As Monir is in the real estate business, he may have some unique insights into the housing market and be able to make informed decisions about the value of their home and potential investments in the future.
Monir and Jackie are a couple in their 40s who own a new 2-story house in Pointe Saint-Charles. Jackie is expecting their first child in September.
Monir is a co-owner of a real estate company and receives What Monir does: Monir is the co-owner of a real estate company.
A real estate company is a business that specializes in buying, selling, and managing real estate.
Monir and his business partner will likely be responsible for overseeing the day-to-day operations of the company, including managing employees, negotiating deals, and setting prices for properties.
They may also be responsible for advertising and marketing the company's services to potential clients.
Monir's salary: Monir's salary as a co-owner of a real estate company can vary depending on a number of factors. For example, if the company is small, he may take home a smaller salary than if the company is larger.
Additionally, his salary may be impacted by the amount of revenue the company generates, as well as the profits that the company is able to make.
It is also possible that Monir's salary could fluctuate from year to year based on economic conditions in the real estate market.
Overall, it is likely that Monir's salary will be competitive given his experience and expertise in the industry.
The house: Monir and Jackie's new 2-story house in Pointe Saint-Charles is likely a significant investment for them.
It is important for them to carefully consider their financial situation and ensure that they are able to comfortably afford their mortgage payments.
With a new baby on the way, they may also want to think about saving money for future expenses, such as child care and education.
As Monir is in the real estate business, he may have some unique insights into the housing market and be able to make informed decisions about the value of their home and potential investments in the future.
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Which of the following is an example of a cash inflow from an operating activity?
a. Collection of an account receivable from a credit sale.
b. Collection of cash relating to a note receivable.
c. Sale of property, plant, and equipment.
d. None of the above.
Collection of an account receivable from a credit sale is an example of a cash inflow from an operating activity. Option A is the correct answer.
For every company organization, cash is the most valuable and liquid asset. Businesses reveal the closing amount of cash on their balance sheet for an accounting period, and good cash management may help an organization succeed. Option A is the correct answer.
The amount of money owed to a business for products or services provided or utilized but not yet paid for by clients is known as accounts receivable (AR). Due to the fact that receiving cash results from the sale of the company's products, which is an operating activity for any company, the collection of accounts receivables will have an impact on the organization's cash flow from operating activities and increase its cash balance.
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Under PL 86-272, which of the following does not qualify as a "mere solicitation or orders":
a. Use of hotels and homes for sales-related meetings;
b. Use of space at the salesperson's home solely for the salesperson's convenience;
c. Participation in a trade show or shows for not more than 14 days during the corporation’s tax year for federal income tax purposes.
d. Picking up or replacing damaged or returned property
Under PL 86-272, the following option does not qualify as a "mere solicitation of orders": c. Participation in a trade show or shows for not more than 14 days during the corporation’s tax year for federal income tax purposes.
Participating in a trade show or shows for more than a limited duration, even if it is within the tax year, goes beyond the scope of a "mere solicitation of orders" and may create nexus for state income tax purposes.
While the exact determination of whether participation in a trade show creates nexus for state income tax purposes can vary depending on the specific facts and laws of the state in question, it is generally considered to go beyond the scope of a "mere solicitation of orders" and may create nexus, thereby subjecting the business to potential state income tax obligations. It is advisable for businesses to consult with tax professionals or legal advisors to determine the specific implications of participating in trade shows in different jurisdictions.
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Which of the following entities was NOT a part of the Beatles new company, Apple Corps Ltd?A) Apple RecordsB) Apple TVC) Apple RetailD) Apple Electronics
Apple TV was not a part of the Beatles' company, Apple Corps Ltd. The correct option is B.
Apple Corps Ltd. was a multimedia corporation founded by the Beatles in 1968. The company was established as a vehicle to manage the Beatles' business affairs and encompassed various ventures, primarily focused on music and entertainment. The primary entity associated with Apple Corps Ltd. was Apple Records (option A).
Apple Records was the Beatles' record label, responsible for releasing their music as well as the work of other artists. It was an integral part of Apple Corps Ltd. and played a significant role in the company's operations.
Apple Retail (option C) and Apple Electronics (option D) were not part of Apple Corps Ltd. Apple Retail refers to the chain of Apple retail stores that began opening in 2001, long after the formation of Apple Corps Ltd. Similarly, Apple Electronics refers to the technology company Apple Inc., which was established in 1976, several years after Apple Corps Ltd. was formed.
Apple TV (option B) specifically refers to the digital media player and streaming device developed by Apple Inc. It was introduced in 2007, again well after the establishment of Apple Corps Ltd. Therefore, Apple TV was not a part of the Beatles' company, Apple Corps Ltd.
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3: purchased merchandise inventory on account from wholesalers, . terms /15, n/eom, fob shipping point.
The deal entailed buying stock of goods from wholesalers with terms of "net 15, end of month" (n/eom) and "free on board (FOB) shipping point."
"Net 15" refers to a deadline of 15 days for making payment on purchased items. If the purchase is made within a month, the phrase "end of month" indicates that the payment is due at the end of that month. The FOB shipping point denotes that once the items are transported, ownership and responsibility for them pass to the buyer. Net 15: "Net 15" is a payment term used in business transactions that specifies the number of days a buyer has to make payment for purchased goods or services. In this case, it means the payment is due within 15 days from the date of the purchase.End of month: "End of month" is another payment term used to indicate the due date for payment. If a purchase is made within a month and the payment is required "end of month," it means the payment is due on the last day of that month
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With the following data, compute the NET FUTA Tax. Gross FUTA Tax DUE $ 6,750 Credit against FUTA (assume applicable) $3,100. a) $7,000. b) $3,100. c) $6,750. d) $3,650.
The correct answer is option d) $3,650 in the given case of tax data
To compute the net FUTA (Federal Unemployment Tax Act) tax, we subtract the credit against FUTA from the gross FUTA tax due.
Given:
Gross FUTA Tax Due: $6,750
Credit against FUTA: $3,100
Net FUTA Tax = Gross FUTA Tax Due - Credit against FUTA
Net FUTA Tax = $6,750 - $3,100 = $3,650
Therefore, the correct answer is option d) $3,650.
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Use the following table to calculate the expected return from an asset. Return
0.25 0.10 0.20 0.30 Probability 0.30 0.25 0.20 0.25
The expected return from the asset is 20.25%. This means that, on average, you can expect to earn a return of 20.25% from this asset based on the given probabilities and returns.
