Answer:
Variance of risky portfolio P = 4.61%
Explanation:
WA = Weight of stock A = 43%, or 0.43
WB = Weight of stock B = 1 - 0.43 = 0.57
SA = Standard deviation of stock A = 23%, or 0.23
SB = Standard deviation of stock B = 33%, or 0.33
Cab = Correlation of Stock A and Stock B = 0.05
Therefore, we have:
Variance of risky portfolio P = (WA^2 * SA^2) + (WB^2 * SB^2) + (WA * SA * WB * SB * Cab) = (0.43^2 * 0.23^2) + (0.57^2 * 0.33^2) + (0.43 * 0.23 * 0.57 * 0.33 * 0.05) = 0.0461, or 4.61%
There are a handful of common mistakes people make when trying to
separate skill from chance. Which of the following is not one of those mistakes?
a. Hindsight bias
b. Outcome bias
c. Loss aversion
d. Narrative seeking
Answer:
c. Loss aversion
Explanation:
Loss aversion is a cognitive bias that explains where there is the pain for losing should be twice as equivalent to the gaining pleasure. It is the tendency of an individual to avoid the losses that purchase the equivalent gains. And, the term that not done the given mistake is the loss aversion
So as per the given situation, the option c is correct
The Gear Division makes a part with the following characteristics:
Production capacity 25,000 units
Selling price to outside customers $ 18
Variable cost per unit $ 11
Fixed cost, total $ 100,000
Motor Division of the same company would like to purchase 10,000 units each period from the Gear Division. The Motor Division now purchases the part from an outside supplier at a price of $17 each. Suppose that the Gear Division is operating at capacity and can sell all of its output to outside customers. If the Gear Division sells the parts to Motor Division at $17 per unit, the company as a whole will be:
a. better off by $10,000 each period.
b. worse off by $20,000 each period.
c. worse off by $10,000 each period.
d. There will be no change in the status of the company as a whole.
Answer:
Effect on income= -10,000
Explanation:
Giving the following information:
Production capacity 25,000 units
Selling price to outside customers $ 18
Variable cost per unit $ 11
Fixed cost, total $ 100,000
First, we need to calculate the unitary total production cost:
Total unitary cost= (100,000/25,000) + 11
Total unitary cost= $15
The company can sell all of its production to outside customers and gain $3 from the sale. But, by selling to the Motor Division, it gains $2.
Now, the effect on income:
Effect on income= increase in income by not buying the part - decrease in sales revenue for not selling to outside customers
Effect on income= 10,000*2 - 10,000*3
Effect on income= 20,000 - 30,000
Effect on income= -10,000
Splish Brothers Inc. uses a perpetual inventory system. Data for product E2-D2 include the following purchases.
Date Number of Units Unit Price
May 7 105 $7
July 28 63 18
On June 1, Splish Brothers sold 55 units, and on August 27, 84 more units. Prepare the perpetual inventory schedule for the above transactions using moving average cost.
Answer:
Splish Brothers Inc.
Perpetual Inventory Schedule using moving average costs:
Date Description Number Average Cost Total Cost Cost
of Units Balance
May 7 Purchase 105 $7 $735 $735
June 1 Sales (55) $7 385 350
July 28 Purchase 63 $18 1,134 1,484
August 27 Sales (84) $13.1327 1,103 381
Explanation:
a) Data and Calculations:
Date Number of Units Unit Price Total Costs
May 7 Purchase 105 $7 $735
June 1 Sales (55) $7 385
July 28 Purchase 63 $18 1,134
August 27 Sales (84) $13.1327 1,103
Cost of goods sold = $1,488 ($385 + $1,103)
Ending inventory = $381
Black Company's unadjusted and adjusted trial balances on December 31 of the current year are as follows
Answer:
wdym
Explanation:
A monopolist, unlike a competitive firm, has some market power. It can raise its price, within limits, without the quantity demanded falling to zero. The main way it retains its market power is through barriers to entry—that is, other companies cannot enter the market to create competition in that particular industry.Complete the following table by indicating which barrier to entry appropriately explains why a monopoly exists in each scenario.ScenarioBarriers to EntryExclusive Ownership of a Key ResourceGovernment-Created MonopoliesEconomies of ScaleThe Aluminum Company of America (Alcoa) formerly controlled all U.S. sources of bauxite, a key component in the production of aluminum. Given that Alcoa did not sell bauxite to any other companies, Alcoa was a monopolist in the U.S. aluminum industry from the late-nineteenth century until the 1940s. Patents are granted to inventors of a product or process for a certain number of years. The reason for this is to encourage innovation in the economy. Without the existence of patents, it is argued that research and development for improved pharmaceutical products is unlikely to take place, since there's nothing preventing another firm from stealing the idea, copying the product, and producing it without incurring the development costs. In the natural gas industry, low average total costs are obtained only through large-scale production. In other words, the initial cost of setting up all the necessary pipes and hoses makes it risky and, most likely, unprofitable for competitors to enter the market.
