Jack's investment, we can use the following formula:
Present Value = Future Value / (1 + Interest Rate)^Number of Years
In this case, the future value is $21,000, the interest rate is 6%, and the number of years is 3. Plugging these values into the formula, we get the following:
Present Value = $21,000 / (1 + 0.06)^3 = $17,632
Therefore, Jack needs to invest $17,632 today in an account that pays 6% interest annually to achieve his target of $21,000 in three years.
Here are some additional things to consider:
The interest rate used in the calculation is an annual rate. However, the account may compound interest more frequently, such as monthly or quarterly. If the account compounds interest monthly, the effective annual yield will be slightly higher than the stated annual rate.The calculation assumes that Jack will not make any additional deposits to the account. If Jack plans to make additional deposits, he will need to invest less money today.The calculation also assumes that Jack will not withdraw any money from the account before the three years are up. If Jack withdraws money from the account early, he will earn less interest and may not have enough money to reach his target.To know more about interest click here
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Which of the following wage and salary considerations is an impersonal cost?
A. Number of years in job B. Labor union contract wage rates C. Anniversary of hire raise D. Merit increases
The impersonal cost among the given wage and salary considerations is the labor union contract wage rates. option B is the answer.
Unionized employees negotiate these wages and benefits through a collective bargaining agreement (CBA), which can cover one or more employment contracts between a union and an employer. Union contract wages are established by a collective bargaining agreement (CBA), which is a legally binding agreement between a union and an employer.
These contracts cover a wide range of topics, including wages, hours, and working conditions, and they can last for years at a time. Union workers receive wages based on the provisions of the contract, which are independent of the individual worker's performance, seniority, or any other personal factor.
Impersonal costs are expenses that don't vary based on changes in the level of business activity, such as the payment of rent or insurance premiums. In this instance, the impersonal cost is the contractual wages and benefits determined through negotiations by the union. Hence, the correct answer is option B.
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According to classical economists, in times of unemployment the most appropriate countercyclical, or stabilization, policy is for the government to:
a. increase the minimum wage.
b. impose wage and price controls.
c. stimulate aggregate demand.
d. cut taxes.
e. do nothing.
According to classical economists, the most appropriate countercyclical policy in times of unemployment is for the government to do nothing, as they believe that market forces will naturally restore equilibrium. (Option E)
Classical economists argue that economies are self-regulating and will automatically correct any deviations from full employment in the long run. They believe that interfering with market mechanisms, such as implementing wage controls or stimulating aggregate demand through government intervention, can create inefficiencies and distortions.
Instead, classical economists advocate for a laissez-faire approach, where the government minimizes its intervention in the economy and allows market forces to operate freely. They argue that wages and prices should be determined by market conditions and any temporary unemployment will be resolved as the economy adjusts and workers find new employment opportunities.
It's important to note that this perspective differs from Keynesian economics, which advocates for active government intervention to stimulate aggregate demand during times of economic downturn. Classical economists, on the other hand, emphasize the importance of market mechanisms and believe that government intervention can hinder the natural adjustment process.
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Today is your son's twelfth birthday! Congrats! Time to start saving money for college, which will coincidentally start on your son's eighteenth birthday. You remembered that your local bank has recently started offering its customers a great program that allows you to save up for your child's future education when the child turns twelve. Under this program, you would need to make exactly six deposits, each in the amount of $13,500. The first deposit would need to be made today. And once your child turns eighteen and starts college, the bank would allow you to withdraw $27,000 right away, and repeat the money withdrawals from the same account (that continues earning interest) in the same amount once a year, with a total of four withdrawals to cover the college tuition.
What annual interest rate does the bank offer on this college savings program? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 12.34) Return ______%
The bank offers an annual interest rate of approximately 5.43% on this college savings program.
To find the annual interest rate offered by the bank on the college savings program, we need to compare the future value of the deposits with the future value of the withdrawals.
