Answer: A. Penelope may have difficulty managing all aspects of a small business alone.
Explanation:
Entrepreneurs generally have to run a business by themselves at first and this requires managing all aspects of the business especially when it is a small firm like Penelope's art gallery.
This will be especially tough for those who do not have managerial training like Penelope and would lead to them having difficulty in managing all the aspects of the business in an efficient enough way to grow the business and get returns.
Which of the following illustrates Forward Vertical Integration? a. Subway sandwich company buying a bakery to make the bread for their sandwiches b. Sony buying trucks to deliver their finished goods inventories to their customers' warehouses c. Ford automotive buying additional machines for production d. Microsoft starting a new division that designs and manufactures clothing
Answer:
a
Explanation:
Vertical integration is when a firm acquires a business further in its production chain. For example, a sandwich company purchasing a bakery
Subway sandwich company buying a bakery to make the bread for their sandwiches illustrates Forward Vertical Integration. Thus, Option (A) is correct.
Forward vertical integration occurs when a company acquires or integrates a business that is closer to the end consumer or customer in the supply chain.
In the case of the Subway sandwich company buying a bakery to make the bread for their sandwiches, it represents forward integration because it involves bringing a crucial part of the supply chain, the bakery, under Subway's ownership.
By owning the bakery, Subway can have direct control over the production of bread, ensuring quality, consistency, and timely supply of their sandwiches.
This integration allows Subway to streamline its operations, reduce dependency on external suppliers, and potentially gain cost savings. It also strengthens Subway's brand identity and customer experience by offering freshly baked bread made in-house
Thus, Option (A) best illustrates the concept of Forward Vertical Integration among the options given.
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what are the market trends and growth of netflix
A manufacturing process consists of three processes. Step 1 requires 10 minutes per unit, step 2 requires 6 minutes per unit and step 3 requires 7 minutes per unit. 40% of units that complete the third step require rework, which means those units must start the process over at step 2 (processing times are the same for units being reworked) and rework is always successful. Demand at the shop is 0.4 units per minute.What is the capacity of the shop (in units per units per minute)?
Answer: 0.1 units per minute
Explanation:
Step 1 time = 10 minutes per unit
Step 2 time = 6 minutes + (0.4 * 6 minutes for those units reworked)
= 8.4 minutes
Step 3 time = 7 minutes + (0.4 * 7 minutes for those units reworked)
= 9.8 minutes
Step 1 will determine the process capacity because it is the one that takes the most time and therefore is the bottleneck process.
Capacity of process = 1 / Bottleneck minutes
= 1 / 10
= 0.1 units per minute
Assume you are the internal controls expert for your company. Your boss has read about Madoff’s Ponzi scheme described in our textbook. Your boss is now worried that your own company, which invests a significant amount of retirement funds for its employees, could fall victim to a similar scheme. He has just sent you a memo asking: "Which specific internal controls should our company adopt to avoid falling for a scheme like this?" Respond with a memo to your boss detailing at least three internal controls that you would recommend implementing at your company, assuming none are in place right now, to minimize the risk of becoming the victim of an investment fraud. For each internal control you recommend provide: A detailed description of the policy or procedure to be implemented. An explanation of how specifically it would mitigate the risk of being defrauded. A description of any disadvantages the internal control may have. After submitting your own initial post, change hats! Now assume you are the boss; read your classmates recommendations and question/challenge them as an effective boss would.
Answer:
There are many measures a company can undertake to uplift the standards of internal controls, however few of those are enumerated as under -
1. Due Diligence - almost everyone would suggest it but the implementation differs from company to company. The term encompasses wide activities i.e. from improving quality of internal audit to upkeeping of financial records etc. Keeping a check on existing & old investment pattern would certainly help in analyzing the response of investments as per prevailing market condition. Disadvantages of the process include involvment of additional manpower and cost.