The expected return from the asset can be calculated as follows:
Expected return = (Return1 * Probability1) + (Return2 * Probability2) + (Return3 * Probability3) + (Return4 * Probability4)
To calculate the expected return from an asset, you multiply each possible return by its corresponding probability and then sum up the results. In this case, we have four possible returns and their respective probabilities. Let's calculate the expected return step by step:
Expected return = (0.10 * 0.30) + (0.20 * 0.25) + (0.30 * 0.20) + (0.25 * 0.25)
Expected return = 0.03 + 0.05 + 0.06 + 0.0625
Expected return = 0.2025 or 20.25%
Therefore, the expected return from the asset is 20.25%. This means that, on average, you can expect to earn a return of 20.25%.
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Arabian Gulf Corporation reports the following stockholders' equity section on December 31, 2020. - Common stock; $10 par value; 500,000 shares authorized; 200,000 shares issued and outstanding.. .$ 2,000,000 - Paid in capital in excess of par value, common stock -Retained earnings.. ..400,000 900,000 $3,300,000 Total The Corporation completed the following transactions in 2021. 1- Jan. 10, Directors declared a $1 per share cash dividend payable on March 15 to the Jan. 31 stockholders of record. 2- Mar. 01, Purchased 10,000 shares of its own common for $15 per share. 3- Mar. 15, Paid the cash dividend declared on Jan. 10. 4- May 01, Sold 6,000 of its treasury shares at $15 cash per share. 5-Sep. 30, Directors declared a 30% stock dividend when the share market price is $16. 6- Nov. 01, Distributed stock dividends declared on Sep. 30. 7- Nov. 15. The company implemented 5-for-1 stock split for the common stock. Required; Prepare journal entries to record each of these transactions for 2021. CLEARLY INDICATE THE DEBITS & CREDITS Example: XYZ Company pays $10,000 cash to purchase land Answer: Dr. Land 10,000 Cr. Cash 10,000 For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac)
Journal entries to record each of these transactions for 2021 are:Jan. 10:Declaration of cash dividends payable on March 15 to the Jan. 31 stockholders of record means that: Total amount of dividend = $1 × 200,000 = $200,000 Dividend payable account Dr. $200,000 Dividend payable account Cr. $200,000
Mar. 01: Purchase of 10,000 shares of its own common for $15 per share: Treasury stock account Dr. $150,000 Cash account Cr. $150,000 Mar. 15: Payment of cash dividends: Dividend payable account Dr. $200,000 Cash account Cr. $200,000 May 01: Sale of 6,000 treasury shares at $15 cash per share: Cash account Dr. $90,000 Treasury stock account Cr. $90,000
Sep. 30: Declaration of 30% stock dividends: Total number of new shares = 30% of 200,000 = 60,000 Total amount to be transferred from retained earnings = Market price × 60,000 = $16 × 60,000 = $960,000 Retained earnings account Dr. $960,000 Common stock dividend distributable Cr. $240,000 ([$16 par value × 60,000 shares] /
Oct. 31: After adjusting the retained earnings balance, the Common Stock Dividend Distributable account reflects the shares to be distributed: Common stock dividend distributable account Dr. $240,000 Common stock account Cr. $240,000
Nov. 01: Implementation of 5-for-1 stock split: Common stock account Dr. $2,000,000 ([$10 par value × 200,000 shares] × 5) Additional paid-in capital account Cr. $2,000,000 ([$10 par value × 200,000 shares] × 4) Hope this helps!
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true or false
3. On FOB term basis, seller prepares the goods at the stipulated time, meanwhile, seller also contracts for insurance cover against the risk of loss of or damage to the goods during the carriage. ( )
The given statement is False.What is FOB?FOB refers to free on board. It means a contractual agreement between a buyer and a seller that defines at what point of transportation the risks and responsibilities for the shipped products transfer from the seller to the buyer. In simple terms, FOB is a shipment term that means the seller is responsible for the goods until they are placed on the shipping vessel.The FOB term does not imply that the seller contracts for insurance coverage against the risk of loss of or damage to the goods during the carriage. The buyer or the seller may acquire insurance cover separately.The seller is responsible for preparing the goods at the agreed-upon time on an FOB term. The seller is also responsible for delivering the goods to the port or vessel that the buyer specifies. Therefore, the statement mentioned above is false because the seller does not contract for insurance cover against the risk of loss of or damage to the goods during the carriage.
which of the following is false? which of the following is false? the analysis of agriculture, textiles, and clothing in the eu, the united states, and japan supports the proposition that older sectors of the economy are most protected, particularly in cases where the nation has lost a substantial part of its comparative advantage. trade barriers in high-income countries do not cause unintended consequences in low-income countries because most of their trade is with other industrialized countries. even when tariffs are relatively low, the cost per job saved tends to be high. commercial policy is grossly inefficient at achieving the objective of job preservation.
The false statement is that trade barriers in high-income countries do not cause unintended consequences in low-income countries because most of their trade is with other industrialized countries, option D is correct.
Trade barriers in high-income countries do cause unintended consequences in low-income countries, even if most of their trade is with other industrialized nations. When high-income countries impose trade barriers, it can lead to a decline in imports from low-income countries, affecting their economies and development. Trade barriers limit market access for low-income countries, reducing their export opportunities and hindering their economic growth.
Additionally, trade barriers can lead to a cascading effect, where the impact is felt throughout global supply chains, affecting not only low-income countries but also other countries in the trading network. Thus, it is incorrect to assume that trade barriers in high-income countries have no unintended consequences for low-income countries, regardless of their trade composition, option D is correct.
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The complete question is:
Which of the following is False?
A) The analysis of agriculture, textiles, and clothing in the EU, the United States, and Japan supports the proposition that older sectors of the economy are most protected, particularly in cases where the nation has lost a substantial part of its comparative advantage.
B) Even when tariffs are relatively low, the cost per job saved tends to be high.
C) Commercial policy is grossly inefficient at achieving the objective of job preservation.
D) Trade barriers in high-income countries do not cause unintended consequences in low-income countries because most of their trade is with other industrialized countries.
Suppose that the demand curve for electric cars is Q(P) = 100 - 4P. 1. Suppose that Tesla is the only producer of electric cars in the market. They face a total cost function TC(Q) = 5Q, where Q represents the number of units produced. a. What is the market quantity that Tesla produces to maximize its profits? b. What is the associated market price?
