BUSINESS COLLEGE

Watkins Associated Industries is a highly diversified company with three divisions: Trucking, Seafood, and Construction. Assume that the company uses return on investment and residual income as two of the evaluation tools for division managers. The company has a minimum desired rate of return on investment of 10% with a 30% tax rate. Selected operating data for three divisions of the company follow.Trucking Division Seafood Division Construction Division
Sales $1,250,000 $800,000 $950,000
Operating assets 650,000 300,000 400,000
Net operating income 146,250 52,800 79,600
1) Compute the return on investment for each division.
2) Compute the residual income for each division.

Answers

Answer 1

Answer:

Answer:

Trucking Seafood Construction

division division division

Sales $1,250,000 $800,000 $950,000

Net operating income $146,250 $52,800 $79,600

Income taxes ($43,875) ($15,840) ($23,880)

Net income $102,375 $36,960 $55,720

Operating assets $650,000 $300,000 $400,000

rrr x operating assets $65,000 $30,000 $40,000

1) ROI 15.75% 12.32% 13.93%

(net income/investment)

2) Residual income $81,250 $22,800 $39,600

operating income - (rrr x operating assets)

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Drawing on the new trade theory and Porter's theory of national competitive advantage, outline the case for government policies designed to build a national competitive advantage in biotechnology. What kind of policies would you recommend the government adopt? Are these policies at variance with the basic free trade philosophy?

Answers

Answer:

Porter's theory of national competitive advantage argues that the four general attributes of a nation form an environment in which local companies compete, and that these attributes contribute to or hinder the creation of competitive advantage. These attributes are: safety factor, demand conditions, related and support industries, as well as the company's strategy, structure and competence. Porter goes on to argue that companies are likely to succeed in industries where diamond (which is the four attributes) is favorable. Porter adds two factors to the list of attributes described above: randomness and public policy. The New Theory of Trade addresses a separate topic. This theory asserts that due to substantial economies of scale, global demand will only support a few companies in many industries. At the core of this argument is the concept of pioneering benefits, which are the economic and strategic benefits obtained by the first participants in the industry. It can be argued that when the attributes of a nation contribute to the production of a product, and when the manufacturers of this product experienced some "random" events that gave them a pioneering advantage, this nation's government policy should help create an advantage. national competitive in this particular area. This can be accomplished with government research and development grants, policies that favor the industry in capital markets, educational policies, creating a supportive regulatory environment, reducing taxes, and the like. Ask your students if they think this policy goes against the basic philosophy of free trade. It can be argued that this is so because government intervention creates the basis for comparative advantage. Conversely, it can be argued that if a country establishes a comparative advantage in a specific area based on a single set of attributes (such as Swiss watchmaking), global production will have a beneficial effect if this country is allowed to continue its area comparative. advantage.

Final answer:

Government policies can help harness the benefits of the new trade theory and Porter's theory of national competitive advantage, potentially driving national competitive advantage in the biotechnology sector. However, these policies, if involving protectionist measures, can be at variance with the principle of free trade.

Explanation:

Drawing upon the new trade theory and Porter's theory of national competitive advantage, government policies can play a pivotal role in building a national competitive advantage in the biotechnology sector. According to new trade theory, countries can benefit from specialising in the production of certain goods and services wherein they can achieve economies of scale and network effects. In the case of the biotechnology sector, this could be encouraged through policies in the form of research and development grants, tax incentives for biotech firms, and investment in infrastructure and education related to biotechnology.

Porter's national competitive advantage framework suggests that government's role in creating a conducive 'diamond' of factor conditions, demand conditions, related and supporting industries, and firm strategy, structure and rivalry is crucial. Here, establishing strong university-industry collaborations, rigorous regulations to maintain quality, and national guidelines for biotech firms can be steps forward.

However, these suggested policies of promoting a certain industry might seemingly be at odds with the philosophy of free trade, which advocates for minimal government intervention and open markets for all goods and services. It may be seen as a move towards 'protectionism', particularly if the policies involve subsidies or tariff barriers to protect domestic biotechnology firms from foreign competition.

Learn more about National Competitive Advantage here:

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Jepson uses the periodic inventory system and the gross method of accounting for purchases. The journal entry that Jepson will make on September 12 is:

Answers

Answer and Explanation:

The journal entry is shown below:

Purchases $6,000

To Account payable $6,000

(Being purchases on the account is recorded)

Here we debited the purchase as it increase the inventory while on the other hand the account payable is credited as it also increased the liability

So the above entry should be recorded

Sitwell Corporation manufactures titanium and aluminum tennis racquets. Sitwell’s total overhead costs consist of assembly costs and inspection costs. The following information is available: Cost Titanium Aluminum Total Cost Assembly 500 mach. hours 500 mach. hours $45,000 Inspections 350 150 $75,000 2,100 labor hours 1,900 labor hours Sitwell is considering switching from one overhead rate based on labor hours to activity-based costing. Using activity-based costing, how much "assembly cost is assigned to titanium racquets"?