2. Choosing right Investment firms and/or Fund Manager - In the complex business market which prevails today, finding the right guy seems to be a difficult job. It is important that we carefully study not only the investment patterns and subsequent returns of the Investment firms / Fund Manager but also background, qualifications and previous legal records to arrive at suitable guy for suitable job. Sometimes we choose a skeptical but a honest guy, which may lead to sacrifice in short term gains but particulary in retirement funds with long term goals, security of funds assume priority.
3. Selecting the financial products - Today there are numerous financial products available in the market, many of them offer fancy returns but the goals of such financial products must be re-aligned to the goals of the company and its employees. For the company a decent return over long run with high degree of security is the objective when it comes to retirement funds. The financial product must have an appropriate mix of debt, equity and liquid funds and particularly the component of debt must increase with the age of an employee which will ensure security of funds by the time he attains superannuation. Disadvantage majorly includes loss of returns due to less investment in equity during the final stages of career.
Explanation:
Manufacturing cost data for Orlando Company, which uses a job order cost system, are presented below. Indicate the missing amount for each letter. Assume that in all cases manufacturing overhead is applied on the basis of direct labor cost and the rate is the same. (Round overhead rate to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 5,275.)
Case A Case B Case C
Direct materials used $ (a) $91,200 $69,000
Direct labor 52,200 143,800 (h)
Manufacturing overhead applied 42,804 (d) (i)
Total manufacturing costs 149,800 (e) 216,100
Work in process 1/1/14 (b) 21,300 18,400
Total cost of work in process 208,600 (f) (j)
Work in process 12/31/14 (c) 11,900 (k)
Cost of goods manufactured 193,500 (g) 232,600
Answer:
(a) $54796 (b) $58,800 (c) $ 15100 (d) $117916 (e) $ 352916 (f) $ 374216
(g) $326316 (h) $ 82824.18 (i) $ 64276.82 (j) $234500 (k) $1900
Explanation:
The calculations are as follows.
Case A Case B Case C
Direct materials used $ (a) 54796 $91,200 $69,000
Direct labor 52,200 143,800 (h) 82824.18
Manufacturing overhead applied 42,804 (d)117916 (i)64276.82
Total manufacturing costs 149,800 (e) 352916 216,100
Working
The following formula is used to find the missing values :
Total MFG Cost= DM + DL+ MFG OH
a) 149800- 42804-52200= 54796
d) Ratio of MfgOH to DL= 42,804/52,200= 0.82
Mfg Overhead for Case 2= 0.82* 143,800= 117916
e) 91,200+ 143,800+ 117916= 352916
h+i) Conversion Costs for Case 3= 216100-69000=147100
Mfg OH is 82% of DL
Total Conversion Cost will be 1.82
1.82x= 147100
x= 147100/1.82
x= 82,824.18
h)DL= 82824.18
i) MFG OH= CC- DL= 147100- 82824.18= 64276.82
Work in process 1/1/14 (b) 58,800 21,300 18,400
Total cost of work in process 208,600 (f) 374216 (j)234500
Working
The following formula is used to find the missing values
Total WIP Cost- Total MFG Cost= Opening WIP
b)Total WIP Cost- Total MFG Cost= 208600-149800= 58,800
f) Total MFG Cost+ WIP= 352916 + 21,300 =374216
j) Total MFG Cost+ WIP=216,100 + 18,400= 234500
Work in process 12/31/14 (c) 15100 11,900 (k)1900
Cost of goods manufactured 193,500 (g) 326316 232,600
Working
The following formula is used to find the missing values
Total WIP-CGS= Ending WIP
c) Total WIP-CGS= 208600-193500 = 15100
g) Total WIP- Ending WIP= 374216- 11,900 = 326316
k) Total WIP-CGS=234500- 232,600 = 1900
After filling in the blanks:
Case A Case B Case C
Direct materials used $ (a) 54796 $91,200 $69,000
Direct labor 52,200 143,800 (h) 82824.18
Manufacturing overhead applied 42,804 (d)117916 (i)64276.82
Total manufacturing costs 149,800 (e) 352916 216,100
Work in process 1/1/14 (b) 58,800 21,300 18,400
Total cost of work in process 208,600 (f) 374216 (j)234500
Work in process 12/31/14 (c) 15100 11,900 (k)1900
Cost of goods manufactured 193,500 (g) 326316 232,600
How can you make positive economic choices?