Answer:
Monopolist's Market Power and Barriers to Entry
Scenario 1
The Aluminum Company of America (Alcoa) formerly controlled all U.S. sources of bauxite, a key component in the production of aluminum. Given that Alcoa did not sell bauxite to any other companies, Alcoa was a monopolist in the U.S. aluminum industry from the late-nineteenth century until the 1940s.
Barrier to Entry:
Exclusive Ownership of a Key Resource
Scenario 2
Patents are granted to inventors of a product or process for a certain number of years. The reason for this is to encourage innovation in the economy. Without the existence of patents, it is argued that research and development for improved pharmaceutical products is unlikely to take place, since there's nothing preventing another firm from stealing the idea, copying the product, and producing it without incurring the development costs.
Barrier to Entry:
Government-Created Monopolies
Scenario 3:
In the natural gas industry, low average total costs are obtained only through large-scale production. In other words, the initial cost of setting up all the necessary pipes and hoses makes it risky and, most likely, unprofitable for competitors to enter the market.
Barrier to Entry:
Economies of Scale
Explanation:
Exclusive Ownership of a Key Resource: It has been argued that monopolies do not arise from exclusive ownership of a key resource. However, having exclusive ownership grants an entity a kind of natural monopoly.
Government-Created Monopolies: Governments create monopolies by protecting intellectual property and issuing patents and copyrights, which give the holders exclusive rights to produce some products or render some services for a period of time. The purpose is to encourage innovation and industrialization.
Economies of Scale: When a company is able to produce goods in large quantity, this reduces the average cost per unit, increases efficiency, and economies of scale are achieved because the costs of production are spread over larger units.
At an activity level of 9,300 machine-hours in a month, Curt Corporation's total variable production engineering cost is $766,320 and its total fixed production engineering cost is $191,040. What would be the total production engineering cost per machine-hour, both fixed and variable, at an activity level of 9,600 machine-hours in a month
Answer:
$102.3 per machine hour
Explanation:
We can compute the total production engineering cost per hour by using the following equation;
Cost per machine hour = (Fixed cost + Variable cost) / Total machine hours
But first, we need to calculate variable cost at 9,600 hours;
= $766,320 × 9,600hr / 9,300hr
= $791,040
Now, cost per machine hour
= $191,040 + $791,040 / 9,600hr
= $982,040 / 9,600hr
= $102.3 per machine hour
Gabbe Industries is a division of a major corporation. Last year the division had total sales of $32,948,550, net operating income of $4,069,146, and average operating assets of $9,027,000. The company's minimum required rate of return is 22%.
Required:
a. What is the division's margin? (Round your percentage answer to 2 decimal places.)
b. What is the division's turnover? (Round your answer to 2 decimal places.)
c. What is the division's return on investment (ROI)? (Round percentage your answer to 2 decimal places.)
Answer:
a. Division's margin = Net operating income / Total sales
Division's margin = $4,069,146 / $32,948,550
Division's margin = 0.1235000
Division's margin = 12.35%
b. Division's turnover = Total sales / Average operating assets
Division's turnover = $32,948,550 / $9,027,000
Division's turnover = 3.65 times
c. Division's return on investment = Division margin * Division turnover
Division's return on investment = 12.35% * 3.65 times
Division's return on investment = 45.08%
Do you think the licensing process for international medical graduates is an unnecessary hurdle meant to shield U.S. doctors from foreign competition?
Answer:
No licensing is right. Doctors in U.S. are spending more on medical studies than any other country. It is necessary for other country medical students to gain license in order to do practice in the country.
Explanation:
In U.S. doctors are in deficiency so the country cannot completely cease employment for foreign doctors. The country needs to welcome foreign doctors but it is also necessary to safeguard home doctors. If U.S. will not safeguard rights of home country doctors then they will be demotivated and will not be patriotic for the country.