The market quantity that Tesla produces to maximize its profits is approximately 52.5 units. The associated market price is approximately $11.875 per unit.
In this case, we have:
Demand function: Q(P) = 100 - 4P
Total cost function: TC(Q) = 5Q
a. To find the market quantity, we need to equate MC and MR:
MC = MR
Marginal Cost (MC) is given by the derivative of the total cost function with respect to quantity (Q):
MC = dTC/dQ
Marginal Revenue (MR) is given by the derivative of the demand function with respect to quantity (Q):
MR = dQ(P)/dQ
Let's calculate MC and MR:
MC = dTC/dQ = 5
MR = dQ(P)/dQ = 100 - 8P
To find the quantity where MC equals MR, we set the two equations equal to each other and solve for Q:
5 = 100 - 8P
8P = 100 - 5
8P = 95
P = 95/8
P = 11.875
Substituting P back into the demand function to find Q:
Q = 100 - 4P
Q = 100 - 4(11.875)
Q = 100 - 47.5
Q = 52.5
Therefore, the market quantity that Tesla produces = 52.5 units.
b. To find the associated market price, we substitute the quantity (Q) back into the demand function:
P = (100 - Q)/4
P = (100 - 52.5)/4
P = 47.5/4
P = 11.875
Therefore, the associated market price = $11.875 per unit.
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A corporation issued 6,000 shares of its $10 par value common stock in exchange for land that has a market value of $84,000 The entry to record this transaction would include A. A debit to Land for $60,000. B. A credit to paid (Contributed) Capital in Excess of Par Value, Common Stock for $24.000 C. A debit to Common Stock for $60,000 D, A credit to Land for $60,000
The entry to record the transaction where a corporation issued 6,000 shares of its $10 par value common stock in exchange for land that has a market value of $84,000 would include:
A. A debit to Land for $60,000.
C. A debit to Common Stock for $60,000.
The correct answer is a combination of options A and C.
When a corporation issues stock in exchange for non-cash assets, such as land, the general principle is to record the transaction at the fair market value of the assets received. In this case, the market value of the land is $84,000. To properly record the transaction, the following entries would be made: Debit Land for $60,000: This recognizes the fair market value of the land received. The difference between the fair market value ($84,000) and the par value of the stock ($10 x 6,000 shares = $60,000) represents the contributed capital in excess of par value. Debit Common Stock for $60,000: This entry records the par value of the shares issued, which is $10 per share multiplied by the number of shares issued (6,000 shares). The answer options B and D are incorrect because they do not accurately reflect the accounting treatment required in this scenario. Option B suggests crediting Contributed Capital in Excess of Par Value, but this account is not applicable in this specific transaction. Option D suggests crediting Land for $60,000, but this amount does not represent the fair market value of the land received. Therefore, the correct answer is A. A debit to Land for $60,000 and C. A debit to Common Stock for $60,000.
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In the 1980s, Japanese manufacturers were able to offer products that were perceived to be superior in quality to US-made products. The Japanese products did not cost more than US products. How were the Japanese able to compete on cost, including ocean shipping?
Japanese manufacturers in the 1980s implemented Total Quality Management practices such as Kaizen, JIT, and Total Quality Control, enabling them to offer high-quality products at competitive prices through waste reduction, continuous improvement, and efficient shipping practices.
In the 1980s, Japanese manufacturers were able to offer products that were perceived to be superior in quality to US-made products. The Japanese products did not cost more than the US products. The Japanese were able to compete on the cost by implementing Total Quality Management(TQM). They emphasized waste reduction and continuous improvement. This resulted in high-quality products, reduced costs, and increased efficiency.
Japanese manufacturers also implemented a variety of practices that were alien to Western manufacturers. These included: Kaizen - This was a continuous improvement process that enabled employees to improve their work by eliminating waste and reducing errors. This practice led to the development of lean manufacturing systems. Just-in-time (JIT) - This was a logistics management system that allowed manufacturers to produce goods based on customer demand rather than inventory levels. This eliminated the need for large inventory levels and reduced costs.
Total Quality Control - This was a quality control process that focused on the entire manufacturing process, from raw materials to finished products. It allowed manufacturers to identify quality issues at an early stage, which reduced the cost of rework and scrap. By implementing these practices, the Japanese were able to reduce costs and improve the quality of their products. They were also able to compete on the cost by implementing efficient ocean shipping practices. This allowed them to ship goods at a lower cost than their US counterparts.
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Be prepared to discuss and explain what a mutual fund is and all
the advantages of a mutual fund.
A mutual fund is a type of financial investment in which money from multiple investors is pooled together to purchase a portfolio of various securities like stocks, bonds, or other assets.
What are the advantages of a mutual fund?
Following are the advantages of a mutual fund:
1. Diversification: Mutual funds spread the investment over multiple securities, which reduces the risk and increases returns.
2. Professional Management: Mutual funds are managed by professional fund managers who have experience in the market. They have the responsibility of investing the money of their investors and ensuring the best returns possible.
3. Accessibility: Mutual funds are readily available to investors with even a small amount of money.
4. Flexibility: Mutual funds allow for a lot of flexibility in terms of investment options. Investors can choose to invest in funds that cater to their risk tolerance levels.
5. Liquidity: Mutual funds offer easy access to cash as they can be easily bought and sold.
6. Cost-effective: Due to economies of scale, mutual funds have lower transaction costs than individual investors.
7. Transparency: Mutual funds publish their NAV (Net Asset Value) regularly, which ensures transparency in pricing and operations.
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chrysalis financial is offering a 3-year certificate of deposit with semi-annual compounding at 2.30%. you invest $5,175 in the certificate today. on the maturity date, the investment will be worth:
On the maturity date, the investment will be worth approximately [tex]\$5,654.96[/tex].
To calculate the future value of the investment at maturity, we can use the formula for compound interest with semi-annual compounding:
[tex]\[A = P \left(1 + \frac{r}{n}\right)^{nt}\][/tex]
Where:
[tex]A[/tex] is the future value (maturity value) of the investment,
[tex]P[/tex] is the initial principal (investment amount),
[tex]r[/tex] is the interest rate (2.30%),
[tex]n[/tex] is the number of compounding periods per year (2 for semi-annual compounding),
and [tex]t[/tex] is the number of years (3).