Answer:
All choices require giving up something in your life whether that is friends or family, or things that you really want. Economic choices require you to think do you really want this and what is the benifit out of it, like what do you get out of making this decision. The economic things are what will be produced, how will it be produced, and how will the output society produces be distributed
Explanation:
Division A offers its product to outside markets for $30. It incurs variable costs of $11 per unit and fixed costs of $75,000 per month based on monthly production of 4,000 units. Division B can acquire the product from an alternate supplier for $31 per unit or from Division A for $30 plus $2 per unit in transportation costs in addition to the transfer price charged by Division A.Required:a. What are the costs and benefits of the alternatives available to Division A and Division B with respect to the transfer of Division A's product? Assume that Division A can market all that it can produce.b. How would your answer change if Division A had idle capacity sufficient to cover all of Division B's needs?
Answer:
a. See part a below for the analysis.
b. We have:
1. Division A total cost = $1,131,000
2. Division A total profit or benefit = $1,509,000
3. Division B total cost = $1,320,000
4. Division A total profit or benefit = $44,000
Explanation:
Note: See the attached excel file for the calculation of calculation of costs and benefits of options available to Divisions A and B.
a. What are the costs and benefits of the alternatives available to Division A and Division B with respect to the transfer of Division A's product? Assume that Division A can market all that it can produce.
Under this condition, each analysis is based on the condition that either Division A or Division B will pay for the transportation cost.
From part a the attached excel file, we have:
1. Division A will incur a total cost of of $559,000 and gets a profit or benefit of $761,000 if it sells to the outside market.
2. Division A will incur a total cost of of $647,000 and gets a profit or benefit of $673,000 if it sells to Division B.
3. Division B will incur a total cost of $1,408,000 if it buys from Division A.
4. Division B will incur a total cost of $1,364,000 if it buys alternate supplier. It thereby saves the transportation cost of $88,000 of buying from A as a benefit.
b. How would your answer change if Division A had idle capacity sufficient to cover all of Division B's needs?
Under this condition, it is assumed that Division A will pay for the transportation cost. Therefore, Division A will sell to both the outside market and Division B.
From part b of the attached excel file, we will have the following based on this condition:
1. Division A total cost = Total cost of selling to the outside market + Total cost of selling to Division B = $559,000 + $572,000 = $1,131,000
2. Division A profit or benefit cost = Total profit or benefits of selling to the outside market + Total profit or benefits of selling to Division B = $761,000 + $748,000 = $1,509,000
3. Division B will incur a total cost of $1,320,000 by buying from Division A. It thereby saves $44,000 (i.e. $1,364,000 - $1,320,000 = $44,000) as a benefit for not buying from alternate supplier.
Woolsey Corporation, a U.S. company, expects to sell goods to a British customer at a price of 250,000 pounds, with delivery and payment to be made on October 24. On July 24, Woolsey purchased a three-month put option for 250,000 British pounds and designated this option as a cash flow hedge of a forecasted foreign currency transaction expected to be completed in late October. The following exchange rates apply:
Option Strike Price = $2.17
Option Cost : $4,000
July 24th Spot Rate : $2.17
October 24th Spot Rate :$2.13
October 24th Option Premium : $.04
What amount will Woolsey include as Adjustment to Net Income for the period ended October 31?
A. $6,000 positive.
B. $6,000 negative.
C. $10,000 positive.
D. $10,000 negative.
E. $14,000 positive.
Answer:
C. $10,000 positive.
Explanation:
The computation of the amount that should be included is shown below:
= (Option strike price - spot rate) × purchased put options
= ($2.17 - $2.13) × 250,000
= $10,000
As the spot rate is less than the strike price so automatically there is a gain of $10,000
Hence, the option c is correct
Which of the statements is true of the prisoner's dilemma? In the game that includes two prisoners, from which this game derives its name, neither prisoner will confess and they will both walk free. The prisoner's dilemma is an example of a cooperative equilibrium. In the prisoner's dilemma, firms could do better if they both did exactly the opposite of what they ultimately choose to do. One player has a dominant strategy and the other has a mixed strategy.