The board of directors of Synergie Incorporation discussed a few goals for the new fiscal year. The chief goals included maximizing total sales revenue and improving the overall market position of the firm. These goals are categorized as:
Answer: offensive
Explanation:
Offensive goals are the goals that maximize sales revenue, increase long term growth and profit, improve market position and take advantage of economics of scale.
Since the chief goals included maximizing total sales revenue and the improvement of the overall market position of the firm, then these goals are categorized as offensive goals.
A second-year MBA student, takes three hours off one evening and uses his car to go to a movie with a friend. A ticket to the movie costs Josh $5, gasoline for the trip costs $1, and Josh passed up tutoring a student that night at $10 an hour. He could also have used the three hours to work as a grader for a professor at $15 an hour. What is Joshâs economic cost of going to the movie?
Answer:
$-39
Explanation:
Economic cost is implicit cost less accounting cost
Implicit cost or opportunity cost : implicit cost is the cost of the next best option forgone when one alternative is chosen over other alternatives. It is used in calculating economic profit
There are two opportunities the student forgoes when he decides to go to the movies. They are, the amount he would have earned if he tutored the student which has a value of $10 / hour and the amount he would have earned working as a grader which is $15 / hour.
The next best option is $15 / hour because it has a higher value
total economic cost = 15 x 3 = 45
the cost of the ticket and the cost of gasoline are explicit costs
Explicit cost includes the amount expended in going to the cinema
6 - 45 = -39
Davis Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 400 units. The costs and percentage completion of these units in beginning inventory were: Cost Percent Complete Material costs 7,500 75% Conversion costs 4,999 45% A total of 5,400 units were started and 4,700 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: Materials costs $112,900 Conversion costs $93,900 The ending inventory was 85% complete with respect to materials and 30% complete with respect to conversion costs. The cost per equivalent unit for materials for the month in the first processing department is closest to:__________.
a. $21.37
b. $19.47
c. $20.04
d. $20.76
Answer:
The answer is "21.37'
Explanation:
Please find the solution in the attached file.
Jammer Company uses a weighted average perpetual inventory system and reports the following:
August 2 Purchase 24 units at $18.50 per unit. August 18 Purchase 26 units at $20.00 per unit. August 29 Sale 48 units. August 31 Purchase 29 units at $21.50 per unit.
What is the per-unit value of ending inventory on August 31? (Round your per unit answers to 2 decimal places.)
Answer: $21.36
Explanation:
Weighted average inventory system works by taking the average of the inventory prices on the different days.
Price on August 29 which is date of sale:
= {(Units purchased on August 2 * Unit cost on August 2) + ( Units purchased on August 18 * Unit cost on August 18)] / (Units purchased on August 2 + Units purchased on August 18)
= [ ( 24 * 18.50) + (26 * 20) ] / (24 + 26)
= $19.28 per unit
48 units were sold so the number of units left are:
= 24 + 26 - 48
= 2 units
Price on August 31
= [ (Units remaining on August 29 * Unit cost on August 29) + ( Units purchased on August 31 * Unit cost on August 31)] / (Units remaining on August 29 + Units purchased on August 31)
= [ (2 * 19.28) + (29 * 21.50) ] / ( 2 + 29)
= $21.36
Companies can use a spreadsheet to complete the statement of cash flows. Each item that follows is recorded in the transaction analysis columns of the spreadsheet.
Net income
Increases in current assets (other than Cash)
Decreases in current liabilities
Cash payment for the acquisition of plant assets
Cash receipt from the issuance of common stock
Depreciation expense
Identify each as being recorded by a Debit or Credit in the statement of cash flows section of the spreadsheet.
Answer and Explanation:
The categorization is as follows:
a. Debit, positive adjustment
b. Credit, negative adjustment
c. Credit, negative adjustment
d. Credit, negative adjustment
e. Debit, positive adjustment
f. Debit, positive adjustment
In this way the transactions should be categorized with respect to the statement of cash flows section
Hence, the same is to be relevant
9. Suppose Betty saves $200 each month in her 401(k) account. How much less will her monthly take-home pay be than if she saved nothing? (Assume a combined 20% state and federal income tax rate.)
