Answer: $51 million
Explanation:
Firstly, we need to calculate the required reserve which will be:
= $500 × 15%
= $500 million × 0.15
= $75 million
Then, the excess reserve will be:
= $126 million - $75 million
= $51 million
Therefore, the maximum deposit outflow it can sustain without running into reserve deficiency is $51 million.
Marty, a 16-year-old, contracted with Cream-of-the-Crop Cycles to buy an $8,000 motorcycle. He agreed to make monthly payments until the purchase price plus interest were paid in full. It is three years later and Marty has not disaffirmed the contract and has made regular payments on the cycle since turning 19. Which of the following is correct?
A) The contract is voidable by Marty.
B) The contract is void as soon as it is made.
C) The contract is voidable by Cream-of-the-Crop Cycles.
D) The contract is voidable by either Marty or Cream-of-the-Crop Cycles.
Answer:
Marty has ratified the contract and is now bound by the terms.
Explanation:
In the given case as we can see that the Marty was minor and as per the act the eligibility to enter into a contract should be in the age of 18 years or above so here the contract should be voidable but after 3 years he would be 19 years and now he would ratified the contract and now bound with the contract terms
Hence, the above represent the answer
The following statements provide some analysis of policy regarding the global financial crisis of the late 2000s. Categorize each statement as positive or normative. Statement Positive or Normative?
a. The financial crisis was caused by faulty mathematical models that encouraged excessive risk taking.
b. The lack of effective regulation contributed to a risk-seeking culture in the financial services industry.
c. Central banks should have imposed tighter regulations on banks to prevent the financial crisis.
d. Executives of banks that received financial assistance from the government should not have received bonuses.
Answer:
Positive statement
Positive statement
normative statement
normative statement
Explanation:
Positive Economics is objective and statements are usually based on facts and economic theory. They can be tested.
For example, the statement - the lack of effective regulation contributed to a risk-seeking culture in the financial services industry- can be test empirically
Normative economics is based value judgements, opinions and perspectives. For example, the statement - Central banks should have imposed tighter regulations on banks to prevent the financial crisis- is based on opinion. Everyone would have an opinion on what the Central bank should have done
Goodwin Technologies, a relatively young company, has been wildly successful but has yet to pay a dividend. An analyst forecasts that Goodwin is likely to pay its first dividend three years from now. She expects Goodwin to pay a $1.25000 dividend at that time (D₃ = $1.25000) and believes that the dividend will grow by 6.50000% for the following two years (D₄ and D₅). However, after the fifth year, she expects Goodwin’s dividend to grow at a constant rate of 3.36000% per year.
Goodwin’s required return is 11.20000%. Fill in the following chart to determine Goodwin’s horizon value at the horizon date (when constant growth begins) and the current intrinsic value. To increase the accuracy of your calculations, do not round your intermediate calculations, but round all final answers to two decimal places.
Term Value
Horizon Value __________
Current Intrinsic value __________
Assuming that the markets are in equilibrium, Goodwin's current expected dividend yield is ___________, and Goodwin's capital gains yield is _______
Answer:
A. Term Value
Horizon Value $18.69
Current Intrinsic value $13.61
B. Dividend yield 0%
Capital gains yield 11.20%
Explanation:
A. Calculation to determine Horizon Value
Using this formula
Horizon Value = Dividend in Year 6/(Required Return – Growth Rate)
Let plug in the formula
Horizon Value = 1.25(1.0650)^2 (1.0336)/(11.20%-3.36%)
Horizon Value = $18.69
Calculation to determine the Current Intrinsic value Using this formula
Current intrinsic value = 1.25/(1.1120)^3 + 1.25(1.0650)/(1.1120)^4 + 1.25(1.0650)^2/(1.1120)^5 + 18.69/(1.1120)^5
Current intrinsic value = $13.61
B. Calculation to determine Dividend yield
Using this formula
Dividend yield = Expected Dividend next year/Current price
Let plug in the formula
Dividend yield= 0/13.61
Dividend yield= 0%
Calculation to determine Expected Capital Gains Yield using this formula
Expected Capital Gains Yield = Required return - Expected Current Dividend Yield
Let plug in the formula
Expected Capital Gains Yield= 11.20%- 0%
Expected Capital Gains Yield= 11.20%
Therefore:
Term Value
Horizon Value $18.69
Current Intrinsic value $13.61
Therefore Assuming that the markets are in equilibrium, Goodwin's current expected dividend yield is 0% and Goodwin's capital gains yield is 11.20%
Mazie Supply Company uses the percent of accounts receivable method to determine their Allowance for Uncollectible Accounts. On December 31, it has outstanding accounts receivable of $55,000, and it estimates that 2% will be uncollectible. Prepare the year-end adjusting entry to record bad debt expense under the assumption that the Allowance for Uncollectible Accounts has (a) a $415 credit balance before the adjusting entry and (b) a $291 debit balance before the adjusting entry.