Answer: In the prisoner's dilemma, firms could do better if they both did exactly the opposite of what they ultimately choose to do.
Explanation:
The prisoner's dilemma is simply an analysis in the game theory which reveals the reasons for the lack of cooperation between two rational individuals.
We should note that in the prisoners dilemma, it'll have been in the best interest of the parties to agree and cooperate. The firms choose the strategies which makes them better off at the expense of the other firm who's worse off but they could have been better if they both did exactly the opposite of what they ultimately choose to do.
Its prevailing technique of both the inmates and the Nash equilibrium inside the prisoner's conundrum was (cheat, cheat). Both would be worse off with only one year in prison if they had chosen the opposite conclusion, that is, not confessing.
This prisoner's dilemma was essentially an analysis of game theory, that reveals the reasons for the absence of collaboration among two rational individuals.It mentions a prisoner's dilemma, or how it would've been in the best interests of all parties agreeing and cooperating. Firms choose methods that benefit them at the expense of other firms. It might've been better if they would have done the exact opposite of what they finally opted to do.Therefore, the final answer is "Third choice".
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The following data were gathered to use in reconciling the bank account of Lays Company: Balance per bank $ 18,550 Balance per company records 10,030 Bank service charges 40 Deposit in transit 3,050 Note collected by bank with $190 interest 4,750 Outstanding checks 6,860 a. What is the adjusted balance on the bank reconciliation
Answer:
$13,840
Explanation:
Bank reconciliation Statement
Balance per company records $10,030
Add unpresented checks $ 6,860
Less Lodgements ($3,050)
Balance as per Bank Statement $13,840
the adjusted balance on the bank reconciliation is $13,840
If two countries have identical production possibility frontiers, then A. there is no scope for trade B. they have different opportunity costs of production. C. there is a set of prices at which both countries will gain from trade D. they have identical marginal products of labor
The amount of resources used in an activity-based costing (ABC) system for a specific activity is computed by multiplying the ______________ (chapter 10) A. cost driver rate and the actual cost driver volume B. cost driver rate and the planned cost driver volume C. overhead rate and the actual cost driver volume D. overhead rate and the planned cost driver volume
Answer: A. cost driver rate and the actual cost driver volume
Explanation:
When using activity-based costing, the cost for an activity is based on the cost driver rate, which is the cost per unit of the activity, and the actual cost driver volume which is how many units was used in the activity.
For instance, if the cost driver rate for marketing is $8 per unit and 50 units were produced - actual cost driver volume- then the cost of marketing would be:
= 8 * 50
= $400
Hubert lives in New York City and runs a business that sells boats. In an average year, he receives $723,000 from selling boats. Of this sales revenue, he must pay the manufacturer a wholesale cost of $423,000; he also pays wages and utility bills totaling $267,000. He owns his showroom; if he chooses to rent it out, he will receive $2,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Hubert does not operate this boat business, he can work as a financial advisor, receive an annual salary of $20,000 with no additional monetary costs, and rent out his showroom at the $2,000 per year rate. No other costs are incurred in running this boat business.
