For the products launched by companies to succeed, it is important that Multiple Choice marketing is aggressive and separate from other functional areas. marketing endeavors are directed solely at manipulating consumers. all the functional areas of the business are coordinated with marketing decisions. the marketing environment changes constantly. one environmental force is not interconnected with another environmental force.

Answers

Answer 1

Answer:

all the functional areas of the business are coordinated with marketing decisions.

Explanation:

A product can be defined as any physical object or material that typically satisfy and meets the demands, needs or wants of customers. Some examples of a product are mobile phones, television, microphone, microwave oven, bread, pencil, freezer, beverages, soft drinks etc.

According to the economist Philip Kotler in his book titled "Marketing management" he stated that, there are five (5) levels of a product. This includes;

1. Core benefit.

2. Generic product.

3. Expected product.

4. Augmented product.

5. Potential product.

The core benefit of a product can be defined as the basic (fundamental) wants or needs that is being satisfied, met and taken care of when a customer purchase a product.

Hence, for the products launched by companies to succeed, it is important that all the functional areas of the business are coordinated with marketing decisions.

Marketing mix can be defined as the choices about product attributes, pricing, distribution, and communication strategy that a company blends and offer its targeted markets (customers) so as to build and maintain a desired response.


Related Questions

The Clean Water Act (CWA) of 1972 did all of the following except _____.


take over the EPA's authority to impose pollution control programs

not permit pollutants to be discharged from pipes or man-made ditches into navigable waters

regulate pollutants discharged into US waters

set water-quality standards

Answers

Answer: The Clean Water Act (CWA) of 1972 did all of the following except

take over the EPA's authority to impose pollution control programs.

Answer:

The Clean Water Act (CWA) of 1972 did all of the following except _take over the EPA's authority to impose pollution control programs[held on 1990]____.

Mount Company has budgeted the following unit sales: 2019 Units January 8,000 February 10,000 March 9,000 The finished goods units on hand on December 31, 2018, was 1,000 units. It is the company's policy to maintain a finished goods inventory at the end of each month equal to 10% of next month's anticipated sales. Instructions: Prepare a production budget for February of 2019.

Answers

Answer:

    Production budget for February - Mount Company

          Particulars                                             Amount

Budgeted sales units                                       10,000

Add: Desired ending inventory                       900

(10% of following month sale)        

Total needs                                                       10,900

Less: Beginning inventory                               1,000

Budgeted Production units                            9,900

Eva Company sells one product at a price of $25 per unit. Variable expenses are 40 percent of sales, and fixed expenses are $25,000. What is the sales dollars level required to break even

Answers

Answer:

$41,667

Explanation:

Break even (Sales dollars) = Fixed Cost ÷ Contribution margin ratio

therefore

the sales dollars level required to break even is $41,667

QUESTION 1 Pure Comfort manufactures and sells mattresses with adjustable air chambers. Pure Comfort has been producing and selling approximately 500,000 units per year. Each units sells for $630, and there are no variable selling, general, or administrative costs. The company has been approached by a foreign supplier who wishes to provide the air compressor component for $95 per unit. Total annual manufacturing costs, including air compressors, is as follows: Direct materials $54,000,000 Direct labor 83,000,000 Variable factory overhead 17,000,000 Fixed factory overhead 36,000,000 If Pure Comfort outsources the air compressor, it is expected that direct materials will be reduced by 25%, direct labor by 35%, and variable factory overhead by 30%. There will be no reduction in fixed factory overhead. (a) Calculate the total cost of each option (internal and outsource). Should Pure Comfort outsource the air compressor

Answers

Yes it should outsource the air compressor

convertible bonds meaning

Answers

Answer:

A convertible Bond is a fixed-income corporate debt security that yield interest payments but also can be converted into a predetermined number of common stock or equity shares

On January 1, 2021, D Corp. granted an employee an option to purchase 6,500 shares of D's $3 par common stock at $19 per share. The options became exercisable on December 31, 2022, after the employee completed two years of service. The option was exercised on January 10, 2023. The market prices of D's stock were as follows: January 1, 2021, $36; December 31, 2022, $57; and January 10, 2023, $46. An option pricing model estimated the value of the options at $8 each on the grant date. For 2021, D should recognize compensation expense of:________
a. $ 0.
b. $26,000.
c. $117,000.
d. $19,500.