Answer:
A. Dr Bad debts expense $685
Cr Allowance for doubtful accounts $685
B. Dr Bad debts expense $1,391
Cr Allowance for doubtful accounts $1,391
Explanation:
A. Preparation of the year-end adjusting entry to record bad debt expense if the Allowance for Uncollectible Accounts has a $415 credit balance before the adjusting entry
Dr Bad debts expense $685
Cr Allowance for doubtful accounts $685
[(2%*$55,000)-$415]
($1100-$415)
B. Preparation of the year-end adjusting entry to record bad debt expense if the Allowance for Uncollectible Accounts has a $291 debit balance before the adjusting entry
Dr Bad debts expense $1,391
Cr Allowance for doubtful accounts $1,391
[(2%*$55,000)+$291]
($1100+$291)
You believe that interest rate parity and the international Fisher effect hold. Assume that the U.S. interest rate is presently much higher than the New Zealand interest rate. You have receivables of 1 million New Zealand dollars that you will receive in one year. You could hedge the receivables with the one-year forward contract. Or, you could decide to not hedge. Is your expected U.S. dollar amount of the receivables in one year from hedging higher, lower, or the same as your expected U.S. dollar amount of the receivables without hedging
Answer:
The expected value is the same as the forward rate reflects the interest rate differential and expected spot rate as per the reflects the interest rate differential.
Financial aid letters show your aid and costs of attendance for _____
Answer: Four years
Explanation:
I just took a test over this
Cost of attendance is the estimated cost of college in a given year. It's the cost of tuition and fees, books and supplies, room and board, transportation and personal expenses and is an official number determined by each college. Sometimes, people refer to the cost of attendance as COA.
What does the cost of attendance include?If you're attending school at least half-time, the COA is the estimate of tuition and fees, cost of room and board (or living expenses), cost of books, supplies, transportation, loan fees, and miscellaneous expenses (including a reasonable amount for the documented cost of a personal computer), allowance for childcare.
Is the cost of attendance accurate?It's possible that the cost of attendance calculated by your college may not be entirely accurate in reality. For example, perhaps your textbook expenses may be more or less than the calculations. Or perhaps you have class fees that were not a part of the original formula.
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Corey is the city sales manager for RIBS, a national fast food franchise. Every working day, Corey drives his car as follows: Miles Home to office 20 Office to RIBS No. 1 15 RIBS No. 1 to No. 2 18 RIBS No. 2 to No. 3 13 RIBS No. 3 to home 30 Corey renders an adequate accounting to his employer. As a result, Corey's reimburseable mileage is: a.0 miles. b.46 miles. c.76 miles. d.66 miles.
Answer:
b.46 miles
Explanation:
Calculation to determine Corey's reimburseable mileage
Corey's reimburseable mileage= 15 miles + 18 miles + 13 miles
Corey's reimburseable mileage = 46 miles
Therefore As a result, Corey's reimburseable mileage is 46 miles
Source Inc. (lessor) entered in a lease agreement of equipment for a 5-year period with Lemon Inc. (lessee). The lease is properly classified as an operating lease by Source Inc. Lease payments were structured as follows: Year One: $6,000 Year Two: $12,000 Year Three: $10,000 Year Four: $10,000 Year Five: $12,500 What is the amount of lease revenue recognized in Year One and Year Two by Sorenstam Inc.
Answer:
the amount of lease revenue recognized is $10,100
Explanation:
The computation of the amount lease revenue recognized in Year One and Year Two by Sorenstam Inc. is shown below:
= (First year payment + second year payment + third year payment + fourth year payment + fifth year payment) ÷ number of years
= ($6,000 + $12,000 + $10,000 + $10,000 + $12,500) ÷ 5 years
= $10,100
Hence, the amount of lease revenue recognized is $10,100
Market research does not provide enough information for businesses to use in
decision making.
True or False
Answer:
False because market research is essential for decision making within buisnesses.