Identify each of Darnell's costs given below as either an implicit cost or an explicit cost of selling pianos.
a. The rental income Darnell could receive if he chose to rent out his showroom
b. The wages and utility bills that Darnell pays
c. The salary Darnell could earn if he worked as a financial advisor
d. The wholesale cost for the pianos that Darnell pays the manufacturer
Answer:
A. the rental incomw darnell could receive if he choose to rent out his showroom
Kayak Co. budgeted the following cash receipts (excluding cash receipts from loans received) and cash payments (excluding cash payments for loan principal and interest payments) for the first three months of next year. Cash Receipts Cash payments January $ 518,000 $ 461,500 February 403,000 346,500 March 467,000 523,000 According to a credit agreement with its bank, Kayak requires a minimum cash balance of $50,000 at each month-end. In return, the bank has agreed that the company can borrow up to $150,000 at a monthly interest rate of 1%, paid on the last day of each month. The interest is computed based on the beginning balance of the loan for the month. The company repays loan principal with any cash in excess of $50,000 on the last day of each month. The company has a cash balance of $50,000 and a loan balance of $100,000 at January 1. Prepare monthly cash budgets for January, February, and March. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.)
Answer:
a. Ending Cash Balance:
January = 50,000
February = 61,555
March = 50,000
b. Loan Balance End of Month:
January = 44,500
February = $0
March = $44,445
Explanation:
Note: The merged data given in the question are sorted before answering the question as follows:
Cash Receipts Cash payments
January $ 518,000 $ 461,500
February 403,000 346,500
March 467,000 523,000
Explanation of the answer is now given as follows:
Note: See the attached excel file for the cash budget.
In the attached excel file, the following calculations are made:
January loan repayment = January Preliminary cash balance - Minimum required cash balance = $105,500 - $50,000 = $55,500
March Additional loan = Minimum required cash balance - March Preliminary cash balance = $50,000 - $5,555 = $44,445
From the attached excel file, we have:
a. Ending Cash Balance:
January = 50,000
February = 61,555
March = 50,000
b. Loan Balance End of Month:
January = 44,500
February = $0
March = $44,445
plies manufacturing overhead at the rate of $40 per machine hour. Budgeted machine hours for the current period were anticipated to be 120,000; however, a lengthy strike resulted in actual machine hours being worked of only 90,000. Budgeted and actual manufacturing overhead figures for the year were $4,800,000 and $4,180,000, respectively. On the basis of this information, the company's year-end overhead was:
Answer:
$580,000 under applied.
Explanation:
The computation of the company's year end overhead is seen below;
The applied overhead is
= Predetermined overhead rate × actual machine hours
= $40 × 90,000
= $3,600,000
Then, the applied overhead
= $4,180,000 - $3,600,000
= $580,000
Hence, the ending overhead is $580,000 under applied
Single Plantwide Factory Overhead Rate Scrumptious Snacks Inc. manufactures three types of snack foods: tortilla chips, potato chips, and pretzels. The company has budgeted the following costs for the upcoming period: Factory depreciation $9,472 Indirect labor 23,475 Factory electricity 2,677 Indirect materials 5,560 Selling expenses 13,179 Administrative expenses 7,413 Total costs $61,776 Factory overhead is allocated to the three products on the basis of processing hours.The products had the following production budget and processing hours per case: Budgeted Processing Hours Volume (Cases) Per Case Tortilla chips 3,000 0.25 Potato chips 6,000 0.10 Pretzels 3,500 0.30 Total 12,500 If required, round all per unit answers to the nearest cent. Determine the single plantwide factory overhead rate. $ 86.25 X per processing hour.