Answers

Answer:

b. $26,000

Explanation:

Calculation to determine how much D should recognize as compensation expense

Compensation expense =6,500 shares

x $8 per option / 2 years of service

Compensation expense = 52,000 / 2 years of service

Compensation expense= $26,000

Therefore For 2021, D should recognize compensation expense of:$26,000

SME Ads Inc. (SME) Steven Monahan owns SME Ads Inc., an advertising agency. At present, the company focuses on advertising only. However, Steven plans to expand the company's focus to include all the major elements of an organization's promotional mix. Steven feels that expanding the focus in such a way will allow the firm to meet customer needs in a more coordinated fashion. Currently, the firm organizes its work according to the media being used. Steven believes this is the most effective way to subdivide advertising. Since television is the most widely used advertising medium, the company spends most of its time on television advertising. SME knows what it takes to get the job done, and it is committed to success. Refer to SME Ads Inc. In developing the advertising campaign for a client, in which of the following steps should SME include the important selling points or features of the client's products?
A) Identifying and analyzing the industry.
B) Defining the advertising objectives.
C) Creating the advertising platform.
D) Determining the advertising appropriation.
E) Developing the media plan.

Answers

Answer:

SME Ads Inc.

In developing the advertising campaign for a client,

SME should include the important selling points or features of the client's products in the following step:

A) Identifying and analyzing the industry.

Explanation:

It is at this step that the SWOT analysis is carried out.  The client's selling points form part of the client's strengths.  Therefore, during the identification and analysis of the industry in which the client plays a role, its selling points or special features must be prominently developed to achieve great advert value for money.

All of the following are weaknesses of the payback period: _________

a. it uses cash flows, not income,
b. it is easy to use.
c. it ignores all cash flows after the payback period.
d. it ignores the time value of money.

Answers

Answer:

c. it ignores all cash flows after the payback period.

d. it ignores the time value of money.

Explanation:

As the name suggest, the payback period is the period that shows the time period in which the investment money could be paid back

Like we can take an example

Year  0    -$50,000

Year  1      $10,000

Year 2      $10,000

Year 3      $10,000

Year 4      $10,000

Year 5      $10,000

In this, the $50,000 would be paid back in 5 years

Now the weakness is this that it would ignored the cash flows and the times value of money

Question Instructions
- Answer all the questions provided.
- Show your calculations in detail and explain the rationale of your answers thoroughly.
- Calculators are allowed.

1. A kitchenware company asked 10 customers the number of times they used the specialty cooking equipment they bought from the company in the last month:

4 6 8 6 7 2 1 8 12 10

A) Calculate the mean number of uses in the last month.
[5 marks]

B) Calculate the standard deviation. Make sure to show your calculations.
[15 marks]


2. A drilling company has estimated a 60% chance of striking oil for their new well. A detailed test has been scheduled. Historically, 40% of successful wells have had detailed test, and 10% of unsuccessful wells have had detailed test.

A) Given that this well has been scheduled for a detailed test, what is the probability that the well will be successful? Use Bayes’ Theorem.
[10 marks]


B) Would you say that the probability of successful drilling and the probability of having a detailed test are independent? Explain your answer using probabilities.
[10 marks]


3. Answer the following questions in no more than 3-4 lines for each one:

A) Why do you think investigating sample is more efficient for statistical control than investigating an entire population?
[5 marks]

B) What sample size is large enough to assume that the sampling distribution of proportion is normally distributed?
[5 marks]


C) Can 100% confidence level be used to determine a population parameter?
[5 marks]


D) What happens to confidence intervals when the confidence level is increased?
[5 marks]





4. A company claims that the average consumer buys 50 bars of chocolate in a calendar year Suppose a random sample of 100 consumers displayed the following statistics regarding the number of chocolate bars consumed in a year: X-bar=40, S=25.