Answer:
$160
Explanation:
The way 401(k) savings work is that employees can save from their earnings before tax is deducted, which means that on the $200 saved no tax is deducted, hence, the take of the employee reduces by $200
When there are savings, a tax of 20% would have been deducted from the $200, as a result, the employee would be left with $160($200-($200*20%)), which means that take-home would reduce by $40, the amount tax deducted.
The reduction in take-home=$200-$40
The reduction in take-home=$160
Calculating the Cost of Equity. Suppose stock in Lululemon Corporation has a beta of 0.80. The market risk premium is 10 percent and the risk-free rate is 2 percent. What is Lululemon's cost of equity capital?
Calculating the WACC. In addition to the information in the previous problem, suppose Boone has a target debt-equity ratio of 50 percent. Its cost of debt is 8 percent, before taxes. If the tax rate is 34 percent, what is the WACC?
Answer:
Cost of equity capital can be found by the Capital asset pricing model:
Cost of capital
= Risk free rate + beta * market premium
= 2% + 0.8 * 10%
= 10%
Weighted Average Cost of Capital:
= (weight of debt * after tax cost of debt) + (weight of stock * cost of stock)
= (50% * 8% * ( 1 - 34%)) + (50% * 10%)
= 10.28%
If the keyword an advertiser is bidding on is used in the ad and on the landing page, then the advertiser will receive a higher Quality Score for Group of answer choices higher expected CTR more positive landing page experiences by searchers lower bounce rate ad relevance
Answer:
If the keyword an advertiser is bidding on is used in the ad and on the landing page, then the advertiser will receive a higher Quality Score for
ad relevance.
Explanation:
Ad relevance is a component that gives an advertiser higher quality score. It is an indication that the keyword is optimized to meet the customer's search query. It shows how closely the ad matches the customer's search because a correlation exists between the keyword, the ad, and the post-click landing page. It is paramount to achieve ad relevance in any pay-per-click advertising (PPC), otherwise called search engine marketing (SEM) or search advertising, to justify the ad costs.
All standard costing methods use the predetermined overhead rate to apply factory overhead. This is based on an estimated amount that is calculated during the budgeting process at the beginning of the year. Therefore, there will almost always be a variance between the factory overhead that is applied and the actual factory overhead that is accumulated. These variances should be a minimal amount, but may sometimes be material. Therefore, it is important that an accountant find the cause of the variance, so as not to repeat it. Determining the reasons for variances is an important part of the overall process of variance analysis. Certain causes are commonly attributed to specific variances. Match each reason on the left with the variance(s) it commonly creates. Each numbered item has one or more correct answer(s). Each lettered item may be used once, more than once, or not at all.
1. A change in the quality of materials purchased
2. A new supplier contract
3. Error in the accounting records
4. Change in proportion of spoiled materials
5. Unreasonable standard
6. Unanticipated overtime hours
7. A change in the government-mandated minimum wage
8. Equipment malfunction
9. A change in average worker experience or training
A. Direct materials price variance
B. Direct materials quantity variance
C. Direct labor rate variance
D. Direct labor efficiency
Answer:
1. A change in the quality of materials purchased
Variance: Direct materials quantity variance
2. A new supplier contract
Variance: Direct materials price variance
3. Error in the accounting records
Variance: Direct materials price variance
4. Change in proportion of spoiled materials
Variance: Direct materials quantity variance
5. Unreasonable standard
Variance: Direct labor efficiency
6. Unanticipated overtime hours
Variance: Direct labor rate variance
7. A change in the government-mandated minimum wage
Variance: Direct labor rate variance
8. Equipment malfunction
Variance: Direct labor efficiency
9. A change in average worker experience or training
Variance: Direct labor efficiency
MC Qu. 98 At the beginning of the recent... At the beginning of the recent period, there were 1,470 units of product in a department, 35% completed. These units were finished and an additional 6,900 units were started and completed during the period. 1,560 units were still in process at the end of the period, 25% completed. Using the weighted average method, the equivalent units produced by the department were:
Answer:
Using the weighted average method, the equivalent units produced by the department were:
= 8,760 units.
Explanation:
a) Data and Calculations:
Units Conversion
Ending inventory 1,560
Units completed 8,370
Units available 9,930
Beginning inventory 1,470 35%
Additional units started 8,460
Equivalent units of production:
Units completed 8,370 8,370 (100%)
Ending inventory 1,560 390 (25%)
Equivalent units of production 8,760
Wagner Assets Management Group holds 3 stocks in their investment portfolio. The amount of the investment and beta of each stock is listed below.