¿Por que muchas culturas tuvieron la necesidad de construir muebles? explique
Answer:
Los muebles tenían muchos adornos de flores y árboles. Las piezas solían ser asimétricas y tenían líneas curvas. La mayoría de los fabricantes usaban caoba y nogal, con un acabado pulido. La mayoría de las piezas eran muy caras porque se producían a mano
Explanation:
que lo que pienso espero sea de ayuda
How are a startup's financing requirements estimated
Answer:
How are Startups Financing Requirements Estimated?
1. Make Use of a Startup Work Sheet to be Able to Plan the Initial Financing.
2. Focus on the Expenses versus Assets. Another way for startups to estimate their financing requirements is by means of focusing on the expenses versus assets.
3. Similar Articles.
4. Cash Balance Prior to the Starting Date.
Explanation:
Question 8 of 10
Financial statements are prepared near the end of the accounting cycle.
Which of the following is true?
A. A balance sheet shows the total assets, liabilities, and owner's
equity at the end of the period
B. An income statement shows the total assetsliabilities, and
owner's equity at the end of the period.
C. An income statement shows the changes in stockholder's capital
for the period
D. A balance sheer shows the changes in stockholder's capital for the
period
SUSMIT
Answer:
A. A balance sheet shows the total assets, liabilities, and owner's
equity at the end of the period
Explanation:
As we know that
The income statement recognized only the income earned and expenses incurred of an organization
While on the other hand the balance sheet shows the financial position, profitability of the company. It involves assets, liabilities and stockholder equity
So according to the given options, the option A is correct
hence, the rest of the options would be incorrect
Answer:
A. A balance sheet shows the total assets, liabilities, and owner's
equity at the end of the period
Explanation:
a p exz
Prime Bank is offering your company the use of their lockbox services. They estimate that you can reduce your average mail time by 1.5 days and they can save you a combined clearing and processing time of 1 day by putting the checks into the clearing system sooner. Your firm receives 198 checks a day with an average value of $2,300 each. The current T-Bill rate is .011 percent per day. Assume a 365-day year. Prime Bank will charge your firm an annual fee of $27,500 plus $.20 per check. What is the annual net savings from installing this system
Answer:
$3,756.77
Explanation:
The computation of the annual net savings from installing this system is shown below
Given that
Reduction in average mail time= 1.5 days
And, Reduction in clearing and processing time = 1day
So, Total reduction = 1.5 + 1 = 2.5 days
No. of checks per day= 198
Average Value= $2300
So, the Value of all checks per day is
= 2300 × 198
= $455,400
Now total savings is
= $455,400 × 2.5 days × 0.00011 × 365 days
= $45,710.77
The Cost of service is
= Annual fee + variable fee
= $27,500 + 0.20 × 198 × 365
= $41,954
Now
finally Net savings is
= $45,710.77 - $41,954
= $3,756.77
Which of the following is not true of taxable asset purchases?
a. Net operating losses carry over to the acquiring firm.
b. The acquiring firm may step up its basis in the acquired assets.
c. Target firm shareholders are subject to a potential immediate tax liability.
d. Target firm net operating losses and tax credits cannot be transferred to the acquiring firm.
e. None of the above
Answer:
e. None of the above
Explanation:
The taxable asset purchases allows the individual to increase or step up the tax basis of acquired assets so as to reflect the price of the purchases made.
If one buy an assets, then he or she wants to allocate total purchase price in a way which gives a favorable postacquisition tax results.
In case of taxable asset purchases, the tax credits or the net operating losses cannot be transferred from the target firm to the acquiring firm.
The net operating loss carries over to the acquiring firm is not true of a taxable transaction.
What is an asset?An asset may be defined as any source owned by any individual or business that provides a long-term benefit that usually lasts for at least one year.
In a taxable asset purchase, net operating losses are not acquired by the firm. All the other statements are true for the taxable asset purchase.
Therefore, A is the correct option.
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The four general accounting principles include: (Check all that apply).
Answer:
The four accounting principles are:
Expense recognition: this principle establishes that expenses are recognized when their associated revenue is realized. For example, if I buy inventory in May, and sell it in June, I will recognize the inventory expense in June, not in May.Measurement: this principle establishes that businesses should only record transactions when these transactions can be expressed in terms of money.Revenue recognition: this principle establishes that revenues are accounted for when they are realized, not necessarily when they are paid for. For example, if I sell merchandise in June on credit, and the credit is due in July, I will recognize the revenue in June, not in July.Full disclosure: this principle establishes that public companies (those that sell and buy their stock in the public market) should disclose all relevant financial information to the stockholders (the authorities, investors, credit rating agencies, auditing agencies).