A) What are the null and alternative hypotheses to determine if the number of chocolates consumed in a year is actually more or less than 50?
[5 marks]


B) What would be the value of the test statistic in this case?
[5 marks]


C) Considering that a confidence level of 5% for a normally distributed sample corresponds to a statistic score of ±1.96, what is your inference of the outcome in (B)?
[5 marks]

D) Explain briefly what are the Type I and Type II errors.
[5 marks]


5. A research group is trying to predict the performance of students on final exams based on the amount of time students study during the year. They use the following data:

SST = 110.00
SSR = 90.25
n = 200

A) Determine the coefficient of determination r2 and interpret its meaning.
[8 marks]


B) Determine the standard error of the estimate.
[7 marks]

C) How useful do you think this regression model is for predicting the performance of students on exams by the variation of the time spent studying?
[5 marks]














































Answers

Answer:

Let x be a random variable representing the price of a Congo-imported black diamond. Let the higher price be p. Then,

P(x < p) = P(x < (p - mean)/sd) = P(x < (p - 60,430)/21,958.08) = P(z < 2)

Therefore,

(p - 60,430)/21,958.08 = 2

p - 60,430 = 2 x 21,958.08 = 43,916.16

p = 34,916.16 + 60,430 = 104.346.16

Therefore, The required price is $104,346.16

Explanation:

For the year ended December 31, 2021, Norstar Industries reported net income of $960,000. At January 1, 2021, the company had 1,050,000 common shares outstanding. The following changes in the number of shares occurred during 2021:
Apr. 30 Sold 80,000 shares in a public offering.
May 24 Declared and distributed a 5% stock dividend.
June 1 Issued 90,000 shares as part of the consideration for the purchase of assets from a subsidiary.
Required:
Compute Norstar's earnings per share for the year ended December 31, 2021. (Enter your answers in thousands. Round "EPS" answer to 2 decimal places. Do not round intermediate calculations.)

Answers

Answer:

Earning per share for the year ended December 31, 2021 on Norstar's earnings = $0.79 per share

Explanation:

Earning per share  is calculated as

Net income reported / Weighted number of outstanding shares

where,

Net income reported is  $960,000

And, the weighted number of outstanding share is

For Jan.1

Jan 1 2021 shares × stock dividend

Dividend = 100 + rate = 100 + 0.05 = 1.05

1,050,000 x 1.05=$1, 102,500

For April

April 30 shares × stock dividend× number of months / total number of months in a year

80,000 x 1.0 5 x 8/12(April 30 to December 31 = 8 months)=56,000

For June

June 1 shares × number of months/ total number of months in a year

90,000 x 7/12=56,000

Total weighted number of outstanding shares =$1,102,500+56,000+52,500= $1,211,000

 

So, the earning per share is

= 960,000 / $1,211,000  shares

= $0.79 per share

Use in your own words, what is corporate debt ?

Answers

Answer:

The corporate debt market is where companies go to borrow cash. And for over a decade, super-low interest rates left over from the 2008 financial crisis have made borrowing easier and easier. Since then, U.S. companies have regularly offered up bonds for sale, taking advantage of the cheap access to cash.

Explanation:

Hope this helps you

The Clean Air Act (CAA) of 1970 did all of the following except _____.


establish the National Ambient Air Quality Standards (NAAQS)

introduce motor vehicle emissions controls

create State Improvement Plans (SIP) to promote better air quality

reduce the federal government's enforcement authority

Answers

Answer:

The Clean Air Act (CAA) of 1970 did all of the following except ___

reduce the federal government's enforcement authority__.