Stock Investment Beta
A $ 200,000 1.50
B 300,000 ??
C 500,000 1.20
If the beta of the portfolio is 0.75, what is the beta of stock B?
Answer:
-0.5
Explanation:
Stock Investment (W) Beta (B) W*B
A 200,000 1.50 300,000
B 300,000 X 300,000X
C 500,000 1.20 600,00
1,000,000 900,000+300,000X
Using the formula of Beta of Portfolio to find out X
0.75 = 900,000 + 300,000X / 1,000,000
0.75 * 1,000,000 = 900,000 + 300,000X
750,000 = 900,000 + 300,000X
750,000 - 900,000 = 300,000X
-150,000 = 300,000X
X = -150,000 / 300,000
X = -0.5
So, the beta of stock B is -0.5.
Senator A agrees to vote for Senator K's state project in exchange for Senator K voting for Senator A's state project. This is an example of Group of answer choices logrolling. the median voter model. the paradox of voting. the principal-agent problem.
Answer: logrolling
Explanation:
Logrolling simply refers to the exchange of favors specifically. It is the practice of exchanging assistance which is fine usually in politics when each other's proposed legislation is voted for.
Since Senator A agrees to vote for Senator K's state project in exchange for Senator K voting for Senator A's state project, this is logrolling.
Renaldo Cross Company views share buybacks as treasury stock. Renaldo repurchased shares and then later sold the shares at more than their acquisition price. What is the effect of the sale of the treasury stock on each of the following?
Retained earnings Total paid-in capital
a. no effect increase
b. no effect no effect
c. increase no effect
d. increase increase
a) Option A
b) Option B
c) Option C
d) Option D
Answer: a) Option A
Explanation:
There will be no effect on retained earnings because retained earnings do not increase as a result of shares being sold. It increases when net income increases.
Total paid-in capital increases when stock is sold for higher than its par value or when treasury stock is sold for higher than its acquisition price. The treasury stock here was sold for higher than it was bought so this would increase the total paid in capital.
A shortcoming of real gross domestic product (GDP) is it does not include the underground economy. includes nonmarket goods. does not measure changes in employment. does not include the value obtained through purchases of stocks and bonds. does not account for changes in the prices of goods and services.
Answer:
it does not include the underground economy.
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
Nominal GDP is GDP calculated using current year prices while Real GDP is GDP calculated using base year prices. Real GDP has been adjusted for inflation.
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
Items not included in the calculation off GDP includes:
1. services not rendered to oneself
2. Activities not reported to the government
3. illegal activities
4. sale or purchase of used products
5. sale or purchase of intermediate products
The Central Division of National Inc. has operating income of $16,000 on sales revenue of $155,000. Divisional operating assets are $84,600, and management of National has determined that a minimum return of 12% should be expected from all investments.
Required:
a. Using the DuPont model, calculate The Central Division’s margin, turnover, and ROI.
b. Calculate The Central Division's residual income.
Answer:
.
Explanation:
Assume that the current price of a stock is $100. A call option on that stock with an exercise price of $97 costs $7. A call option on the stock with the same expiration and an exercise price of $103 costs $3. Using these options what is the expiration profit of a bear call spread if the stock price is equal to $110
Answer:
-2
Explanation:
Cape Corp. will pay a dividend of $3.00 next year. The company has stated that it will maintain a constant growth rate of 4.5 percent a year forever.
a. If you want a return of 15 percent, how much will you pay for the stock?
b. If you want a return of 8 percent, how much will you pay for the stock?
Answer:
a.
$27.27
b.
$75
Explanation:
Use the following formula to calculate the value of the stock
Value of Stock = Expected Dividend / ( Rate of return - Growth rate )
a.
Where
Expected Dividend = $3.00
Rate of return = 15%
Growth rate = 4.5%
Placing values in the formula
Value of Stock = $3.00 / ( 15% - 4% )
Value of Stock = $3 / 11%
Value of Stock = $27.27
b.