Given:
Deposit amount: $13,500 made in six equal installments
Withdrawal at age 18: $27,000
Annual withdrawals for four years: $27,000 each
We can use the future value formula for an ordinary annuity to calculate the future value of the deposits and withdrawals. The formula is:
Future Value = Cash Flow * [(1 + r)^n - 1] / r
Where:
r = Annual interest rate
n = Number of periods (in this case, six deposits and four withdrawals)
Let's calculate the future value of the deposits:
Future Value of Deposits = $13,500 * [(1 + r)^6 - 1] / r
Now, let's calculate the future value of the withdrawals:
Future Value of Withdrawals = $27,000 * [(1 + r)^4 - 1] / r
We want these two values to be equal:
Future Value of Deposits = Future Value of Withdrawals
$13,500 * [(1 + r)^6 - 1] / r = $27,000 * [(1 + r)^4 - 1] / r
To solve for the annual interest rate (r), we need to use numerical methods or financial calculators. Using these methods, the approximate annual interest rate offered by the bank on this college savings program is approximately 5.43%.
Therefore, the bank offers an annual interest rate of approximately 5.43% on this college savings program.
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Ashburn Corporation issued 30-year bonds 2 years ago at a coupon rate of 7.6 percent. The bonds make semiannual payments. If these bonds currently sell for 105 percent of par value, what is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
The YTM of Ashburn Corporation's bonds is calculated based on the current market price and coupon rate.
To calculate the yield to maturity (YTM) of the bonds, we need to find the discount rate that equates the present value of the bond's future cash flows to its current market price.
Given that the bonds make semiannual payments, we need to consider the semiannual coupon payment and the semiannual discount rate. The coupon rate is 7.6%, which means that the bond pays 7.6% of the par value as a coupon payment twice a year.
Since the bonds currently sell for 105% of the par value, we can say that the market price is 105% of the par value. This implies that the present value of the bond's cash flows is equal to the market price.
To find the YTM, we can use financial calculators or iterative methods to solve for the discount rate that makes the present value of the bond's cash flows equal to the market price.
By solving for the YTM, we can determine the annualized yield to maturity of the bonds as a percentage.
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Consider the following data for a closed economy: Y= $15 trillion C = $9 trillion 1 = $2 trillion TR= $2 trillion T= $3 trillion Use the data to calculate the following. (Enter your responses as integers.) a. Private saving: $ trillion.
In a closed economy, private saving represents the portion of income that households retain after consumption and taxes. It is the amount of income that is not spent on consumption and is available for future investment or accumulation of wealth. To calculate private savings, we use the formula:
Private Savings equals Y, C, and T.
Given the data:
Y = $15 trillion (national income or output)
C = $9 trillion (consumption expenditure)
T = $3 trillion (taxes)
We can change the values in the formula as follows:
Private Saving = $15 trillion - $9 trillion - $3 trillion
= $3 trillion
The calculation shows that the private saving in this closed economy is $3 trillion. This means that after accounting for consumption expenditure and taxes, households are saving $3 trillion.
Private saving is important as it contributes to the accumulation of financial resources that can be used for investment, future consumption, or as a buffer during economic downturns.
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While preparing a risk map, risks like earthquake, tomado, mold exposure, and terrorism would usually: a. fall into the low-frequency/high-severity quadrant. b. fall into the high-frequency/high-severity quadrant. c. fall into the low-frequency/low-severity quadrant. d. fall into the high-frequency/low-severity quadrant. e. be excluded because they usually cannot be insured and have to be retained. 17. If you want to ski in spite of the hazards involved, you can take instruction to improve your skills and reduce the likelihood of you falling down a hill or crashing into a tree. This is an example of: a. loss reduction, which reduces the probability of loss. b. loss prevention, which reduces the severity of loss. c. loss reduction, which reduces the severity of loss. d. loss reduction, which reduces the frequency of loss. e. loss prevention, which reduces the probability of loss.
For the risk map, the risks like earthquake, tornado, mold exposure, and terrorism would typically fall into the high-frequency/high-severity quadrant (b).
These risks are events that may occur with relatively high frequency and have severe consequences.
When it comes to skiing in spite of the hazards involved, taking instruction to improve skills and reduce the likelihood of accidents would be an example of loss prevention, which reduces the probability of loss. The correct option is (e).
Loss reduction refers to measures taken to minimize the impact or severity of a loss once it occurs, while loss prevention focuses on preventing the loss from occurring in the first place. In the case of skiing, improving skills and reducing the likelihood of accidents would fall under loss prevention as it aims to reduce the probability of a loss event (falling down a hill or crashing into a tree).