Answer:

reduce the federal government's enforcement authority

Explanation:

i got it right

systems play a key role in helping organizations achieve goals, which are set forth in a(n) statement. Computers can be used by people at all levels of an organization. Workers use information systems to produce and manipulate information. Managers depend on information systems to supply data that is essential for long-term planning and short-term tactical planning. Transaction systems provide an organization with a way to collect, display, modify, or cancel transactions. These systems encompass activities such as general accounting, inventory tracking, and ecommerce. information systems typically build on the data collected by a TPS to produce reports that managers use to make the business decisions needed to solve routine, structured problems. A decision system helps workers and managers make non-routine decisions by constructing decision models that include data collected from internal and external sources. A(n) system is designed to analyze data and produce a recommendation or decision based on a set of facts and rules called a(n) base. These facts and rules can be written using an expert system shell or a programming language. A(n) engine evaluates the facts and rules to produce answers to questions posed to the system. Using a technique called logic, these systems can deal with imprecise data and problems that have more than one solution.

Answers

Answer:

The following are those which helps in playing a key role in helping organizations to achieve their goals:

O. Computers can be used by people at all levels of an organization.

O. Workers use information systems to produce and manipulate information.

O. Managers depend on information systems to supply data that is essential for long-term planning and short-term tactical planning.

O. A decision system helps workers and managers make non-routine decisions by constructing decision models that include data collected from internal and external sources.

O.  A(n) engine evaluates the facts and rules to produce answers to questions posed to the system.

O. Using a technique called logic, these systems can deal with imprecise data and problems that have more than one solution.

Explanation:

Carbon Composite Poles manufactures fishing poles that have a price of $125.00. It has costs of $90.00. A competitor is introducing a new fishing pole that will sell for $110.00. Management believes it must lower the price to $110.00 to compete in the highly cost-conscious fishing pole market. Marketing department believes that the new price will allow Carbon to maintain the current sales level of 200,000 poles per year. Required: a) What is the target cost for the new price if target operating income is 25 % of sales

Answers

Answer:

Carbon Composite Poles

The target cost for the new price if target operating income is 25% of sales is:

= $82.50.

Explanation:

a) Data and Calculations:

Current price of fishing poles = $125.00

Cost of production per unit = $90.00

Competitor's price for a new fishing pole = $110.00

Management agreed new price per fishing pole = $110

Current sales level per year = 200,000 poles

Target operating income = 25% of sales

Cost = 100 - 25% = 75%

Cost = $110 * 75%

= $82.50

Check:

25% of $110 = $27.50

Cost = $82.50

Selling price = $110 ($27.50 * $82.50)

An appliance store sells 500 units of a particular type of dishwasher each year. The demand for this product is essentially constant throughout the year. The store orders its products from a regional supplier, and it typically takes two weeks for the dishwashers to arrive after an order has been placed. Each time an order is placed, an ordering cost of $1,000 is incurred. Each dishwasher costs the hardware store $300 and retails for $550. The store's annual cost of capital is estimated to be 7% per year.
Using the economic order quantity (EOQ) formula, determine the optimal order quantity

Answers

Answer:

161 units

Explanation:

Economic order quantity = √[(2 x annual demand x orderign cost) / annual holding cost per unit]

annual demand = 500 units

ordering cost = $1,000

holding cost = $550 x 7% = $38.50

EOQ = √[(2 x 500 x $1,000) / $38.50] = 161.16 units ≈ 161 units

Sunland Company is planning to sell 1000 buckets and produce 980 buckets during March. Each bucket requires 500 grams of plastic and one-half hour of direct labor. Plastic costs $10 per 500 grams and employees of the company are paid $18 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Sunland has 200 kilos of plastic in beginning inventory and wants to have 300 kilos in ending inventory. How much is the total amount of budgeted direct labor for March?

Answers

Answer: $8820

Explanation:

The total amount of budgeted direct labor for March will be calculated thus:

Production in March = 980

Estimated labor hour = 0.5hour

Labor rate per hour = $18

Total amount of budgeted labor hour will be:

= 980 × 0.5 × $18

= $8820

Imagine that in the current year the economy is in long-run equilibrium. Then the federal government reduces its purchases of goods by 50%. In the long run, what happens to the expected price level and what impact does this have on wage bargaining

Answers

Answer:

The expected price level falls., new wage contracts will be negotiated at a lower wage in the market.