Substituting the given values into the formula:
[tex]\[A = \$5175 \left(1 + \frac{0.0230}{2}\right)^{(2 \times 3)}\][/tex]
Simplifying the formula:
[tex]\[A = \$5175 \times (1.0115)^6\][/tex]
Calculating the future value:
[tex]\[A \approx \$5,654.96\][/tex]
With an initial investment of [tex]\$5,175[/tex] in a 3-year certificate of deposit at a 2.30% interest rate compounded semi-annually, the investment will be worth approximately [tex]\$5,654.96[/tex] at maturity.
Therefore, on the maturity date, the investment will be worth approximately [tex]\$5,654.96[/tex].
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Which of the following statements best describe e-interruptions? OA. E-interruptions are caused by face to face conversations. O B. E-interruptions are caused by emails and texts. OC. E-interruptions
The best statement that describes e-interruptions is "E-interruptions are caused by emails and texts."
The correct Option is B.
E-interruptions can be defined as digital distractions that affect people's focus or concentration on a given task.
They can take many forms, including email, text messages, social media notifications, and pop-up ads. These interruptions can lead to a reduction in productivity and a decrease in the quality of work being done. Therefore, it is essential to learn how to manage e-interruptions effectively.In today's world, electronic communication channels have become more prevalent than ever. With the advent of smartphones and tablets, people are now connected to the internet around the clock. This constant connectivity has created a situation where e-interruptions have become a common occurrence. Whether it's an email notification or a social media update, these distractions can quickly disrupt our focus and make it challenging to stay on task.E-interruptions can have a significant impact on our productivity and well-being. They can lead to increased stress, reduced job satisfaction, and a decrease in the quality of work being done. To manage these interruptions effectively, it is essential to create a work environment that minimizes their impact. This may involve turning off notifications during specific periods, using productivity apps that block distractions, or setting clear boundaries around electronic communication channels. By managing e-interruptions effectively, you can improve your focus, productivity, and overall well-being.
The correct Option is B.
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Which of the following statements is true? A. As the degree of specialization and interdependence has increased over the years, dependency on government services has declined. B. Decreased specialization leads to increased reliance on others. C. Increased specialization leads to decreased interdependence. D. Increased specialization leads to increased interdependence. E. The degree of specialization in the U.S. has decreased over the years. F. I'm not sure A. B. C. D. E.
The correct answer is D. Increased specialization leads to increased interdependence.
Specialization refers to the process of individuals, firms, or countries focusing on producing specific goods or services in which they have a comparative advantage. As specialization increases, individuals and entities become more specialized in their respective areas, leading to greater expertise and efficiency in production.
This increased specialization fosters interdependence among various parties. As each specialized entity focuses on producing a specific product or service, they rely on other specialized entities to provide goods or services that they do not produce themselves. This interdependence is driven by the need for trade and exchange of specialized products, creating a network of interconnected economic relationships.
Therefore, as specialization increases, so does interdependence, as entities rely on each other's specialized contributions to meet their diverse needs and create a more efficient economy.
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Farmer's market is open to all residents in Swissburg. Right now there are 28 farmers, each sells a unique variety of cheese. Cheese prices on the market vary from $4 to $26 per pound. Most farmers love the cheese they make and earn positive profits. What type of market is this? (monopoly, oligopoly, perfect competition, or monopolistic competition) Is it accurate to say that this market is definitely not in a short-run equilibrium because cheese prices do not appear to converge to one level? Can we say that this market is not in long-run equilibrium?
The type of market is monopolistic competition. It is also accurate to say that this market is not in short-run equilibrium and not in the long run equilibrium.
This is because there are many producers of similar but not identical products. Each of the 28 farmers has a unique variety of cheese to offer. They compete with each other to attract customers by selling their cheeses at a price lower than their competitors’.
It is also accurate to say that this market is not in short-run equilibrium because cheese prices do not appear to converge to one level. This is because of the unique varieties of cheese that each farmer offers. They are able to set their prices based on the uniqueness of their product. There is no standard price for cheese in this market, which means it is not in short-run equilibrium.
We can say that this market is not in long-run equilibrium because in long-run equilibrium, all firms in the industry would be earning zero economic profit. This is not the case in this market as most farmers love the cheese they make and earn positive profits. Therefore, the market is not in long-run equilibrium.
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Section B: Problem Solving- Show all workings (60 points) Problem 1 (Allocate Transaction Price, Upfront Fees) Blue PC sells tablet PCs combined with Internet service, which permits the tablet to connect to the Internet anywhere and set up a Wi-Fi hot spot. It offers two bundles with the following terms: 1. Tablet Bundle A sells a tablet with 4 years of Internet service. The price for the tablet and a 4- year Internet connection service contract is $600. The standalone selling price of the tablet is $300 (the cost to Blue PC is $225). Blue PC sells the Internet access service independently for an upfront payment of $420. On January 2, 2020, Blue PC signed 100 contracts, receiving a total of $60,000 in cash. 2. Tablet Bundle B includes the tablet and Internet service plus a service plan for the tablet PC (for any repairs or upgrades to the tablet or the Internet connections) during the 4-year contract period. That product bundle sells for $750. Blue PC provides the 4-year tablet service plan as a separate product with a standalone selling price of $200. Blue PC signed 400 contracts for Tablet Bundle B on July 1, 2020, receiving a total of $300,000 in cash. Instructions (a) Prepare any journal entries to record the revenue arrangement for Tablet Bundle A on January 2, 2020, and December 31, 2020. (12 Points) (b) Prepare any journal entries to record the revenue arrangement for Tablet Bundle B on July 1, 2020, and December 31, 2020. (15 Points) (c) Repeat the requirements for part (a), assuming that Blue PC has no reliable data with which to estimate the standalone selling price for the Internet service. (8 Points)
a)Revenue for Tablet Bundle A is $11,475 to be recognized in 2021, 2022, and 2023 ($38.25 x 100 contracts) x 1 year = $3,825 to be recognized in 2020. b) Revenue for Tablet Bundle B is $137,500 to be recognized in 2021, 2022, and 2023 [($750 - $200) x 400 contracts] / 4 = $34,375 to be recognized in 2020. c) Total revenue to be recognized in 2020: $726.86.
(a) On January 2, 2020, Blue PC signed 100 contracts for Tablet Bundle A, receiving $60,000 in cash. To record the revenue arrangement, Blue PC needs to allocate the transaction price between the tablet and the internet service. The standalone selling price of the tablet is $300, and since there is reliable data to estimate the standalone selling price of internet service ($420), the amount allocated to the internet service is $300 ($600 - $300). The journal entry to record the revenue arrangement on January 2, 2020, is as follows:
Cash $60,000 Unearned revenue $60,000
To record the receipt of cash for 100 contracts signed for Tablet Bundle A.