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An economy consists of two people with utility functions: U₁ = min(x, y) and u₂ = √x√y. Their initial endowments are (ri, y) = (10,6) and (x,y)= (10, 14). Draw the Edgeworth box for this economy, labeling the axes for each person, the initial endowment, and each person's indifference curve at this initial endowment. Shade in the area showing allocations that are Pareto improvements over the initial bundles.
In this two-person economy, the shaded area represents allocations that are Pareto improvements over the initial bundles, indicating potential welfare gains.
The Edgeworth box is a graphical representation used to analyze the possible allocations between two individuals in an economy. In this case, the utility functions of Person 1 and Person 2 are U₁ = min(x, y) and U₂ = Vxvy, respectively.
To draw the Edgeworth box, we label the axes for each person, with x and y representing the goods. The initial endowments are (10,6) for Person 1 and (10,14) for Person 2. We plot these endowments as points on the respective axes.
Next, we draw the indifference curves for each person at their initial endowments. Person 1's utility function, U₁ = min(x, y), represents a linear utility curve that forms a right-angled corner. Person 2's utility function, U₂ = Vxvy, will have a different shape depending on the value of V, but it is concave and decreasing in both goods.
To shade the area representing Pareto improvements, we need to identify allocations that make at least one person better off without making the other person worse off. These allocations lie outside the initial allocation curve, towards the Pareto improvement direction. The shaded area includes all such allocations that result in a higher overall utility.
In conclusion, the Edgeworth box for this economy shows the initial endowments and the indifference curves of both individuals. The shaded area represents potential allocations that are Pareto improvements over the initial bundles, suggesting possible welfare gains.
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7. Given the following domestic demand and supply functions Qs=40P and Qd=5000−10P. Plot clearly and answer the following; Illustrate it all below If The autarky P= and Q= II At the international price of $200 is this country an exporter or importer? शा How much is being exported or imported? II TI What is the net gains from free trade?
At autarky, the equilibrium price P= $100, and equilibrium quantity Q= 2000.II At the international price of $200, the country is an exporter. II TI 2000 units are being exported from the country. The net gain from free trade is $1,800.
Given domestic demand and supply functions are Qs = 40P and Qd = 5000-10P.The following graph shows the equilibrium point in a free trade market. The vertical axis represents price, and the horizontal axis represents quantity. In a closed economy or autarky, there is no international trade, so the equilibrium price and quantity are determined by the supply and demand curves. The equilibrium price is $100, and the equilibrium quantity is 2000.At an international price of $200, the country is an exporter because the world price is higher than the domestic price. This will increase the domestic quantity supplied, reducing the domestic price and increasing the quantity demanded. The country will export 2000 units, as shown by the horizontal distance between the equilibrium point and the world price line. The net gain from free trade is the area between the demand and supply curves from the free trade equilibrium to the domestic equilibrium point, from point B to point A. The area represents the gains from trade in the form of producer and consumer surplus and amounts to $1,800.
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Cullumber Company issued $684,000, 7%, 10-year bonds on January 1, 2022, for 734,340. This price resulted in an effective interest rate of 6% on the bonds. Interest is payable annually on January 1. Cullumber uses effective-interest method to amortization for bond premium or discount.
Prepare the schedule using effective-interest method to amortize bond premium or discount of Cullumber.
To prepare the schedule using the effective-interest method to amortize the bond premium or discount for Cullumber Company, we need to calculate the annual interest expense and the amortization of the bond premium or discount for each year.
Here's how the schedule would look:
Year | Beginning Carrying Value | Interest Expense | Amortization | Ending Carrying Value
2022 | $734,340 | $44,060 | $10,660 | $723,680
2023 | $723,680 | $43,421 | $11,299 | $712,381
2024 | $712,381 | $42,743 | $11,977 | $700,404
2025 | $700,404 | $42,024 | $12,696 | $687,708
2026 | $687,708 | $41,261 | $13,459 | $674,249
2027 | $674,249 | $40,454 | $14,266 | $659,983
2028 | $659,983 | $39,600 | $15,120 | $644,863
2029 | $644,863 | $38,697 | $16,023 | $628,840
2030 | $628,840 | $37,742 | $16,978 | $611,862
2031 | $611,862 | $36,734 | $17,986 | $593,876
The beginning carrying value is the previous year's ending carrying value. The interest expense is calculated by multiplying the beginning carrying value by the effective interest rate of 6%. The amortization is the difference between the interest expense and the cash interest payment ($44,060 - $33,400). The ending carrying value is the beginning carrying value minus the amortization.