Explanation:

In the case when the economy is in the long run equilibrium and the federal government decreased the goods purchase by 50%. So in the long run the expected price level would be decline and the effect on wage bargaining would be that the new wage control would be negotiated at a less wages in the market place

Therefore, the correct option is c

And, the same would be relevant

A retail operation sells computers. Each computer retails for $499. The monthly holding cost for each computer is $4. Placing an order costs $1000, regardless of the quantity of computers ordered. The monthly demand for computers at this operation is 320. Using the basic EOQ model, the economic order quantity is

Answers

Answer:

400

Explanation:

Calculation to determine the economic order quantity is using the basic EOQ model,

Using this formula

EOQ=√(2[Demand][Order cost] / [Unit holding cost])

Where,

Demand=320

Order cost =$1,000

Unit holding cost =$4

Let plug in the formula

EOQ=√2*320*1,000/$4

EOQ=√640,000/$4

EOQ=√160,000

EOQ=400

Therefore the economic order quantity is using the basic EOQ model is 400

Janice is the sole owner of Catbird Company. In the current year, Catbird had operating income of $100,000, a long-term capital gain of $15,000, and a charitable contribution of $5,000. Janice withdrew $70,000 of profit from Catbird. How should Janice report this information on her individual tax return if Catbird Company is: An LLC? An S corporation? A C corporation?

Answers

Answer:

A. LLC

Operating income $100,000

Long-term Capital Gain $15,000

Charitable contribution $5,000

No Effect $70,000

b. S corporation

Operating income $100,000

Long-term Capital Gain $15,000

Charitable contribution $5,000

No Effect $70,000

C. C corporation

Taxable income $110,000

Dividend income $70,000

Explanation:

a. An LLC

Based on the information given She will report the OPERATING INCOME of the amount of $100,000 Schedule C.

LONG-TERM CAPITAL GAIN Schedule D of the amount of $15,000.

Thirdly in a situation where she itemizes, the amount of $5,000 which represent charitable contribution (Schedule A) will be on her tax return

Lastly the amount of $70,000 which represent the amount withdrew from profit would have no effect on her individual tax return.

b. S corporation

Based on the information given she will report the OPERATING INCOME of the amount of $100,000 Schedule E.

LONG-TERM CAPITAL GAIN Schedule D of the amount of $15,000.

Thirdly in a situation where she itemizes, the amount of $5,000 which represent CHARITABLE CONTRIBUTION (Schedule A) will be on her tax return

Lastly the amount of $70,000 which represent the amount withdrew from profit would have no effect on her individual tax return.

c. C corporation

Based on the information given the TAXABLE INCOME of the amount of $110,000 calculated as ($100,000+$15,000-$5,000) will be reported by Catbird Company on FORM 1120 while Janice on the other hand will have to report DIVIDEND INCOME Schedule B of the amount of $70,000 on her tax return.

You own a small manufacturing business that produces widgets. You have spent $150,000 acquiring the fixed assets you need to produce widgets. Each widget costs you $2 to make and they sell for $15 each, so your variable cost is 13.3% of the overall revenue. At your current level of operating leverage, how many widgets must you sell to break even

Answers

Answer:

11,538 units

Explanation:

Given that:

Fixed assets = $150,000

Variable cost = $2

Sales price = $15

Break even point = Fixed cost ÷ Contribution margin

Contribution margin = Sales per unit - Variable cost per unit = $15 - $2 = $13

Break even point (Sales) = $150,000 ÷ $13 = 11,538 units

Therefore, 11,538 widgets must be sold to break even.

Once the adjusting entries are posted, the adjusted trial balance is prepared to a. verify that the debits and credits are in balance b. verify that the net income (loss) is correct for the period c. verify the correct flow of accounts into the financial statements d. verify that the net income correctly flows into the statement of stockholders' equity from the income statement

Answers

Answer:

a. verify that the debits and credits are in balance

Explanation:

A periodic system of inventory can be defined as a method of financial accounting, that typically involves updating informations about an inventory on a periodic basis (at specific intervals) as the sales or purchases are being made by the customers, through the use of either an enterprise management software applications or a digitized point-of-sale equipment.