On December 31, 2020, when the internet service will be provided, Blue PC should recognize revenue for the internet service. The journal entry to record this is as follows:
Unearned revenue $30,000 Service revenue $30,000
To record the revenue recognition for the 4-year internet service included in Tablet Bundle A for one year.
(b) On July 1, 2020, Blue PC signed 400 contracts for Tablet Bundle B, receiving $300,000 in cash. To record the revenue arrangement, Blue PC needs to allocate the transaction price between the tablet, internet service, and tablet service plan. The standalone selling price of the tablet is $300 ($225 cost), the internet service is $420, and the tablet service plan is $200. Therefore, the amount allocated to the tablet, internet service, and tablet service plan is $252 ($750 * $300/$920), $372 ($750 * $420/$920), and $126 ($750 * $200/$920), respectively. The journal entry to record the revenue arrangement on July 1, 2020, is as follows:
Cash $300,000 Unearned revenue $300,000
To record the receipt of cash for 400 contracts signed for Tablet Bundle B.
On December 31, 2020, when the internet service will be provided, Blue PC should recognize revenue for the tablet, internet service, and tablet service plan for six months. The journal entry to record this is as follows:
Unearned revenue $75,600 Service revenue $37,800 Tablet revenue $50,400 Deferred revenue $126,000
To record the revenue recognition for the 4-year tablet service plan, internet service, and tablet for six months in Tablet Bundle B.
(c) Assuming that Blue PC has no reliable data with which to estimate the standalone selling price for the Internet service, the company can estimate it using the residual method, where the selling price for the tablet is subtracted from the total selling price of the bundle to arrive at the implied price of the internet service. The implied price of the internet service in Tablet Bundle A is $300 ($600-$300), and in Tablet Bundle B, it is $400 ($750-$300). The journal entries for revenue recognition on January 2, 2020, and July 1, 2020, will remain the same as in parts (a) and (b), but the amounts allocated to the internet service will be different ($300 for Tablet Bundle A and $400 for Tablet Bundle B).
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a physician has written a study plan to test whether an approved drug can prevent headaches. the physician has sent this plan to the pharmaceutical company that makes the drug, and the company has agreed to provide the drug at no cost for the study. this is an example of:
We can see here that this is an example of: clinical trial.
What is a study plan?A study plan is a structured schedule or outline that individuals create to guide their learning and academic activities. It serves as a roadmap for organizing and managing one's time, resources, and efforts in order to achieve specific learning goals and academic success.
A clinical trial is a research study that tests the safety and effectiveness of a medical intervention in humans. In this case, the medical intervention is the drug that the physician wants to test for its ability to prevent headaches.
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The physician has devised a study plan, outlining the methodology and objectives of the research.
By reaching out to the pharmaceutical company that manufactures the drug, the physician has successfully obtained their agreement to provide the medication free of charge for the study. This demonstrates a cooperative effort between the medical community and the industry to conduct scientific investigations and gather valuable data on the drug's potential in headache prevention. The arrangement signifies a mutually beneficial relationship, as the pharmaceutical company benefits from the scientific inquiry into their product, while the physician gains access to the necessary resources to conduct the study.For such more questions on methodology
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How might the growth in online marketing affect the structure of retail supply chains? Provide and discuss one example of companies who have succeeded and one example of those who have faltered by this growth.
The growth in online marketing has reshaped the structure of retail supply chains, with a shift towards e-commerce and direct-to-consumer sales.
The growth in online marketing has had a significant impact on the structure of retail supply chains. One key aspect that has been affected is the distribution network and logistics operations. Traditional retail supply chains were primarily designed to support brick-and-mortar stores, with a focus on delivering products to physical locations.
However, the rise of online marketing has led to a shift towards e-commerce and direct-to-consumer sales, requiring retailers to adapt their supply chains to meet the demands of online customers.
One example of a company that has succeeded in adapting to the growth in online marketing is Amazon. Amazon revolutionized the retail industry by developing a highly efficient and streamlined supply chain infrastructure. They invested heavily in building fulfillment centers strategically located near major urban areas to enable faster delivery.
Their sophisticated inventory management system and use of advanced technologies like robotics and automation have allowed them to handle high order volumes and provide a seamless online shopping experience for customers.
On the other hand, a company that has faltered in the face of online marketing growth is Sears. Sears was once a dominant player in the retail industry but failed to adapt to the changing landscape.
They struggled to keep up with the rapid rise of e-commerce and underestimated the impact it would have on their traditional retail business model.
Sears had an extensive network of physical stores, but their supply chain and logistics operations were not equipped to efficiently handle online orders and fulfill customer expectations for fast and convenient delivery. As a result, they faced declining sales and ultimately filed for bankruptcy.
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In the context of stock investment, what does this statement,
"buy the rumors, sell the fact", mean?
"Buy the rumors, sell the fact" means buying stocks based on rumors or speculation and selling them once the news is confirmed.
The statement "buy the rumors, sell the fact" is a phrase commonly used in stock investment. It suggests a strategy where investors buy stocks based on rumors or speculation and then sell them once the actual facts or news are confirmed or released.The idea behind this strategy is that rumors or speculations often create anticipation and excitement in the market, leading to increased buying interest and potentially driving up the stock price.However, once the actual facts or news are revealed, the market's reaction may not meet the initial expectations, leading to a decline in the stock price. Therefore, investors following this strategy aim to take advantage of the market's reaction to rumors and news by buying before the news is confirmed and selling once the news becomes public.It is important to note that this strategy carries risks and requires careful analysis and consideration of the reliability and potential impact of the rumors or news on the stock's value.For more such questions on Stocks:
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Consider a 20-year (T) lease providing for annual payments at the end of the years. The initial rent is $30/SF (CF), but that rent will grow at a rate of 2.5% per year (g) each year thereafter. What is the PV of the lease, per SF, assuming an opportunity cost of capital of 8% (r) per year?
The present value (PV) of the lease, per square foot (SF), is $25.47.
To calculate the present value (PV) of the lease, we need to determine the annual cash flows and discount them to their present value using the opportunity cost of capital rate. The lease provides for annual payments at the end of each year for a period of 20 years. The initial rent is $30 per square foot (SF), and it will increase by 2.5% per year thereafter.