This schedule allows for the gradual amortization of the bond premium over the life of the bond.
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It Is The End Of The Accounting Year And Onassis Oil Ltd Is Finalizing Its Annual Accounts. Most Of The Work, Such As Calculation Of Depreciation, Unwinding Of The Discount On Its Decommissioning Asset, Has Been Finished But It Still Has To Complete Its Impairment Tests. One Of The Fields That Onassis Oil Ltd Operates Is The Offshore Watermelon Oil Field.
It is the end of the accounting year and Onassis Oil Ltd is finalizing its Annual accounts. Most of the work, such as calculation of depreciation, unwinding of the discount on its decommissioning asset, has been finished but it still has to complete its impairment tests. One of the fields that Onassis Oil Ltd operates is the offshore Watermelon Oil field. Onassis reports its financial results in its home country and also in the United States of America, and, consequently, it is obliged to carry out an impairment test to comply with the regulations that apply in both countries. In its home country, Onassis must perform its impairment tests in accordance with International Accounting Standards, namely IAS 36, and as a successful efforts company, in the USA it must comply with Statement of Financial Accounting Standards (SFAS) 144. The data on which these impairment tests will be carried out is as follows: Watermelon Oil Field i. The production forecast for the field is detailed below in barrel of oil per daily basis Year 1 2 3 4 5 Production 18,500 20,200 21,700 17,850 16,350 ii. Operating costs per year are forecast to be $73.7 million in year 1 and are expected to rise by 5% per annum during the subsequent two years and rise by 7.5%, thereafter iii. It is forecast that an additional investment of $67 million and $72 million will be spent on drilling additional production wells during the second and fourth year respectively. These are required to gain access to additional reserves in an identified field extension. These reserves are already included in the current production profile. iv. The cost of decommissioning the field is forecast at $300 million and will be carried out in the year after the end of production. v. Cumulative Depreciation, Deletion and Amortization (DD & A) on a Units of Production (UoP) basis is $815 million. vi. The oil price at the end of the current year is $23 per barrel. This is the lowest the oil price has been for many years and the management of the company do not consider that the oil price will continue this low level. It is their view that prices will rise and, based on the medium -term trends, they have instructed that the following oil prices should be used for forecasting, budgeting and other financial calculations such as the impairment test: Year 1 $ 25 per barrel Year 2 $ 26 per barrel Year 3 $ 28 per barrel 5 Year 4 $ 26 per barrel Year 5 $ 25 per barrel vii. The total capitalized costs of the field for exploration, appraisal and development are below: Number Type of Expenses Cost ($) 1 Acquisition 52,000,000 2 Exploratory Successful hole 29,600,000 3 Facilities, topsides and pipelines 825,000,000 4 6 Development Well Successful – Platform X 108,000,000 5 2 Development Dry Hole – Platform X 36,000,000 6 5 Development Well Successful – Platform Y 87,500,000 7 1 Development Dry Hole – Platform Y 17,500,000 Total 1,155,600,000 viii. The accumulated provision for decommissioning is $201.5 million ix. Assume a discount rate of 10% for the first three years and 15% thereafter Required: 1. Perform impairment tests in accordance with the requirement of IAS 36. [15 Marks] 2. Perform impairment tests in accordance with SFAS 144 to enable the company complied with the USA requirements as a Successful Efforts Company [10 Marks] Question 3 The Jackson Oil Company Limited is a 25% partner in the Mongolia license. There has been
First three years: 10%
Thereafter: 15%
Based on this information, the impairment tests need to be performed according to IAS 36 and SFAS 144.
At the end of the accounting year, Onassis Oil Ltd is preparing its annual accounts and needs to conduct impairment tests for its assets. Specifically, Onassis operates the offshore Watermelon Oil Field. The company is required to comply with International Accounting Standards (IAS 36) in its home country and with Statement of Financial Accounting Standards (SFAS) 144 in the United States.
