Complete Question:
Which of the following is an objection of using the Consumer Price Index (CPI) to measure changes in the cost of living?
A. The calculated inflation rate is only accurate for an individual who purchases all the goods and services in the basket.
B. The inflation rate is always understated due to substitution bias.
Answer:
Consumer Price Index (CPI)
A. The calculated inflation rate is only accurate for an individual who purchases all the goods and services in the basket.
Explanation:
To obtain the Consumer Price Index (CPI), a predetermined basket of consumer goods and services is obtained. Weights are assigned to the goods according to their relative values in the basket. The price changes are calculated. The resulting figures are averaged to determine the CPI.
Answer:
The calculated inflation rate is only accurate for an individual who purchases all the goods and services in the basket.
Explanation:
Answer:
D) Has no effect on total equity but decreases retained earnings.
Explanation:
Dividends refer to the distribution of profits to the common stock holders.
This is basically an appropriation of profits.
When dividends are declared, then the retained earnings are reduced and a liability is created.
Announcing and declaring a dividend is a right to claim dividend by shareholders.
Thus, it do not affect the equity at all, but a liability is created and the moment dividend is paid liability is settled.
Answer: 1. Low
2. False
3. False
Explanation:
1. The owners' goal is to keep players' salaries Low.
As the text says, Oligopolist buyers would try to reduce the price of goods that they buy. In the MLB world, the teams are the buyers and the players are the sellers with the salaries being their price. Team owners will therefore try to keep salaries at a low level so that they make more profit.
2. False
This goal is not difficult to achieve due to budget differences but rather because different payers offer varying contributions to the team's game. Some players push the team forward more and hence are able to demand their fair share. This makes it difficult to cap their salaries.
3. False
They only tried to impose the salary cap so that they could reduce the cost of running the basketball teams and not to prevent teams from cheating. The salaries they were paying were high enough that they felt they weren't making enough profit. So they conspired to impose a salary cap so that they could make more profit.
a)$2,000 increaseb)$2,000 decreasec)$3,000 decreased)$15,000 increase
Answer:
c)$3,000 decrease
Explanation:
The sales less the variable cost gives the contribution margin. The contribution margin less the fixed cost gives the net operating income.
Considering the data given with respect to the special order, the net income would be equal to the sales less the additional cost which are variable and fixed.
net profit/(loss) from order
= 1000 ($15 - $5 - $12 - $1)
= ($3000)
Answer:
a)$2,000 increase
Explanation:
As fixed cost is the irrelevant expense in the decision making for the special order. It is avoidable cost.
Special Order
Quantity 1000 scales
Price $15 per sale
Less: Variable cost $12 per sale
Less: Shipping cost $1 per sale
Contribution margin $2 per scale
Total Contribution margin = 1,000 scales x $2 per scale = $2,000
Net Income will increase by $2,000 if the special order is accepted.
Answer:
Following are the solution to the given points:
Explanation:
In point a, As it would be impossible that although the failure of the lawsuit is remote, the same cannot be recorded as well as avoided.
In point b, Its prosecutor thinks Gallardo's failure of the case (which would be likely to occur) is therefore likely to be reported throughout the books, that legal expenses must be paid and the civil responsibility measured at $10,00000 credited.
In point c, In the case is fairly probable, this can occur only if it is reported throughout the corresponding Balance Sheet accounts.
Gallardo Co.'s response to the lawsuit depends on their attorneys' opinions. If it's remotely believed that the company will lose, no need to recognize the liability or disclose it in financial statements. If the loss is estimated as probable, recognize the $1,000,000 liability and expense; if reasonably possible, no liability needs to be recognized, but disclosure in the financial statement notes is needed.
By the Generally Accepted Accounting Principles (GAAP), Gallardo Co. should account for the lawsuit differently based on the attorneys' estimation of loss.
(a) If the attorney's opinion is that it's remote that Gallardo will lose the suit, the company doesn't have to make a provision or disclose it in its financial statements. Since they believe the likelihood of loss is minimal, no liability needs to be recognized.
(b) If the attorney believes it's probable that Gallardo will lose, then according to GAAP, the company will have to recognize a liability of $1,000,000 and record a lawsuit expense in the income statement.
(c) If it's reasonably possible that Gallardo could lose, the company doesn't have to recognize a liability, but it should disclose the lawsuit and the potential financial impact in the notes to its financial statements.
#SPJ12
Answer:
A. 36,000 units
B. 40,000 units
C. 32,800 units.
Explanation:
A. To calculate units transferred out we add beginning work in process to units transferred during the period and subtract the ending work in process units.
8,000 + 32,000 - 4,000 = 36,000
Units transferred out of process in June = 36,000
B. The equivalent units of production for materials will be ;
8,000 + 32,000 = 40,000.
C. The equivalent units of production for Conversion costs will be:
(8000 * 30%) + 32000 - (4000 * 40%) = 32,800.
B. Real estate prices in Miami will fall, real estate prices in Chicago will fall.
C. Real estate prices in Miami will rise, real estate prices in Chicago will rise.
D. Real estate prices in Miami will fall, real estate prices in Chicago will rise.
E. None of the above.
Answer:
D. Real estate prices in Miami will fall, real estate prices in Chicago will rise.
Explanation:
Real estate prices in Miami will fall because according to the model, climate change will lower the amenity value of the local climate. This means that climate change will make the climate of Miami less desirable for potential residents, causing a drop in the price of the real estate of the city due to less demand.
Chicago on the other hand, will have the amenity level of its climate increased, and this will attract more potential residents who will drive up demand, causing Chicago's real estate prices to rise.