Step 1:
To calculate the PV, we can use the formula for the present value of an annuity:
PV = CF * [1 - (1 + g)^(-T)] / (r - g)
where PV is the present value, CF is the cash flow in the first year, T is the number of years, r is the opportunity cost of capital rate, and g is the growth rate.
Step 2:
In this case, CF is $30/SF, T is 20 years, r is 8% per year, and g is 2.5% per year. Plugging these values into the formula, we get:
PV = $30 * [1 - (1 + 0.025)^(-20)] / (0.08 - 0.025)
≈ $30 * [1 - (1.025)^(-20)] / 0.055
≈ $30 * [1 - 0.5605] / 0.055
≈ $30 * 0.4395 / 0.055
≈ $13.185 / 0.055
≈ $239.727
To express the PV per SF, we divide the PV by the SF:
PV per SF = $239.727 / 9.4
≈ $25.47
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Mary Willis is the advertising manager for Bargain Shoe Store. She is currently working on a major promotional campaign. Her ideas include the installation of a new lighting system and increased display space that will add $24,000 in fixed costs to the $270,000 currently spent. In addition, Mary is proposing that a 5% price decrease ($40 to $38) will produce a 20% increase in sales volume (20,000 to 24,000). Variable costs will remain at $24 per pair of shoes. Management is impressed with Mary's ideas but concerned about the effects that these changes will have on the break-even point and the margin of safety. Compute break-even point and margin of safety ratio, and prepare a CVP income statement before and after changes in business environment.
Before computing the break-even point and margin of safety ratio, let's first calculate the new variable cost of the shoes using the information provided. Variable cost per pair of shoes = $24Fixed cost = $270,000 + $24,000 = $294,000New selling price per pair of shoes = $38The contribution margin per pair of shoes can now be computed as follows:
Contribution margin = Selling price per pair of shoes - Variable cost per pair of shoes Contribution margin = $38 - $24Contribution margin = $14Now, let's compute the break-even point:
BEP = Fixed cost / Contribution marginBEP = $294,000 / $14BEP ≈ 21,000 pairs of shoes Next, let's compute the margin of safety ratio:Margin of safety ratio = (Current sales - BEP) / Current sales margin of safety ratio = (20,000 - 21,000) / 20,000Margin of safety ratio = -0.05 or -5%This negative result suggests that the store is not making any profits, as it is operating below its break-even point. Therefore, the store should be wary of the effects of the changes on the margin of safety ratio.
Preparing the CVP income statement, before the changes, will give: Sales revenue = 20,000 × $40 = $800,000Variable costs = 20,000 × $24 = $480,000Contribution margin = $320,000Fixed costs = $270,000Net income before taxes = $50,000After the changes, the CVP income statement will be: Sales revenue = 24,000 × $38 = $912,000Variable costs = 24,000 × $24 = $576,000Contribution margin = $336,000Fixed costs = $294,000Net income before taxes = $42,000
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Let the Canadian economy be described below. You are an economist in the Department of Finance, Ottawa. C=60+0.9Y (Yg is disposable income) I=300 (Investment spending) G=120 (Government purchases) NT=0.1Y (Net taxes) X= 120 (Exports are constant) IM= 0.31Y (Imports depend positively on our own Y) a) Calculate the equilibrium Y. Y=0 b) Find the autonomous multiplier. Autonomous multiplier Y = 0 c) Find the government budget balance BB, given your Y in (a). BB=0 d) Oil prices have been rising recently. Higher crude oil prices translate to higher costs for gasoline, plastic and many products. Suppose the higher oil prices translate. to our investment spending dropping from 300 to 100 due to a weaker investment confidence. Find the new Y. Y = O e) Find the BB as a result of the drop in investment spending. BB-0 f) is this change in BB due to an increase in government spending, ie, is the Canadian government to be blamed? O Yes O No g) Suppose the government wants to push the economy back to the Y level in (a) but with the investment spending still at 1-100. Find the new G necessary. G=0
a) To find the equilibrium level of output (Y), we need to set aggregate demand (AD) equal to aggregate supply (AS).
AD = C + I + G + (X - IM)
= (60 + 0.9Y) + 300 + 120 + (120 - 0.31Y)
AS = Y
Setting AD equal to AS:
60 + 0.9Y + 300 + 120 + 120 - 0.31Y = YSimplifying the equation:
600 - 0.41Y = YCombining like terms:
1.41Y = 600Dividing both sides by 1.41:
Y = 425.53Therefore, the equilibrium level of output (Y) is approximately 425.53.
b) The autonomous multiplier is the change in equilibrium output divided by the change in autonomous spending. In this case, autonomous spending refers to investment (I).
Change in Y = Y - Y0
= 425.53 - 0
= 425.53
Change in I = I - I0
= 100 - 300
= -200
Autonomous multiplier (k) = Change in Y / Change in I
= 425.53 / -200
= -2.128
Therefore, the autonomous multiplier is approximately -2.128.
c) The government budget balance (BB) is calculated as the difference between government purchases (G) and net taxes (NT).
BB = G - NT
= 120 - 0.1Y
Substituting the equilibrium output (Y = 425.53):
BB = 120 - 0.1(425.53)
= 120 - 42.553
= 77.447
Therefore, the government budget balance (BB) is approximately 77.447.
d) Given that investment spending drops from 300 to 100, we need to adjust the equation for aggregate demand (AD):
AD = C + I + G + (X - IM)
= (60 + 0.9Y) + 100 + 120 + (120 - 0.31Y)Setting AD equal to AS:
60 + 0.9Y + 100 + 120 + 120 - 0.31Y = YSimplifying the equation:
400 - 0.41Y = YCombining like terms:
1.41Y = 400Dividing both sides by 1.41:
Y = 283.69Therefore, the new equilibrium level of output (Y) is approximately 283.69.
e) The government budget balance (BB) is calculated as the difference between government purchases (G) and net taxes (NT).
BB = G - NT
= 120 - 0.1Y
Substituting the new equilibrium output (Y = 283.69):
BB = 120 - 0.1(283.69)
= 120 - 28.369
= 91.631
Therefore, the government budget balance (BB) is approximately 91.631.
f) No, the change in the government budget balance (BB) is not due to an increase in government spending. It is primarily caused by the drop in investment spending.
g) To push the economy back to the equilibrium level of output (Y = 425.53) with investment spending still at 100, we can calculate the new required level of government purchases (G).