Answers

Answer:

$22,500

Explanation:

Activity based costing (ABC) is a method of cast allocation where the overheads and other indirect costs are allocated to products and services based on the volume of different activities consumed by each product.

The total cost pool is divided by the defined cost drivers to determine the cost driver rate.

Titanium Hours Aluminium hours Cost

Assembly 500 500 1000 45000

Inspection 350 150 500 75000

Labor hours 2100 1900 4000 120000

Cost per labor hour = 120000/4000= 30

Using activity based costing , portion of the assembly cost assigned to titanium Racquets = Titanium assembly hours / total assembly hours * total assembly cost

500/1000*45000

=22,500

write a response that describes how knowledge of the accounting equation and financial statements discussed in week 1 might be used by the Medical office Manager during normal business activities. Indicate in your answer why you believe this to be so.

Answers

The knowledge on basic principles of accounting may be useful for a Medical officer Manager because it allows him to better understand the flow of the business from the transaction to people handling skills during normal business activities. These make it easier for him to get acquainted with what is to be dealt with during normal business talks.

A U.S. manufacturing company operating a subsidiary in an LDC (less-developed country) shows the following results: U.S. LDC Sales (units) 100,505 19,600 Labor (hours) 19,550 14,550 Raw materials (currency) $ 20,500 19,550 (FC) Capital equipment (hours) 58,600 4,550 *Foreign Currency unit a. a. Calculate partial labor and capital productivity figures for the parent and subsidiary. (Round your answers to 2 decimal places.)
b. Compute the multifactor productivity figures for labor and capital together. (Round your answers to 2 decimal places.)
c. Calculate raw material productivity figures (units/$ where $1

Answers

Answer:

Part A:

Labur Productivity:

For US=5.14, LDC=1.35

Capital Productivity:

For US=1.72 LDC=4.31

Part B:(Multi factor productivity)

For US=1.29 LDC=1.03

Part C: (Raw material productivity)

For US=4.90 LDC=10.02

Explanation:

Part A:

Labur Productivity:

For US:

$Partial Labor Productivity=(Sale(units))/(Labour(hours) \nPartial Labor Productivity=(100505)/(19550) \nPartial Labor Productivity=5.14$

For LDC:

$Partial Labor Productivity=(Sale(units))/(Labour(hours) \nPartial Labor Productivity=(19600)/(14550) \nPartial Labor Productivity=1.35$

Capital Productivity:

For US:

$Capital Productivity=(Sale(units))/(Capital Equipment) \nCapital Productivity=(100505)/(58600)\nCapital Productivity=1.72$

For LDC:

$Capital Productivity=(Sale(units))/(Capital Equipment) \nCapital Productivity=(19600)/(4550)\nCapital Productivity=4.31$

Part B:

For US:

$Multifactor Productivity=(Sales(units))/(labour(Hours) + Capital Equipment(hours))\n Multifactor Productivity=(100505)/(19550+58600) \nMultifactor Productivity=1.29$

For LDC:

$Multifactor Productivity=(Sales(units))/(labour(Hours) + Capital Equipment(hours))\n Multifactor Productivity=(19600)/(14550+4550) \nMultifactor Productivity=1.03$

Part C:

For US:

$Raw material productivity=(Sales(Hour))/(Raw Material) \n Raw material productivity=(100505)/(20500) \n Raw material productivity=4.90$

ForLDC:

Converting Raw material FC into $ (1$=10FC)

Raw Material =19550/10=$1955

$Raw material productivity=(Sales(Hour))/(Raw Material) \n Raw material productivity=(19600)/(1955) \n Raw material productivity=10.02$

If the government wants to reduce GDP by $500 million, the most appropriate action is: contractionary fiscal policy, which includes a reduction in government spending by $500 million.
contractionary fiscal policy, which includes a reduction in government spending by more than $500 million.
contractionary fiscal policy, which includes a reduction in government spending by less than $500 million.
expansionary fiscal policy, which includes an increase in government spending by $500 million.
expansionary fiscal policy, which includes an increase in government spending by more than $500 million.
expansionary fiscal policy, which includes an increase in government spending by less than $500 million.

Answers

Answer:

The correct answer is the first option: contractionary fiscal policy, which includes a reduction in government spending by $500 million.

Explanation:

On one hand, Gross Domestic Product, or GDP, is the name given in the field of economics, to the term that refers to a monetary measure of the market value of all the goods and services that are produced in the economy of a country in an specific time period of evaluation.

On the other hand, a contractionary fiscal policy indicates the fact of reducing the amount of money spent in the economy, therefore that the main focus of this type of policy is to try to lower the public expenditure basically.

Therefore that it is understandable that the correct answer is the first option where the action would be of reducing the government spending by $500 million, according to what the question ask.

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