On the other hand, a perpetual inventory system is a type of inventory management that continuously records in real-time the amount of inventory sold or purchased through the use of enterprise software or technological software applications such as a point of sale (POS).

A journal entry involves the process of keeping the records of business transactions made by an organization.

The journal entry is used by bookkeepers and accountants. Ideally, it is important that a journal has all of following informations; date, reference number, debit balance, credit balance and transaction description.

In Accounting, most businesses use a double-entry account system and as such, the total amount debited must equal the total amount credited in a journal entry.

Once the adjusting entries are posted, the adjusted trial balance is prepared to verify that the debits and credits are in balance.

A business owned and run by one person is called a(n)

Answers

a business owned and run by one person is called a(n)

sole proprietorship

On January 22, Jefferson County Rocks Inc., a marble contractor, issued for cash 210,000 shares of $30 par common stock at $34, and on February 27, it issued for cash 15,000 shares of preferred stock, $9 par at $12.

Required:
Journalize the entries for January 22 and February 27.

Answers

Answer:

Jan. 22

Dr Cash $7,140,000

Cr Common Stock $6,300,000

Cr Paid in capital in excess of par $840,000

Feb. 27

Dr Cash $180,000

Cr Preferred Stock $135,000

Cr Paid-In Capital in Excess of Par-Preferred $45,000

Explanation:

Preparation of the entries for January 22 and February 27.

Jan. 22

Dr Cash $7,140,000

(210,000*$34)

Cr Common Stock $6,300,000

(210,000*$30)

Cr Paid in capital in excess of par $840,000

($7,140,000-$6,300,000)

Feb. 27

Dr Cash $180,000

(15,000*$12)

Cr Preferred Stock $135,000

(15,000*$9)

Cr Paid-In Capital in Excess of Par-Preferred $45,000

($180,000-$135,000)

Qu. 13-54 (Algo) Otool Incorporated is considering using stocks of an old raw material... Otool Incorporated is considering using stocks of an old raw material in a special project. The special project would require all 160 kilograms of the raw material that are in stock and that originally cost the company $1,536 in total. If the company were to buy new supplies of this raw material on the open market, it would cost $7 per kilogram. However, the company has no other use for this raw material and would sell it at the discounted price of $6.75 per kilogram if it were not used in the special project. The sale of the raw material would involve delivery to the purchaser at a total cost of $79 for all 160 kilograms. What is the relevant cost of the 160 kilograms of the raw material when deciding whether to proceed with the special project

Answers

Answer:

Otool Incorporated

The relevant cost of the 160 kilograms of the raw material when deciding whether to proceed with the special project is:

= $1,001.

Explanation:

a) Data and Calculations:

Cost of 160 kilograms of the raw material = $1,536

Cost of new supplies of the raw material = $7 per kilogram

= $1,120 ($7 * 160)

Price at which the raw material could be sold = $6.75

Total = $1,080 ($6.75 * 160)

Delivery cost cost from sale of the raw material = $79

Net revenue to be recovered from the sale = $1,001.

The relevant cost is the lower of the replacement cost or the net realizable value. That the lower of $1,120 or $1,001.

Jack, Jill and Maritza are employed as sales persons for Deuce Hardware Supplies. None was hired for a definite period and each has an excellent sales record. Jack was terminated because Don Deuce, the president of Deuce Hardware, decided that customers were more likely to spend more if the sales person was an attractive woman, rather than a man. Jill was terminated for cheating on her expense account. Assuming only these facts, explain, separately whether Jack or Jill has any claim against Deuce Hardware.

Answers

Answer:

Jack has claim while Jill didn't have.

Explanation:

Jack has claim against Deuce Hardware because his performance is tremendous and make more sales for the company. He done his work very well so he can claim against Deuce Hardware Supplies while on the other hand, Jill has no claim against Deuce Hardware because he commit a crime on the basis of which the company has the authority to terminate him from the job. He works very well in the company but his crime is big enough to terminate him.