Answer:
The single plantwide overhead rate= $4.94
Explanation:
The single factory wide overhead absorption rate is that which is used to charge overhead to different product units. The amount to be charged to units would depend on the number of processing hours required
The single plantwide overhead rate = Budgeted overhead/Budgeted processing hours
= 61,776/12,500=$4.94 per hour
The single plantwide overhead rate= $4.94
Expected cash dividends are $4.00, the dividend yield is 8%, flotation costs are 6% of price, and the growth rate is 5%. Compute the approximate cost of new common stock. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Explanation:
[tex]\text { Dividend, } \mathrm{D}= 4 \\\text { Dividend yield rate }=\mathrm{D} / \text { Current price }=8 % \\\text { Current price }, \mathrm{P} 0=\mathrm{D} / 8 \%=\$ 4 / 8 \%=$ 50[/tex]
[tex]\text { Flotation cost, } \mathrm{F}=8 \% \text { of current price }=\$ 50 * 8 \%=\$ 4 \\ \text { Growth rate,g }=4 % \\ \text { Cost of new common stock, } \mathrm{Ke}=[\mathrm{D} 1 /(\mathrm{P} 0-\mathrm{F})]+\mathrm{g} \\ =[\$ 4 /(\$ 50-\$ 4)]+4 \% \\ =0.086956522+0.04 \\ =0.126956522=12.7 \% \text {(Rounded) }[/tex]
12.7%
Annenbaum Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 400 units. The costs and percentage completion of these units in beginning inventory were: Cost Percent Complete Materials costs $ 5,700 65% Conversion costs $ 6,800 45% A total of 6,500 units were started and 5,900 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: Cost Materials costs $ 125,500 Conversion costs $ 207,000 The ending inventory was 50% complete with respect to materials and 35% complete with respect to conversion costs. The total cost transferred from the first processing department to the next processing department during the month is closest to: (Round your intermediate calculations to 3 decimal places.)
Answer:
Annenbaum Corporation
The total cost transferred from the first processing department to the next processing department during the month is closest to:
= $322,022.
Explanation:
a) Data and Calculations:
Units in Beginning WIP Inventory 400
Units started in the period 6,500
Units transferred out 5,900
Units in Ending WIP Inventory 1,000
Materials costs Conversion costs
Beginning WIP Inventory $ 5,700 (65%) $ 6,800 (45%)
Costs added during month 125,500 207,000
Total costs of production $131,200 $213,000
Equivalent units: Materials Conversion
Units transferred out 5,900 5,900 (100%)
Ending WIP Inventory 500 (50%) 350 (35%)
Total equivalent units 6,400 6,250
Cost per equivalent units: Materials Conversion
Total costs of production $131,200 $213,000
Total equivalent units 6,400 6,250
Cost per equivalent unit $20.50 $34.08
Cost assigned to:
Materials costs Conversion costs Total
Units transferred out $120,950 $201,072 $322,022
($20.5*5,900) ($34.08**5,900)
Ending WIP Inventory $10,250 $11,928 $22,178
($20.5*500) ($34.08**350)
Discuss the negative impact of piracy on businesses.
Davis Company uses a standard cost system for its production process and applies overhead based on direct labor hours. The following information is available for September when Davis produced 5,000 units: Standard: DLH per unit 3.00 Variable overhead per DLH $1.80 Fixed overhead per DLH $3.25 Budgeted variable overhead $27,250 Budgeted fixed overhead $49,500 Actual: Direct labor hours 16,000 Variable overhead $31,325 Fixed overhead $49,750 Refer to Davis Company. Using the four-variance approach, what is the variable overhead efficiency variance
Answer:
$1,800
Explanation:
Calculation to determine the variable overhead efficiency variance
Using this formula
VOH Efficiency Variance = Budgeted VOH based on Actual - Budgeted VOH/Standard Qty
Let plug in the formula
VOH Efficiency Variance = ((16,000 * $1.80/hr) - ((5,000 * 3.00hrs/unit * $1.80/hr))
VOH Efficiency Variance = $(28,800.00 - $27,000.00)
VOH Efficiency Variance = $1.800
Therefore Using the four-variance approach, what is the variable overhead efficiency variance will be $1,800
Tri-State Mill uses a special sander to finish lumber. Data on the sander and its usage follow. Cost Driver Rate Cost Driver Volume Resources used Energy $ 0.90 per machine-hour 6,000 machine-hours Repairs $ 16.00 per job 600 jobs Resources supplied Energy $ 6,900 Repairs 12,000 Required: Compute unused resource capacity in energy and repairs for Tri-State Mill.