Generally accepted accounting principles, or GAAP, are standards that encompass the details, complexities, and legalities of business and corporate accounting.
The four general accounting principles are:1) Expense Recognition:
This principle shows that costs are recognized when the relevant revenue is realized. For example, if you buy inventory in May and sell it in June, record the inventory cost in June instead of May.2) Measurement:
This principle states that a company only needs to record a transaction if it can be expressed in money.3) Revenue Recognition:
This policy states that revenue is recognized when it is recognized and not necessarily when it is paid. For example, if you sell an item with credits in June and the credit expires in July, record the sale in June instead of July.4) Full Disclosure:
This principle requires public companies (those who buy and sell shares in the open market) to disclose all relevant financial information to shareholders (authorities, investors, rating agencies, accounting firms).Learn more :
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Martha is looking into investing a portion of her recent bonus into the stock market. While researching different companies, she discovers the following standard deviations of one year of daily stock closing prices. Handy Prosthetics: Standard deviation of stock prices =$1.05 El Lobo Malo Incorporated: Standard deviation of stock prices =$9.82 Based on the data and assuming these trends continue, which company would give Martha a stable long-term investment?
Answer:
Martha
Based on the data and assuming these trends continue,
Investment in Handy Prosthetics is preferred as it would give Martha a stable long-term investment.
Explanation:
a) Data:
Handy El Lobo Malo
Prosthetics Incorporated
Standard deviation of stock prices = $1.05 $9.82
b) The above standard deviations measure the spread of the stock prices over their daily stock closing prices in one year. The Handy Prosthetics' stock does not fluctuate as much as the El Lobo Malo's stock. This reduced fluctuation in prices makes it a more stable investment than El Lobo Malo's stock. Therefore, Martha should prefer the Handy's stock to the El Lobo Malo's stock.
Two methods can be used to produce expansion anchors. Method A costs $80,000 initially and will have a $15,000 salvage value after 3 years. The op-erating cost with this method will be $30,000 in year 1, increasing by $4000 each year. Method B will have a first cost of $120,000, an operating cost of $8000 in year 1, increasing by $6500 each year, and a $40,000 salvage value after its 3-year life. At an interest rate of 12% per year, which method should be used on the basis of a present worth analysis
Answer:
Method B should be used
Explanation:
Note: See the attached excel file for the calculation of the present worth (in bold red color) of Methods A and B.
From the attached excel file, we have:
Present worth of Method A = –$150,261.25
Present worth of Method B = –$125,178.34
Since the present worth of Method B of –$125,178.34 is lower than the present worth of Method A of –$150,261.25, it implies that Method B cost is less and more attractive at an interest rate of 12% per year than Method A cost. Therefore, Method B should be used.
In the sports and entertainment marketing industry, the event is the core product
True
False
Answer:
True
Explanation:
Brainliest
Parkinson Company (PC) had a beginning balance of $86,000 and an ending balance of $90,000 in itslong-term marketable securities account. During the period the Company paid $10,000 to purchase marketable securities. If the Company reported a gain on the sale of marketable securities of $1,000 the amount of the cash inflow from the sale of securities is
Answer:
the cash inflow from the sale of securities is $7,000
Explanation:
The computation of the cash inflow from the sale of securities is shown below:
= Opening balance + purchase marketable securities + gain on the sale of marketable securities - ending balance
= $86,000 + $10,000 + $1,000 - $90,000
= $97,000 - $90,000
= $7,000
hence, the cash inflow from the sale of securities is $7,000
Suppose you win on a scratch‑off lottery ticket and you decide to put all of your $2,500 winnings in the bank. The reserve requirement is 5% . What is the maximum possible increase in the money supply as a result of your bank deposit? maximum increase: $ Which events could cause the increase in the money supply to be less than its potential? Banks choose to loan out all excess reserves. All money loaned out is deposited back into the banking system. Banks decide to keep some excess reserves on hand. Some loan recipients choose to hold some cash instead of depositing all of it in banks.
Answer:
$50,000
Banks decide to keep some excess reserves on hand.
Explanation:
Increase in the total value of checkable deposit is determined by the money multiplier
Money multiplier = amount deposited / reserve requirement
2500/ 0.05 = $50,000
If the banks decides to keep excess reserves, the money loaned out would be lower and this would reduce money supply
Arrasmith Corporation uses customers served as its measure of activity. During February, the company budgeted for 36,000 customers, but actually served 28,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served:
Revenue: $4.50q
Wages and salaries: $34,200 + $1.40q
Supplies: $0.80q
Insurance: $11,400
Miscellaneous expenses: $7,400 + $0.40q
The company reported the following actual results for February:
Revenue $139,800
Wages and salaries $69,000
Supplies $15,400
Insurance $11,400
Miscellaneous expense $22,700
Required:
Prepare the company's flexible budget performance report for February.