Where
Expected Dividend = $3.00
Rate of return = 8%
Growth rate = 4.5%
Placing values in the formula
Value of Stock = $3.00 / ( 8% - 4% )
Value of Stock = $3 / 4%
Value of Stock = $75
Global Tek plans on increasing its annual dividend by 15 percent a year for the next four years and then decreasing the growth rate to 2.5 percent per year. The company just paid its annual dividend in the amount of $.20 per share. What is the current value of one share of this stock if the required rate of return is 17.4 percent
Answer:
2.02
Explanation:
year 1 dividend = 0.2 x 1.15 = 0.23
year 2 dividend = 0.2 x (1.15^2)= 0.26
year 3 dividend = 0.2 x (1.15^3) = 0.30
year 4 dividend = 0.2 x (1.15^4) = 0.35
divdend value in the second stage
0.35 x 1.025 / (0.174 - 0.025) = 2.41
Determine the present value of the cash flows
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
year 1 dividend = 0.2 x 1.15 = 0.23
year 2 dividend = 0.2 x (1.15^2)= 0.26
year 3 dividend = 0.2 x (1.15^3) = 0.30
year 4 dividend = 0.2 x (1.15^4) = 0.35 + 2.41
i = 17.4
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
During 2020, Morefield Building Company constructed various assets at a total cost of $14,700,000. The weighted average accumulated expenditures on assets qualifying for capitalization of interest during 2020 were $10,700,000. The company had the following debt outstanding at December 31, 2020:
1. 10%, 5-year note to finance construction of various assets, dated January 1,
2020, with interest payable annually on January 1 $6,300,000
2. 12%, ten-year bonds issued at par on December 31, 2014, with interest payable
annually on December 31 7,000,000
3. 9%, 3-year note payable, dated January 1, 2019, with interest payable annually
on January 1 3,500,000
Instructions:
Compute the amounts of each of the following (show computations).
1. Avoidable interest.
2. Total interest to be capitalized during 2020.
Answer:
1. $1,015,000
2. $1,015,000
Explanation:
1. Computation for the Avoidable interest.
First step is to Compute the weighted average interest rate:
Principal Interest
12% ten-year bonds$ 7,000,000 $840,000
9% 3-year note $3,500,000 $315,000
Total $10,500,000 $1,155,000
Weighted average interest rate = $1,155,000 ÷ $10,500,000
Weighted average interest rate= 11%
Now let compute the Avoidable Interest
Weighted Average Accumulated Expenditures *Applicable interest rate = AVOIDABLE INTEREST
$6,300,000 *.10 = $630,000
$3,500,000 *.11= $385,000
Total $9,800,000 $1,015,000
Therefore the Avoidable Interest is $1,015,000
2. Computation for Total interest to be capitalized during 2020
2020 Actual interest cost
Construction note $6,300,000 × .10 =$630,000
12% ten-year bonds, $7,000,000 × .12 =$840,000
9% three-year note, $3,500,000 × .09=$315,000
Total $1,785,000
Therefore Total interest to be capitalized during 2020 will be $1,015,000 which is the LESSER of
$1,785,000
A manufacturing company has a beginning finished goods inventory of $28,300, cost of goods manufactured of $58,500, and an ending finished goods inventory of $27,600. The cost of goods sold for this company is
Answer:
the cost of goods sold is $59,200
Explanation:
The computation of the cost of goods sold is shown below:
Cost of goods sold = Beginning finished goods inventory + cost of goods manufactured - ending finished goods inventory
= $28,300 + $58,500 - $27,600
= $59,200
Hence, the cost of goods sold is $59,200
MC Qu. 113 Kayak Company uses a job order costing... Kayak Company uses a job order costing system and allocates its overhead on the basis of direct labor costs. Kayak Company's production costs for the year were: direct labor, $35,000; direct materials, $55,000; and factory overhead applied $6,500. The overhead application rate was:
Answer:
$0.19 per direct labor hour
Explanation:
It is important to keep in mind the following :
Overhead application rate = Budgeted Overheads ÷ Budgeted Activity
also,
Applied Overheads = Overhead application rate x Actual Activity
Using the formula :
Applied Overheads = Overhead application rate x Actual Activity
hence,
Overhead application rate = Applied Overheads ÷ Actual Activity
therefore,
Overhead application rate = $6,500 ÷ $35,000
= $0.185 or $0.19 per direct labor hour
Resource X is necessary to the production of good Y. If the price of resource X falls, the equilibrium price of Y will ______________ and the equilibrium quantity of Y will ________________.
Answer:
fall
rise
Explanation:
If the cost of resource x falls, it becomes cheaper to produce good y. This leads to an increase in supply of y. the supply curve of good y shifts out. As a result, equilibrium price falls and quantity rises