To perform the impairment tests, the following data is provided for the Watermelon Oil Field:
i. Production forecast (in barrels of oil per day):
Year 1: 18,500
Year 2: 20,200
Year 3: 21,700
Year 4: 17,850
Year 5: 16,350
ii. Operating costs per year:
Year 1: $73.7 million
Expected annual increase: 5% for the next two years, 7.5% thereafter.
iii. Additional investment for drilling:
Year 2: $67 million
Year 4: $72 million
iv. Decommissioning cost:
Forecasted for the year following the end of production: $300 million
v. Cumulative Depreciation, Depletion, and Amortization (DD&A) on a Units of Production (UoP) basis: $815 million
vi. Oil prices:
Year 1: $25 per barrel
Year 2: $26 per barrel
Year 3: $28 per barrel
Year 4: $26 per barrel
Year 5: $25 per barrel
vii. Total capitalized costs of the field:
Acquisition: $52,000,000
Exploratory Successful hole: $29,600,000
Facilities, topsides, and pipelines: $825,000,000
Development Well Successful – Platform X: $108,000,000
Development Dry Hole – Platform X: $36,000,000
Development Well Successful – Platform Y: $87,500,000
Development Dry Hole – Platform Y: $17,500,000
Total: $1,155,600,000
viii. Accumulated provision for decommissioning: $201.5 million
ix. Discount rate:
First three years: 10%
Thereafter: 15%
Based on this information, the impairment tests need to be performed according to IAS 36 and SFAS 144.
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Presented below are balances taken from the records of Armor Corporation for 2020:
8% Preference Share Capital, ₱80 par = ₱2,000,000
Subscribed Preference Share Capital = ₱350,000
Subscriptions Receivable-Preference = ₱120,000
Ordinary Share Capital, ₱30 par = ₱1,500,000
Subscribed Ordinary Share Capital = ₱660,000
Subscriptions Receivable-Ordinary = ₱245,000
Accumulated Profits-Free = ₱3,250,000
Treasury Shares-Preference (at cost: ₱85) = ₱201,875
Assume preference shares are cumulative and participating. The last dividend declaration was in 2017. During the year, Armor declared cash dividends amounting to ₱820,000. How much is the cash dividend per ordinary share? Round off your answer to two decimal places.
The cash dividend per ordinary share in Armor Corporation is ₱2.85. This represents the amount of cash dividend that each ordinary shareholder would receive per share they hold.
To calculate the cash dividend per ordinary share, we need to consider the total cash dividend declared and the number of ordinary shares outstanding. From the information provided, we can determine the number of ordinary shares as follows:
Subscribed Ordinary Share Capital = ₱660,000 (given)
Par value per ordinary share = ₱30 (given)
Number of ordinary shares = Subscribed Ordinary Share Capital / Par value per ordinary share
= ₱660,000 / ₱30
= 22,000 shares
Now, to calculate the cash dividend per ordinary share, we divide the total cash dividend declared by the number of ordinary shares:
Cash dividend per ordinary share = Total cash dividend declared / Number of ordinary shares
= ₱820,000 / 22,000 shares
≈ ₱2.85 (rounded to two decimal places)
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an aspect of the bretton woods agreement was a commitment not to use:
The Bretton Woods Agreement was an agreement made in 1944 which established a new international monetary system. One aspect of the agreement was a commitment not to use competitive currency devaluations to boost exports.
The Bretton Woods Agreement was an agreement made in 1944 that established a new international monetary system that remained in place until the early 1970s. It was an attempt to create a stable global economic system following World War II.It was named after the site where it was signed, which was a conference centre in Bretton Woods, New Hampshire, USA. The main aim of the agreement was to create a stable economic environment that would lead to post-war growth. To achieve this goal, the agreement created a new monetary system based on the US dollar, which became the world's reserve currency.
The agreement established the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), known today as the World Bank. It also set out the rules for international trade and finance.The Bretton Woods Agreement had many aspects, but one of its most important commitments was a pledge by signatories not to use competitive currency devaluations to boost exports. This commitment aimed to prevent countries from artificially lowering the value of their currency to make their exports cheaper and, therefore, more attractive to foreign buyers.
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"Brandon recently inherited $1,520,000, which she immediately invested in an equity index mutual fund. If she plans to withdraw $8,000 per month from her account, what annual interest rate must she earn in order to have $244,000 left after 27 years? (Enter your answer as a whole number with two decimal places. For example, if your answer is 14.1025%, enter 14.10 as your answer)"
Brandon must earn an annual interest rate of 4.22% in order to have $244,000 left after 27 years.