Answer:
Arrasmith Corporation
Flexible Budget Performance Report For February:
Flexible Actual Variance
Budget Budget
Revenue $126,000 $139,800 $13,800 F
Wages and salaries $73,400 $69,000 $4,400 F
Supplies 22,400 15,400 7,000 F
Insurance 11,400 11,400 0 None
Miscellaneous expense 18,600 22,700 (4,100) U
Total expenses $125,800 $118,500 $7,300 F
Explanation:
a) Data and Calculations:
Budgeted customers served = 36,000
Actual customers served = 28,000
Actual Results for February:
Revenue $139,800
Wages and salaries $69,000
Supplies $15,400
Insurance $11,400
Miscellaneous expense $22,700
Total expenses $118,500
Revenue and Cost Formulas:
Revenue: $4.50q
Wages and salaries: $34,200 + $1.40q
Supplies: $0.80q
Insurance: $11,400
Miscellaneous expenses: $7,400 + $0.40q
Flexing the budget with the Revenue and Cost Formulas:
Revenue: $4.50 * 28,000 = $126,000
Wages and salaries: $34,200 + $1.40 * 28,000 = $73,400
Supplies: $0.80 * 28,000 = $22,400
Insurance: $11,400
Miscellaneous expenses: $7,400 + $0.40 * 28,000 = $18,600
differences between home trade and international trade
On December 31, Caper, Inc., issued $250,000 of eight percent, ten-year bonds for $218,844, yielding an effective interest rate of ten percent. Semiannual interest is payable on June 30 and December 31 each year. The firm uses the effective interest method to amortize the discount.
Required
Prepare an amortization schedule showing the necessary information for the first two interest periods.
Answer:
Capter, Inc.
Amortization Schedule
Date Payment Interest Expense Amortization Net Book Value
Dec. 31 $218,844
June 30 $10,000 $10,942 $942 219,786
Dec. 31 10,000 10,989 989 220,775
Explanation:
a) Data and Calculations:
Face value of bonds = $250,000
Bonds proceeds = 218,844
Bonds discounts = $31,156
Coupon rate = 8% with semiannual payments
Effective interest rate = 10%
On June 30:
Interest payment = $10,000 ($250,000 * 4%)
Interest Expense = $10,942 ($218,844 * 5%)
Amortization of discount = $942
Value of bonds = $219,786 ($218,844 + 942)
On December 31:
Interest payment = $10,000 ($250,000 * 4%)
Interest Expense = $10,989 ($219,786 * 5%)
Amortization of discount = $989
Value of bonds = $220,775 ($219,786 + 989)
Received cash from investors in exchange for 15,000 shares of stock (par value of $1.00 per share) with a market value of $10 per share. Purchased land in Wisconsin for $17,000, signing a one-year note (ignore interest). Bought two used delivery trucks for operating purposes at the start of the year at a cost of $10,000 each; paid $6,000 cash and signed a note due in three years for the rest (ignore interest). Paid $1,800 cash to a truck repair shop for a new motor for one of the trucks. (Increase the account you used to record the purchase of the trucks because the productive life of the truck has been improved) Sold one-fourth of the land for $4,250 to Pablo Development Corporation, which signed a six-month note. Stockholder Helen Bailey paid $27,700 cash for a vacant lot (land) in Canada for her personal use.
Prepare a trial balance at December 31, 2018.
Answer:
Kindly check explanation
Explanation:
Number of stock shares = 15000
Value per share = $10
Worth of shares = 15000 * $10 = $150000
Cash paid for truck purchase = $6000
Cash paid for truck repair = $1800
Land purchase = $17000
Land sale = $4250
Note receivable = $4250
Note payable = $17000
_________ TRIAL BALANCE _______
Cash ___________142,200
Land ___________ 12750
Truck ___________11800
Note receivable ___4250
Notes payable _______________17000
Long term notes payable _______4000
Common stock ______________ 15000
Paid-in capital in excess ________135000
TOTAL_______171,000 ________ 171,000
__________________________________
Tan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Division Osaka Yokohama Sales $ 3,000,000 $ 9,000,000 Net operating income $ 210,000 $ 720,000 Average operating assets $ 1,000,000 $ 4,000,000 Required: 1. For each division, compute the return on investment (ROI) in terms of margin and turnover. 2. Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 15%. Compute the residual income for each division.