AD = C + I + G + (X - IM)
= (60 + 0.9Y) + 100 + G + (
120 - 0.31Y)
Setting AD equal to AS:
60 + 0.9Y + 100 + G + 120 - 0.31Y = YSimplifying the equation:
280 + 0.59Y + G = YRearranging the equation:
0.41Y - G = 280Since we want the investment spending to remain at 100, we substitute I = 100:
0.41Y - 100 = 280Solving for Y:
0.41Y = 380Y = 926.83Therefore, the new required level of government purchases (G) to push the economy back to the equilibrium level of output is approximately 926.83.
About InvestmentInvestment, is a activity, either directly or indirectly, with the hope that in the future the owner of the capital will receive a number of benefits from the results of the investment.
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The town of Khatmal has two citizens: a rich citizen (R) and a poor one (P). It has a road that leads to the neighbouring town; however, this road needs to be cleaned everyday, otherwise ash from the neighbouring thermal power plant settles on the road and makes it impossible to use it. Cleaning the road costs 1/- every day. R has to go to work in the neighbouring town and has to use this road, whereas P works in Khatmal and therefore do not use this road much. The daily income of R is 15/- and that of P is 10/-. Let x; denote the private good consumed by each citizen and m denote the amount of cleaning service provided. The cost of the private good is also 1. The utility functions of the two citizens are given by: UR = ln XR + 2ln m; Up = ln xp + ln m a. Set up the maximization problems for R and P. Let mR and mp denote the amount of road cleaning demanded by R and P, respectively. Without doing any math, describe whether you expect me and mp to be equal or different, and give two reasons for your answer. b. Solve mathematically for me and mp. What is the resulting utility of R and P? What is therefore the social surplus in the economy? The government of Khatmal is concerned that there is a market failure in the provision of road cleaning services and is considering a public provision option financed by taxes on R and P. However, the tax collector is unable to distinguish between R and P as it is each for R to disguise as P. Hence, the government is restricted to taxing everyone the same amount to finance the cleaning. I.e., if m units of cleaning are provided, everyone is charged m/2 in taxes. c. What amount of daily cleaning should the government provide to maximize social surplus (assume the government maximizes the sum of the utilities of R and P)? What would be the resulting utility of and P under this level of provision? Discuss any differences from the utilities in part b above, and also comment on any changes in social surplus. d. Does the sum of the individuals' marginal rates of substitution equal the price ratio? Why do you think? e. Now suppose that it is possible to distinguish between R and P, thus allowing differential taxation. Now how much of m does the government provide, and how is the tax burden divided? Calculate the sum of the individuals' marginal rates of substitution, and compare with part d above. Also calculate resulting individual and social surplus.
a) Maximization problem for R: max ln XR + 2ln m subject to 15 - X m - m >= 0. Maximization problem for P: max ln Xp + ln m subject to 10 - X m >= 0. If mR > mp, it would mean that R would pay more taxes but also get more benefit from the cleaning. The opposite would be true if mp > mR. Therefore, it is not clear whether mR and mp are equal or different.
b) Maximization problem for R: max ln XR + 2ln m subject to 15 - X m - m >= 0. Maximization problem for P: max ln Xp + ln m subject to 10 - X m >= 0. Solving the maximization problems, we get mR = mp = 1. The resulting utility of R is 2.3, and the resulting utility of P is 2.3. The social surplus in the economy is 1.6.
c) The government should provide 2 units of daily cleaning to maximize social surplus. The resulting utility of R is 2.38, and the resulting utility of P is 2.15. The utility of R is higher, and the utility of P is lower than in part b. The social surplus is 1.64, which is higher than in part b.
d) The sum of the individuals' marginal rates of substitution does not equal the price ratio. The reason for this is that the price ratio is the same for both individuals, but their marginal rates of substitution are not the same. Therefore, the sum of their marginal rates of substitution is not equal to the price ratio.
e) If it is possible to distinguish between R and P, the government should provide 1.5 units of daily cleaning. R should pay 0.75 in taxes, and P should pay 0.5 in taxes. The sum of the individuals' marginal rates of substitution is 3, which is higher than in part d. The resulting individual and social surplus are as follows: UR = 2.81, Up = 2.39, and social surplus = 1.42.
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Conway, Kip, and Zack are partners with capital balances as follows: Conway, $367,200; Kip, $122,400; and Zack, $244,800. The partners share incomes and losses in a 30%: 40%: 30% ratio. Young is admit
After admitting Young as a new partner, the capital balances of the partners would be as follows:
Conway: $305,000
Kip: $102,000
Zack: $204,000
Young: $0
To determine the new capital balances after admitting Young as a partner, we need to calculate the new capital contributions and adjust the existing capital balances accordingly.
The given information states that Conway, Kip, and Zack have capital balances of $367,200, $122,400, and $244,800, respectively. The income and losses are shared in a 30%:40%:30% ratio.
First, we calculate the total capital of the existing partners:
Total capital = Conway's capital + Kip's capital + Zack's capital
Total capital = $367,200 + $122,400 + $244,800
Total capital = $734,400
Next, we determine the individual capital contributions of the partners based on the given income-sharing ratio:
Conway's capital contribution = Total capital * Conway's ratio
Conway's capital contribution = $734,400 * 30%
Conway's capital contribution = $220,320
Kip's capital contribution = Total capital * Kip's ratio
Kip's capital contribution = $734,400 * 40%
Kip's capital contribution = $293,760
Zack's capital contribution = Total capital * Zack's ratio
Zack's capital contribution = $734,400 * 30%
Zack's capital contribution = $220,320
The new capital balances would be the sum of the capital contributions and the existing capital balances:
Conway's new capital balance = Conway's capital contribution + Conway's existing capital
Conway's new capital balance = $220,320 + $367,200
Conway's new capital balance = $587,520
Kip's new capital balance = Kip's capital contribution + Kip's existing capital
Kip's new capital balance = $293,760 + $122,400
Kip's new capital balance = $416,160
Zack's new capital balance = Zack's capital contribution + Zack's existing capital
Zack's new capital balance = $220,320 + $244,800
Zack's new capital balance = $465,120
Finally, since Young is being admitted as a new partner, their capital balance would initially be $0 until they make a capital contribution.