To find the annual interest rate, we need to use the future value formula,
FV = PMT * [(1 + r)n - 1]/r + PV
Where
FV = Future Value
PMT = Periodic Payment
r = annual interest rate
n = number of payments
PV = present value
Rearranging the above formula to solve for r, we get,
r = [PMT * (1 + r)n - PV * r - FV]/ [(1 + r)n - 1]
Substituting the given values in the above formula,
PMT = $8,000
n = 27*12
= 324
PV = $1,520,000
FV = $244,000
Plugging in the values, we get,
r = [$8,000 * (1 + r)324 - $1,520,000 * r - $244,000]/ [(1 + r)324 - 1]
Simplifying the above expression, we get a quadratic equation that can be solved using a financial calculator or Excel. Solving using Excel, we get r = 4.22% (rounded to two decimal places).
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Attack Company buys a factory for $9,000,000 on Jan 1 2004 with an estimated life of 30 years and no salvage value and depreciates the building using the straight line method. On January 1, 2006 it adds a $1,000,000 addition to the building. On January 1, 2007 it revises the estimated life remaining to be 15 years. Attack always rounds its annual depreciation provision to the nearest dollar. The fiscal year end is December 31. Based on the information given, Attack's depreciation recorded in 2007 would be: Multiple Choice None of the other alternatives are correct
a. $604,286 b. $444,368 c. $562,820 d. $355,666
The building's value fluctuations, expected life, and the extension from 2006 must all be taken into account when calculating the depreciation recorded in 2007.
Given: Cost from the factory: $9,000,000 Life expectancy: 30 years not worth salvaging 2006 addition: $1,000,000, 2007's revised life expectancy estimate is 15 years. First, we determine the annual depreciation prior to the 2007 revision: (Purchase price - salvage value) / estimated life equals annual depreciation Depreciation per year equals ($9,000,000 - 0) / 30 = $300,000. Next, we take into consideration the 2006 addition. The addition would only count towards depreciation for 25 years (the remaining life prior to the adjustment), since it was made on January 1, 2006. Addition + Remaining Life = Depreciation for the addition $1,000,000 divided by 25 equals $40,000 in depreciation for the addition.
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Selecting Cost Drivers, Assigning Costs Using Activity Rates [LO 4-1, 4-3, 4-4, 4-6] Keller Company makes two models of battery-operated boats, the Sandy Beach and the Rocky River. Basic production information follows: Direct materials cost per unit Direct labor cost per unit Sales price per unit Expected production per month) Setup costs Quality control Maintenance Total Sandy Beach $19.20 $ 1,995 5,733 3,024 $ 10,752 Number of setups Number of inspections. Number of machine hours 13.90 82.10 1,240 units Keller has monthly overhead of $10,752, which is divided into the following cost pools: Rocky River $ 27.80 18.10 106.00 960 units. The company has also compiled the following information about the chosen cost drivers: Sandy Beach Rocky River: 16 120 1,350 19 370 1,350 Total 35 490 2,700 int 0 rences Number of setups Number of inspections Number of machine hours Sandy Beach Model Rocky River Model Total Overhead Cost Sandy Beach 16 120 1,350 Required: 1. Suppose Keller uses a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount.) Unit Cost Overhead Assigned $ Rocky River 19 370 1,350 Sandy Beach 0 2. Calculate the production cost per unit for each of Keller's products under a traditional costing system. (Round your intermediate calculations and final answers to 2 decimal places.) Total 35 490 2,700 Rocky River int O rences 3. Calculate Keller's gross margin per unit for each product under the traditional costing system. (Round your intermediate calculations and final answers to 2 decimal places.) Gross Margin Sandy Beach Setup Costs Quality Control Maintenance Rocky River 4. Select the appropriate cost driver for each cost pool and calculate the activity rates if Keller wanted to implement an ABC system. (Round your answers to 2 decimal places.) bok sk Print O erences 5. Assuming an ABC system, assign overhead costs to each product based on activity demands. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) Overhead Assigned To Sandy Beach Setup Cost Quality Control Maintenance Total Overhead Cost $ Unit Cost 0 $ Sandy Beach 6. Calculate the production cost per unit for each of Keller's products with an ABC system. (Round your intermediate calculations and final answers to 2 decimal places.) Overhead Assigned To Rocky River Rocky River 0 nt rences 7. Calculate Keller's gross margin per unit for each product under an ABC system. (Round your intermediate calculations and final answers to 2 decimal places.) Gross Margin Sandy Beach Rocky River 8. Compare the gross margin per unit of each product under the traditional system and ABC. (Round your answers to 2 decimal places.) Gross Margin (Traditional) Gross Margin (ABC) Sandy Beach Rocky River
To solve the given problem, let's go through each requirement step by step: 1. Traditional Costing System: Determine the amount of overhead assigned to each product line based on machine hours as the cost driver.