Answer:
Return on Investment (ROI)
In terms of margin :
Division Osaka (ROI) = 21.00 %
Division Yokohama (ROI) = 18.75%
In terms of turnover :
Division Osaka (ROI) = 300%
Division Yokohama (ROI) = 225%
Residual Income
Division Osaka = $60,000
Division Yokohama = $120,000
Explanation:
Return on Investment = Divisional Profit Contribution / Assets Employed in the Division x 100
In terms of margin :
Division Osaka (ROI) = $ 210,000 / $ 1,000,000 x 100 = 21.00 %
Division Yokohama (ROI) = $ 720,000 / $ 4,000,000 x 100 = 18.75%
In terms of turnover :
Division Osaka (ROI) = $ 3,000,000 / $ 1,000,000 x 100 = 300%
Division Yokohama (ROI) = $ 9,000,000 / $ 4,000,000 x 100 = 225%
Residual Income = Controllable Profit - Cost of Capital Charge on Investment Controllable by Divisional Manager
Division Osaka = $ 210,000 - $ 1,000,000 x 15% = $60,000
Division Yokohama = $ 720,000 - $ 4,000,000 x 15% = $120,000
Which of the following show negative cash flow?
Answer:
where are the answer choices
A special order offering to buy 112,000 units has been received from a foreign distributor. The only selling costs that would be incurred on this order would be $19.80 per unit for shipping. The company has sufficient idle capacity to manufacture the additional units. Two-thirds of the manufacturing overhead is fixed and would not be affected by this order. In negotiating a price for the special order, the minimum acceptable selling price per unit should be: (Round your answer to two decimal places.)
Answer: $88.60
Explanation:
In negotiating a price for the special order, the minimum acceptable selling price per unit is calculated below:
Direct materials = $25.80
Direct labor = $31.80
Variable manufacturing overhead = $11.20
Selling cost = $19.80
Total variable cost = $88.60
Lusk Corporation produces and sells 10,000 units of Product X each month. The selling price of Product X is $40 per unit, and variable expenses are $32 per unit. A study has been made concerning whether Product X should be discontinued. The study shows that $70,000 of the $120,000 in monthly fixed expenses charged to Product X would not be avoidable even if the product was discontinued. If Product X is discontinued, the monthly financial advantage (disadvantage) for the company of eliminating this product should be: rev: 07_07_2020_QC_CS-218335
Answer: ($30000)
Explanation:
If Product X is discontinued, the monthly financial advantage (disadvantage) for the company of eliminating this product will be calculated thus:
Sales = 10000 × $40 = $40000
Variable expense = 10000 × $32 = $320000
Contribution margin lost = $400000 - $320000 = $80000
Savings in fixed expense = $120000 - $70000 = $50000
Financial disadvantage = Savings in fixed expenses - Contribution margin lost
= $50000 - $80000
= -$30000
In Cleveland, Clive sells 15 cloves at a price of $5 each. If Clive lowers his price by 10%, to $4.50 per clove, he will sell 16, or 6.67% more. In Dallas, Delores sells 15 cloves for $5 each. If Delores lowers her price by 2%, to $4.90, she will sell 16 cloves, or 6.67% more. Please state all price elasticities of demand as absolute values. Round answers to two places after the decimal when necessary.
Answer:
The Price elasticity of demand shows the effect of a change in price on the quantity demanded. In other words, it shows the percentage change in quantity demanded as a result of a 1% change in price.
Price elasticity of demand = % change in quantity demanded / % change in price of good
Clive Cloves price elasticity:
= 6.67% / 10%
= 0.667
Delores Cloves price elasticity:
= 6.67% / 2%
= 3.335
Water Source Inc. manufactures badminton rackets. The company estimates the following costs for the next year: Indirect factory wages $151,000 Supervisor salaries 56,000 Direct materials 221,000 Direct labor 149,000 Power and light 113,000 Depreciation of plant and equipment 74,000 Indirect materials 20,000 Insurance and property taxes 32,000 Determine the total factory overhead cost of the company.
Answer:
$446,000
Explanation:
Factory overhead are indirect costs incurred by a company during production which can not be easily be traced to units produced.
factory overhead cost calculation :
Indirect factory wages $151,000
Supervisor salaries $56,000
Power and light $113,000
Depreciation of plant and equipment $74,000
Indirect materials $20,000
Insurance and property taxes $32,000
Total $446,000