Mighty Manny, Incorporated manufactures ice scrapers and distributes them across the midwestern United States. Mighty Manny is incorporated and headquartered in Michigan. It has product sales to customers in Illinois, Indiana, Iowa, Michigan, Minnesota, and Wisconsin. It has sales personnel only where discussed. Determine the state in which Mighty Manny does not have sales and use tax nexus given the following scenarios: _____________
A) Mighty Manny is incorporated and headquartered in Michigan. It also has property, employees, sales personnel, and intangibles in Michigan.
B) Mighty Manny has a warehouse in Illinois.
C) Mighty Manny has independent sales representatives in Minnesota. The representatives distribute ice scraper-related items for over a dozen companies.
D) Mighty Manny has two customers in Wisconsin. Mighty Manny receives orders over the phone and ships goods to its customers using FedEx.

Answers

Answer:

The answer is "Choice D".

Explanation:

FedEx Express has developed or continued being a pioneer in high level, providing quick, which remains the global leader offering quick, efficient, or timely delivery to even more than 220 countries that connect more than 99% of the world's largest gross national product with markets, that's why the Two customers are in Wisconsin for Mighty Manny. Mighty Manny accepts phone orders or ships products via FedEx to its customers.

Gallatin County Motors Inc. assembles and sells snowmobile engines. The company began operations on July 1 and operated at 100% of capacity during the first month. The following data summarize the results for July: 1 Sales (38,000 units) $9,500,000.00 2 Production costs (44,000 units): 3 Direct materials $4,400,000.00 4 Direct labor 1,760,000.00 5 Variable factory overhead 1,100,000.00 6 Fixed factory overhead 660,000.00 7,920,000.00 7 Selling and administrative expenses: 8 Variable selling and administrative expenses $1,170,000.00 9 Fixed selling and administrative expenses 200,000.00 1,370,000.00 Required: a. Prepare an income statement according to the absorption costing concept\.\* b. Prepare an income statement according to the variable costing concept\.\* c. What is the reason for the difference in the amount of Operating income reported in (a) and (b)

Answers

Answer:

a.

income statement according to the absorption costing concept.

Sales                                                                  $9,500,000.00

Less Cost of Sales                                           ($6,840,000.00)

Gross Profit                                                       $2,660,000.00

Less Expenses

Variable selling and administrative expenses ($1,170,000.00)

Fixed selling and administrative expenses       ($200,000.00)

Net Income                                                          $1,290,000.00

b.

income statement according to the variable costing concept

Sales                                                                  $9,500,000.00

Less Cost of Sales                                           ($6,270,000.00)

Contribution                                                      $3,230,000.00

Less Expenses

Fixed factory overhead                                      ($660,000.00)

Variable selling and administrative expenses ($1,170,000.00)

Fixed selling and administrative expenses       ($200,000.00)

Net Income                                                          $1,200,000.00

c.

The difference is due to fixed cost included in closing inventory under the absorption costing concept.

Explanation:

Production Cost - Absorption Costing

Direct materials                                $4,400,000.00

Direct labor                                       $1,760,000.00

Variable factory overhead                $1,100,000.00

Fixed factory overhead                      $660,000.00

Total                                                  $7,920,000.00

therefore,

Cost of Sales = 38,000 units/ 44,000 units x $7,920,000.00

                      = $6,840,000

Production Cost - Variable Costing

Direct materials                                $4,400,000.00

Direct labor                                       $1,760,000.00

Variable factory overhead                $1,100,000.00

Total                                                  $7,260,000.00

therefore,

Cost of Sales = 38,000 units/ 44,000 units x $7,260,000.00

                      = $6,270,000

a. Income Statement according to Absorption Costing Concept:

Sales: $9,500,000.00

Cost of Goods Sold:

Direct Materials: $4,400,000.00

Direct Labor: $1,760,000.00

Variable Factory Overhead: $1,100,000.00

Fixed Factory Overhead: $660,000.00

Total Manufacturing Costs: $7,920,000.00

Gross Profit: $1,580,000.00

Selling and Administrative Expenses:

Variable Selling and Administrative Expenses: $1,170,000.00

Fixed Selling and Administrative Expenses: $200,000.00

Total Selling and Administrative Expenses: $1,370,000.00

Operating Income: $210,000.00

b. Income Statement according to Variable Costing Concept:

Sales: $9,500,000.00

Variable Costs:

Direct Materials: $4,400,000.00

Direct Labor: $1,760,000.00

Variable Factory Overhead: $1,100,000.00

Variable Selling and Administrative Expenses: $1,170,000.00

Total Variable Costs: $8,430,000.00

Contribution Margin: $1,070,000.00

Fixed Costs:

Fixed Factory Overhead: $660,000.00

Fixed Selling and Administrative Expenses: $200,000.00

Total Fixed Costs: $860,000.00

Operating Income: $210,000.00

In absorption costing, fixed manufacturing overhead is treated as a product cost and is included in the cost of goods sold. This means that a portion of fixed overhead is allocated to each unit produced, resulting in higher inventory values and a higher cost of goods sold.

In variable costing, fixed manufacturing overhead is treated as a period cost and is not included in the cost of goods sold. It is instead expensed in the period incurred. This means that fixed overhead is only expensed when it is incurred and is not allocated to units in inventory.

Since the number of units produced (44,000 units) exceeded the number of units sold (38,000 units), the fixed overhead allocated to the 6,000 unsold units under absorption costing contributes to the difference in reported operating income between the two methods. In this case, the absorption costing method reports higher operating income due to the allocation of fixed overhead to units in inventory.

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A portfolio is worth $902,654 and has a duration of 5.77 years. The futures price for a June Treasury note futures contract is 115 and each contract is for the delivery of bonds with a face value of 100,000. On the delivery date the duration of the cheapest to deliver bond is 4.36 years. To hedge the interest rate risk, how many June T note futures do you have to enter short positions on

Answers

Answer:

10.39

Explanation:

How many June T note futures do you have to enter short positions on?

The June T note futures we have to enter short positions on is calculated as:

= Portfolio duration*Portfolio value/(Futures price*Face value/100)*1/Duration of cheapest to deliver bond

= 5.77*$902,654 / (115*1000) * 1/4.36

= 5208313.58/115000*0.2293577981651376

= 10.38754204228161

= 10.39

COTB MC Qu. 8-31 (Static) Assume a company is preparing a... Assume a company is preparing a budget for its first two months of operations. During the first and second months it expects credit sales of $50,000 and $60,000, respectively. The company expects to collect 40% of its credit sales in the month of the sale and the remaining 60% in the following month. What amount of accounts receivable would the company report in its balance sheet at the end of the second month

Answers

Answer:

$36,000

Explanation:

The computation of the amount of the account receivable that should be reported at the end of the second month is shown below;

= Credit sales of the second month × following month percentage

= $60,000 × 0.60

= $36,000

By multiplying the credit sales of the second month with the following month percentage, the amount of the account receivable could come

Hence, the same would be relevant

Accents Associates sells only one product, with a current selling price of $130 per unit. Variable costs are 60% of this selling price, and fixed costs are $40,000 per month. Management has decided to reduce the selling price to $125 per unit in an effort to increase sales. Assume that the cost of the product and fixed operating expenses are not changed by this reduction in selling price. At the current selling price of $130 per unit, what dollar volume of sales per month is required for Accents to earn a monthly operating income of $20,000

Answers

Answer:

Break-even point (dollars)= $150,000

Explanation:

Giving the following information:

Selling price= $130

Unitary variable cost= 130*0.6= $78

Fixed costs= $40,000

Desired profit= $20,000

To calculate the sales in dollars to reach the desired profit, we need to use the following formula:

Break-even point (dollars)= (fixed costs + desired profit) / contribution margin ratio

Break-even point (dollars)= (20,000 + 40,000) / [(130 - 78) / 130]

Break-even point (dollars)= 60,000 / 0.4

Break-even point (dollars)= $150,000

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