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Problem 3-12A (Algo) Nigel McCloskey is a waiter at Albicious Foods in South Carolina. He is single with one other dependent. He receives the standard tipped hourly wage. During the week ending Octobe
The payroll register for Nigel McCloskey for the week ending October 22, 20XX will include:
Regular hours: 44 hoursOvertime hours: NoneOvertime earnings: $0.00Tips: $210.00.What is Nigel McCloskey's gross pay for the week ending?To get Nigel McCloskey's gross pay, we need to consider his regular hourly wage, overtime pay, and tips.
We will calculate his regular earnings:
Regular hours worked: 44 hours
Regular hourly wage: Standard tipped hourly wage
Regular earnings = Regular hours worked x Regular hourly wage
Overtime hours worked: None (as Nigel worked 44 hours, which is within the regular hours limit)
Overtime hourly wage: Standard tipped hourly wage x 1.5
Overtime earnings = Overtime hours worked x Overtime hourly wage
Gross pay = Regular earnings + Overtime earnings + Tips.
Full question:
Nigel McCloskey is a waiter at Albicious Foods in South Carolina. He is single with one other dependent. He receives the standard tipped hourly wage. During the week ending October 22,20XX, he worked 44 hours and received $210 in tips. Calculate his gross pay, assuming his tips are included in the overtime rate determination. Complete the payroll register for Nigel McCloskey.
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A company estimates that warranty expense will be 5% of sales. The company has sales of $225,000 for the current period. The current period's entry to record the warranty expense is: OA. Warranty Expe
To record the warranty expense, the company should debit the Warranty Expense account for [tex]\$11,250[/tex] and credit the Estimated Warranty Payable account for the same amount.
The current period's entry to record the warranty expense is to debit the Warranty Expense account for [tex]\$11,250[/tex] and credit the Estimated Warranty Payable account for the same amount. This entry reflects the company's estimation that warranty expense will amount to [tex]5\%[/tex] of sales, which in this case is [tex]\$11,250[/tex] based on sales of [tex]\$225,000[/tex]. By recording this entry, the company recognizes the estimated liability for potential warranty claims and the corresponding expense. This helps ensure accurate financial reporting and reflects the company's commitment to addressing warranty obligations. The entry will be made at the end of the current period in the company's books.The journal entry to record the warranty expense for the current period is: Debit Warranty Expense $11,250 and Credit Estimated Warranty Payable [tex]\$11,250[/tex].
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Fill in the blanks in the following table, where Q is units of output, FC is fixed cost, VC is variable cost, TC is total cost, MC is marginal cost, AFC is average fixed cost, AVC is average variable
The following is the filled table, where Q is units of output, FC is fixed cost, VC is variable cost, TC is total cost, MC is marginal cost, AFC is average fixed cost, AVC is average variable cost. Output (Q) Fixed Cost (FC) Variable Cost (VC) Total Cost (TC) Marginal Cost (MC) Average Fixed Cost (AFC) Average Variable Cost (AVC) 0 $ 600 $ 0 $ 600 - - - 1 600 200 800 200 600 200 2 600 350 950 150 300 475 3 600 450 1050 100 200 350 4 600 550 1150 100 150 287.5 5 600 700 1300 150 120 260 6 600 900 1500 200 100 250 7 600 1200 1800 300 85.7 257.14 8 600 1700 2300 500 100 287.5 9 600 2700 3300 1000 200 366.67 10 600 4200 4800 1500 300 480AFC = FC/Q, AVC = VC/Q, TC = FC + VC.QTherefore,FC/Q = AFC, VC/Q = AVC, TC/Q = AC.Let's define each of the terms used in the table;Output (Q) - This is the units of productionFixed Cost (FC) - These are the costs that do not vary with the level of outputVariable Cost (VC) - These are the costs that vary with the level of outputTotal Cost (TC) - These are the total costs incurred to produce a specific output levelMarginal Cost (MC) - This is the change in total cost resulting from an additional unit of production.Average Fixed Cost (AFC) - This is the fixed cost per unit of productionAverage Variable Cost (AVC) - This is the variable cost per unit of productionTherefore, the above table is the filled form of the cost schedule or table where all the terms of the cost analysis are defined and analyzed.
Please read the "Focus on International Issues" on the top of page 120 in your textbook. After reading, please discuss why Siemen's earnings were able to increase so much faster than their revenue? What would happen if their revenue would have fallen by 9.4%?
From 2017 to 2019 nestles revenue increased only 3.1 percent, but its operating earnings increased 59.0 percent. In other words its profit grew 19 times as fast as its revenue.
class is Managerial Accounting
FOCUS ON INTERNATIONAL ISSUES COST-VOLUME-PROFIT ANALYSIS AT A SWISS COMPANY The greater the percentage of a company's total costs that are fixed, the more sensitive the company's earnings are to changes in rev- enue or volume. Operating leverage, the relationship between the changes in revenue and changes in earnings, introduced earlier, applies to companies throughout the world, large or small. Nestle Manufacturing companies often have significant fixed costs. Nestle Group, SA is a large, food manufacturing company head- quartered in Vevey, Vaud, Switzerland. Most college students will be familiar with its candy products, but it is also a major producer in infant formulas. From 2017 through 2019 Nestle's revenues increased only 3.1 percent, but its operating earnings increased 59.0 percent. In other words, its profit grew 19 times as fast as its revenue (volume). This is a classic example of the effects of fixed costs, whether measured in dollars, euros, or Swiss francs. Studying Nestle offers insight into a true global enterprise. Though headquartered in Switzerland, it does business in almost ev- ery county in the world. In 2019 it generated less than 25 percent of Klaus Ohlenschlaeger/Alamy its revenues in Europe, let alone Switzerland. Its financial statements are presented in Swiss francs (CHFs), but it does business in 11 other major currencies. Its stock is currently traded on the SIX Swiss Stock Exchange, but it can also be purchased using ADRS (American De- pository Receipts) on the over-the-counter market in the United States.
Siemens' earnings were able to increase so much faster than their revenue due to the fixed costs that were reduced over the year, and as a result, they were able to produce a higher level of earnings.
With the reduction in fixed costs, Siemens was able to cut back on expenses and streamline their business practices, leading to a faster growth in earnings. If their revenue would have fallen by 9.4 percent, Siemens would have been negatively impacted.
With the reduction in revenue, Siemens would have experienced a significant decrease in earnings, which would have hurt the company's profits. The company would have had to cut back on expenses in order to maintain its bottom line, which would have impacted the business's operations and growth moving forward. This shows that in companies where fixed costs are high, even small changes in revenue can have a significant impact on earnings, as well as the overall performance of the company.
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