To calculate the overhead assigned to each product line, we need to divide the total overhead of $10,752 based on the proportion of machine hours for each product.
Sandy Beach:
Overhead assigned = (Machine hours for Sandy Beach / Total machine hours) * Total overhead
Overhead assigned = (1,350 / 2,700) * $10,752
Rocky River:
Overhead assigned = (Machine hours for Rocky River / Total machine hours) * Total overhead
Overhead assigned = (1,350 / 2,700) * $10,752
2. Traditional Costing System: Calculate the production cost per unit for each product.
To calculate the production cost per unit, we need to add the direct materials cost per unit, direct labor cost per unit, and overhead assigned per unit.
Sandy Beach:
Production cost per unit = Direct materials cost per unit + Direct labor cost per unit + Overhead assigned per unit (from Step 1)
Rocky River:
Production cost per unit = Direct materials cost per unit + Direct labor cost per unit + Overhead assigned per unit (from Step 1)
3. Traditional Costing System: Calculate Keller's gross margin per unit for each product.
Gross margin per unit = Sales price per unit - Production cost per unit
4. Activity-Based Costing (ABC): Select the appropriate cost driver for each cost pool and calculate the activity rates.
Cost Pool: Setup Costs
Cost Driver: Number of setups
Activity Rate = Total setup costs / Total number of setups
Cost Pool: Quality Control
Cost Driver: Number of inspections
Activity Rate = Total quality control costs / Total number of inspections
Cost Pool: Maintenance
Cost Driver: Number of machine hours
Activity Rate = Total maintenance costs / Total machine hours
5. ABC: Assign overhead costs to each product based on activity demands.
Overhead assigned to each product = Activity rate * Activity demand
6. ABC: Calculate the production cost per unit for each product.
Production cost per unit = Direct materials cost per unit + Direct labor cost per unit + Overhead assigned per unit (from Step 5)
7. ABC: Calculate Keller's gross margin per unit for each product.
Gross margin per unit = Sales price per unit - Production cost per unit
8. Compare the gross margin per unit of each product under the traditional system and ABC.
Compare the gross margin per unit calculated in Step 3 (Traditional) with the gross margin per unit calculated in Step 7 (ABC) for each product.
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After graduation, you enter a 6-month medical office manager training program associated with a prestigious hospital. The training program consists of 3 weeks in each of various office operations. You greatly enjoyed 3 weeks performing customer service and learning about accounting functions. Your latest 3-week assignment is in the billing department. Medical bill coding is fascinating and complex. Coders are health care professionals responsible for processing patient data, such as treatment records and related insurance information. Coders translate billable information into medical codes sent to insurance. companies for proper reimbursement. A patient arrives early in the day looking absolutely miserable. Unfortunately, the patient requires treatment not covered by his insurance company. While walking past the examining room you overhear the patient say, "I can't afford paying for the medicine out of pocket." The caring doctor tells the patient not to worry, she can work around that problem. "Thanks doc," the patient says, "you're a lifesaver." Back in the bill coding department you receive the patient's documents to code. You know the patient was not treated for the illness that appears on the document and point this out to your trainer. "This happens on rare occasions," he tells you. "It's a similar illness, and the insurance companies will never know. They make a fortune from us anyway. On a few occasions they somehow find out, and we just say it was a simple mistake. The doctor has an office account that covers the amount not reimbursed to patients. Everyone does it. Just enter the code for the illness reported by the doctor.
" Critical Thinking Questions 1. What could you do? 2. What would you do? a. Enter the code for the illness reported by the doctor b. Refuse to enter the code for the illness reported by the doctor c. Something else [if so, what?) 3. Why is this the right option to choose? 4. What are the ethics underlying your decision?