Answer and Explanation:
The computation of the unused resource capacity in energy and repairs for Tri-State Mill. is shown below;
For energy
= $6,900 - 6,000 × $0.90
= $6,900 - $5,400
= $1,500
For repairs
= $12,000 - 600 × $16
= $12,000 - $9,600
= $2,400
Hence, the unused resource capacity in energy and repairs for Tri-State Mill. is $1,500 and $2,400 respectively
Smith & Sons uses the allowance method of handling its credit losses. It estimates credit losses at two percent of credit sales, which were $2,000,000 during the year. On December 31, the Accounts Receivable balance was $300,000 and the Allowance for Doubtful Accounts had a credit balance of $21,400 before adjustments.
Show how accounts receivable and the allowance for doubltful accounts would appear in the December 31 Balance Sheet.
Answer:
$238,600
Explanation:
Firstly, we need to compute the amount of bad debt
= Credit sale × Bad debt expense
= $2,000,000 × 2%
= $40,000
The adjusted balance of allowance will be the addition of unadjusted balance of allowance account and the bad debt expense
= $21,400 + $40,000
= $61,400
The , the balance will be :
Accounts receivables = $300,000
Less: Allowance for doubtful account = ($61,400)
Net realizable value of account receivable = $238,600
The process of developing budget estimates by requiring all levels of management to estimate sales, production, and other operating data as though operations were being initiated for the first time is referred to as a.master budgeting b.continuous budgeting c.zero-based budgeting d.flexible budgeting
Answer:
Zero-based budgeting
Explanation:
Zero-based budgeting can be regarded as approach used to make budget right from scratch, it doesn't have to base on previous budgets i.e a budget starting from zero and every expenses must be justify before it can be added to official budget. It should be noted that The process of developing budget estimates by requiring all levels of management to estimate sales, production, and other operating data as though operations were being initiated for the first time is referred to as Zero-based budgeting
In 2006, Lego laid off 1,200 workers and ended production in the U.S.. The company contracted out production of basic Lego bricks to Singapore-based electronics manufacturer Flextronics, which operates factories in Mexico and eastern Europe. Which two of the ten operations management decision types were addressed by this decision
Question Completion:
Ten Operations Management Decision Types:
a. Design of goods and services
b. Managing quality
c. Process and capacity design
d. Location strategy
e. Layout strategy
f. Human resources and job design
g. Supply chain management
h. Inventory management
i. Scheduling
j. Maintenance
Answer:
Lego
The two types of operations management decisions that were addressed by Lego's decision to end production in the US are:
d. Location strategy
g. Supply chain management
Explanation:
Lego decided to close its production facilities in the U.S.A because of the shifting customer demand. There has been a growing demand for electronics by children as against plastic toys. This is why it was able to contract out its production activities to a Singapore-based manufacturer with factories in Mexico and eastern Europe. So the company is strategically moving its production to countries that have high demand for its products and, at the same time, enjoying some tax benefits.
In the late 1800s, how did railroad monopolies create economic hardships for farmers?A. By claiming productive land for business leaders to developB. By charging high prices to ship agricultural goods to marketC. By separating farmers from profitable markets in western citiesD. By isolating farmers from technological developments in eastern cities
Answer:
B) By charging high prices to ship agricultural goods to market
Explanation:
Arround 19th century, the farmers always look up to railroads as a means of transportation for their goods to other nations which later became Monopoly as regards to means of transportation. It should be noted that In the late 1800s, railroad monopolies create economic hardships for farmers by charging high prices to ship agricultural goods to market
Chapter 4
Analysis of Financial Statements
Problem 4-1 page 112
DAYS SALES OUTSTANDING Baker Brothers has a DSO of 40 days, and its annual sales are
$7,300,000. What is its accounts receivable balance? Assume that it uses a 365-day year.
