Answer:
From Year 1 to Year 2 : There is annual deflation 11.11%
As price falls, value of money rises
Explanation:
Given : Commodity Basket Cost = $9 in Year 1 ; Commodity Basket Cost = $8 in Year 2
From Year 1 to Year 2 : There has been fall in price level. Proportionate (%) Fall in price level = Change in Price / Old Price x 100
So, Fall in price level = [ ( 9 - 8 ) / 9] x 100 = 1/9 x 100 = 11.11%
Hence, from year 1 to year 2 : there has been 11% fall in price i.e Deflation
Considering Income = $72 :
So, it illustrates that : As price falls, the purchasing power of money (value of money) rises.
15%
b.
18.67%
c.
2.8%
d.
42%
Answer:
Option D is correct (42%)
Explanation:
Option D is correct (42%)
In order to find the profit we will proceed as follow:
Given data:
Operating leverage for Donuts Unlimited=2.8
Increase in sale=15%
sales level= $270,000
Required:
Increase in Profit=?
Solution:
% Increase In profit/net income=% Increase in Sales*Operating leverage
% Increase In profit=15%*2.8
% Increase In profit=42%
Answer:
d. $36
Explanation:
The Contribution margin is the net of selling price and variable cost of a product. It is calculated by deducting the variable cost from the selling price of a product.
Cake Pie Cookies
Current selling price $30 $18 $5
Variable cost $12 $7 $1
Contribution margin $18 $11 $3
Production hours 2 1.5 0.25
Contribution margin/hr. $9 $7.33 $12
Required Contribution margin per hour of cake = $12
Required Contribution margin = $12 x 2 = $24
Required Selling Price = Contribution margin + variable cost = $24 + $12 = $36
Note there is a mistake in the calculation of Contribution margin of Cookies as it is given $3 but after deducting the variable cost from selling price is should be $4 ( $5 - $1 ), I used the given contribution margin for the calculation.
Answer:
a. No entry is required.
b. Payroll Dr. $30,000
Wages Payable Cr. $30,000
c. Payroll Dr. $30,000
Federal Income Tax Cr. $4,500
FICA Taxes Payable Cr. $2,400
Wages Payable Cr. $23,100
d. Payroll Dr. $30,000
Federal Income Tax Cr. $4,500
FICA Taxes Payable Cr. $2,400
SUTA Cr. $1,800
FUTA Cr. $300
Wages Payable Cr. $21,000
b)taking advantage of scale economies to produce at low average cost.
c)raising prices and reducing output.
Answer:
The Gourmand Cooking School
1. Planning Budget for September:
Fixed Cost Cost per Cost per Planning
per Month Course Student Budget
Instructor wages $ 2,960 $11,840
Classroom supplies $ 270 16,740
Utilities $ 1,220 $ 75 1,520
Campus rent $ 4,800 4,800
Insurance $ 2,300 2,300
Administrative expenses $ 3,900 $ 44 $ 7 4,510
Total $41,710
2) Flexible Budget for September:
Fixed Cost Cost per Cost per Flexible
per Month Course Student Budget
Instructor wages $ 2,960 $11,840
Classroom supplies $ 270 15,120
Utilities $ 1,220 $ 75 1,520
Campus rent $ 4,800 4,800
Insurance $ 2,300 2,300
Administrative expenses $ 3,900 $ 44 $ 7 4,468
Total $40,048
3. The Revenue and Spending Variances for September (based on flexible budget):
Planning Flexible Actual Spending
Budget Budget Variance
Revenue $55,180 $46,280 $52,280 $6,000 F
Instructor wages $11,840 $11,840 $11,120 $720 F
Classroom supplies 16,740 15,120 16,590 1,470 U
Utilities 1,520 1,520 1,930 410 U
Campus rent 4,800 4,800 4,800 0 None
Insurance 2,300 2,300 2,440 140 U
Administrative expenses 4,510 4,468 3,936 532 F
Total $41,710 $40,048 $40,816 $768 U
Explanation:
a) Data and Calculations:
Sales price per student = $890
Planned number of courses = 4
Planned total number of students = 62
Actual number of courses ran = 4
Actual total number of students = 56
Data concerning the company’s cost formulas appear below:
Fixed Cost Cost per Cost per
per Month Course Student
Instructor wages $ 2,960
Classroom supplies $ 270
Utilities $ 1,220 $ 75
Campus rent $ 4,800
Insurance $ 2,300
Administrative expenses $ 3,900 $ 44 $ 7
Actual Results:
Actual Revenue $ 52,280
Instructor wages $ 11,120
Classroom supplies $ 16,590
Utilities $ 1,930
Campus rent $ 4,800
Insurance $ 2,440
Administrative expenses $ 3,936
The planning budget for September, based on 4 courses and 62 students, calculated total expenses of $17,467 and expected revenue of $55,180. The flexible budget was recalculated based on having 4 courses and 56 students, with expenses of $17,629 and revenue of $49,840. Variances between the flexible budget and actuals showed an unfavorable revenue variance of $2,440 and expense variance of $1,387.
The planning budget would be based on the planned courses and student numbers. The calculation includes fixed costs, plus variable costs for each course and student. Considering 4 courses and 62 students, the total expenses come out to be $17,467, while expected revenue would be $55,180 ($890 per student).
The flexible budget would adjust the planned budget based on actual results. Here, with the same 4 courses but only 56 students, the adjusted expenses are $17,629, and the actual revenue is $49,840.
The revenue and spending variances for September can then be calculated by comparing actual results to the flexible budget. The revenue variance is $2,440 unfavorable ($52,280 - $49,840), while the spending variance is $1,387 unfavorable ($19,016 - $17,629).
#SPJ12
II The corporation's capitalization will decrease
III The market value of the common stock will increase
IV The market value of the common stock will decrease
Answer:
II and III
Explanation:
The best answer is ii and iii. If a corporation repurchases its debt, then its capitalization will decrease. Corporations repurchase debt to refinance at smaller interest rates so as to To increase the market value of the corporation's common stock. If corporation has less debt, the common stock would have more value and to reduce the corporation's earnings fluctuation's due to cyclical conditions. Corporate sales fall because of cyclical conditions, but fixed interest charges do not. This causes earnings for common shareholders to reduce in period of falling sales. To reduce this possibility, a corporation can repurchase its debt.