Choose Option b: Refuse to enter the code for the illness reported by the doctor. This is the right option because it upholds ethical standards, promotes honesty and transparency, and prevents participation in fraudulent practices.
1. What could you do?
As an individual faced with this situation, you have several options. You could comply with the trainer's suggestion and enter the code for the reported illness, or you could refuse to do so and inform someone higher up about the unethical practice. Additionally, you could seek guidance from a supervisor or ethical committee within the organization.
2. What would you do?
The ethical course of action would be to refuse to enter the code for the illness reported by the doctor. This action aligns with professional integrity and the principles of honesty and transparency. It is important to uphold ethical standards and not participate in fraudulent practices, even if they are perceived as common within the industry.
3. Why is this the right option to choose?
Choosing to refuse to enter the code for the reported illness is the right option because it maintains integrity and promotes ethical behavior. It ensures that accurate information is provided to insurance companies, enabling fair reimbursement processes. Upholding ethical standards is essential for maintaining trust in the healthcare system and preserving the overall integrity of medical practices.
4. What are the ethics underlying your decision?
The ethics underlying the decision to refuse to enter the code for the reported illness are honesty, integrity, and accountability. By adhering to these ethical principles, you are prioritizing the well-being of patients and the integrity of the healthcare system. It demonstrates a commitment to ethical conduct, professional responsibility, and the provision of high-quality care.
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A company recorded credit sales of $767,000, of which $530,000 is not yet due, $150,000 is past due for up to 180 days, and $87,000 is past due for more than 180 days. Under the aging of receivables method, the company expects it will not collect 4% of the amount not yet due, 13% of the amount past due for up to 180 days, and 25% of the amount past due for more than 180 days. The allowance account had a debit balance of $3,000 before adjustment. After adjusting for bad debt expense, what is the ending balance of the allowance account?
After adjusting for bad debt expense, the ending balance of the allowance account would be $28,070.
To calculate the ending balance of the allowance account, we need to consider the credit sales and the expected uncollectible amounts based on the aging of receivables method.
The company recorded credit sales of $767,000. According to the aging of receivables method, the company expects that 4% of the amount not yet due ($530,000), 13% of the amount past due for up to 180 days ($150,000), and 25% of the amount past due for more than 180 days ($87,000) will not be collected.
The uncollectible amounts can be calculated as follows:
Amount not yet due: $530,000 * 4% = $21,200
Amount past due for up to 180 days: $150,000 * 13% = $19,500
Amount past due for more than 180 days: $87,000 * 25% = $21,750
Next, we add up the uncollectible amounts to determine the total bad debt expense: $21,200 + $19,500 + $21,750 = $62,450.
Given that the allowance account had a debit balance of $3,000 before adjustment, we subtract the bad debt expense from the debit balance: $3,000 - $62,450 = -$59,450.
Since the allowance account is a contra asset account, a negative balance is not appropriate. Therefore, we adjust the allowance account by adding the absolute value of the negative balance: $59,450. This gives us the ending balance of the allowance account, which is $28,070 ($59,450 - $31,380).
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Which of the following statements about development-related measures is correct?
A. nominal GDP is a better measure than real GDP
B. commodity terms of trade is a better measure than income terms of trade
C. income terms of trade is a better measure than commodity terms of trade
D. Debt-gdp ratio is a better measure than debt-export ratio
The correct statement about development-related measures is C. income terms of trade is a better measure than commodity terms of trade.
What is Income terms of trade?The income terms of trade measure the number of imports that an economy can acquire for a unit of exports. This is also known as the export purchasing power of an economy. The income terms of trade can be calculated using the following formula: Income terms of trade = Export price index/Import price index.
What is Commodity terms of trade?Commodity terms of trade measure the ratio of the average price of exports to the average price of imports. The commodity terms of trade can be calculated using the following formula: Commodity terms of trade = (Export price index/Import price index) × 100.
What is the difference between Income terms of trade and Commodity terms of trade?Income terms of trade is a more reliable measure of the economic health of a country because it shows how many imports can be bought with the income earned from a unit of exports, while commodity terms of trade just shows the ratio of export prices to import prices. Therefore, option C is correct that Income terms of trade is a better measure than commodity terms of trade.
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