Answer: $800,000
Explanation:
Day sales Outstanding = 40 days
Annual sales = $7,300,000
Total days for the year = 365 days
We need to know the average sales per day which will be:
= $7,300,000 / 365
= $20,000
DSO = Account receivable / Average sales per day
40 = Account receivable / 20,000
Account receivable = 40 × 20,000
= $800,000
Therefore, the account receivable balance is $800,000
Dawson Toys, Ltd., produces a toy called the Maze. The company has recently established a standard cost system to help control costs and has established the following standards for the Maze toy:Direct materials: 6 microns per toy at $1.50 per micron Direct labor: 1.3 hours per toy at $21 per hourDuring July, the company produced 3,000 Maze toys. Production data for the month on the toy follow:Direct materials: 25,000 microns were purchased at a cost of $1.48 per micron. 5,000 of these microns were still in inventory at the end of the month.Direct labor: 4,000 direct labor-hours were worked at a cost of $88,000.Required: 1. Compute the following variances for July:a. The materials price and quantity variances.b. The labor rate and efficiency variances.
Answer:
1. a. The materials price and quantity variances
Material price variance: Standard cost per micron is $1.50 and actual cost per micron is $1.48. So, price variance is 1.48 - 1.5 = $(0.02) per micron
Quantity variance: Based on standard bill of material, Dawson Toys need 3,000 x 6 = 18,000 microns to produce 3,000 Maze toys. Actual consumption volume is 25,000 - 5,000 = 20,000 microns. So, quantity variance is 20,000 - 18,000 = 2,000 microns.
1. b. The labor rate and efficiency variances
Actual labor rate = Actual labor cost / Actual hour = 88,000/4,000 = $22 per hour.
Efficiency variance = Actual labor rate - Standard labor rate = 22 - 21 = $1 per hour.
2. Prepare a brief explanation of the possible causes of each variance.
Direct material cost variance: Total actual material cost is 20,000 x 1.48 = $29,600, higher than standard material cost of 18,000 x 1.5 = $27,000. This is mainly due to higher production waste as compared to standards.
Direct labor cost variance: Total actual labor cost is $88,000, higher than standard labor cost of 4,000 x 21 = $84,000. This is mainly due to lower labor rate per hour than expected.
Explanation:
The world price of a liter of vodka is$7.00. While the distillation is done domestically, some of the grainsand materials for the bottle are imported. The value of imported components is$2.00. Assume that thereis no tariff on imported components used to make vodka.a) (1 points) What is the NRP for vodka if there is a tariff of$3.00
Answer:
The NRP for vodka is 42.8%.
Explanation:
Since the world price of a liter of vodka is $ 7.00, and while the distillation is done domestically, some of the grain and materials for the bottle are imported, and the value of imported components is $ 2.00, assuming that there is no tariff on imported components used to make vodka, to determine what is the NRP for vodka if there is a tariff of $ 3.00 the following calculation must be performed:
X = ((7 + 3) - 7) / 7
X = (10 - 7) / 7
X = 3/7
X = 0.428
Thus, the NRP for vodka is 42.8%.
During 2020, Sam and Libby, a married couple, decided to sell their residence, which had a basis of $200,000. They had owned and occupied the residence for 20 years. To make it more attractive to prospective buyers, they had the inside painted in April at a cost of $5,000 and paid for the work immediately. They sold the house in May for $800,000. Broker's commissions and other selling expenses amounted to $50,000. The couple purchased a new residence in July for $400,000. What is the recognized gain and the adjusted basis of the new residence
Answer:
$50,000:$400,000
Explanation:
Based on the information given we were told that the Broker's commissions and other selling expenses was the amount of $50,000 in which They as well made purchased of a new residence in July for the amount of $400,000 which means that the recognized gain will be $50,000 the amount of Broker's commissions and other selling expenses and the adjusted basis of the new residence will be $400,000 which is the cost of purchasing a new residence.
If business property or property held for the production of income is destroyed, the loss is equal to the adjusted basis of the property at the time of destruction.
a. True
b. False
Answer:
A) true
Explanation:
Business property could be of different types such as Real property(real estate) which comprises building as well as land. As regards to business real property could be property such as warehouses, offices as well as factories which is been owned by the business. If these properties are been held for income production, the loss can be attributed to adjusted basis during the destruction of the property. It should be noted If business property or property held for the production of income is completely destroyed, the loss is equal to the adjusted basis of the property at the time of destruction.