Answer:
prices rise, employment rises.
Explanation:
In the starting equilibrium price, there would be more demand that result in fall in the firm inventory. Now in order to maintain the level of the inventory the firm would have to rise the production for this the firm should hire more wokers due to this the employment would rise also the wages are more paid as compared to before so it increase the production cost that results in rise in price
Therefore the above represent the answer
b. 0.33 pieces/min
c. 1.66 pieces/min
d. 0.83 pieces/min
Answer:
Production rate = 1.66 pieces/min (Approx)
Explanation:
Given:
Average lead time = 18 minutes
Average work in process inventory = 30 pieces
Find:
Production rate
Computation:
Production rate = Average work in process inventory/Average lead time
Production rate = 30/18
Production rate = 1.66 pieces/min (Approx)
Ending raw materials inventory: 40% of the next quarter’s production requirements.
Ending finished goods inventory: 25% of the next quarter’s expected sales units.
Third-quarter production: 7,740 units.
The ending raw materials and finished goods inventories at December 31, 2019, follow the same percentage relationships to production and sales that occur in 2020. 5 pounds of raw materials are required to make each unit of finished goods. Raw materials purchased are expected to cost $5 per pound.
Prepare a production budget by quarters for the 6-month period ended June 30, 2020
Answer and Explanation:
The preparation of production budget is shown below:-
Carla Vista Company
Production budget
For 6 months Ending June 31
Quarter 1 Quarter 2 Six months
Expected unit sales 5,500 6,600
Add: Desired ending finished
goods unit 1,650 1,825
(6,600 × 25%) (7,300 × 25%)
Total required units 7,150 8,425
Less: beginning finished
goods unit 1,375 1,650
(5,500 × 25%) (6,600 × 25%)
Required production
units 275 6,775 7,050
a. Estimate your exposure b to the exchange risk.
b. Compute the variance of the dollar value of your property that is attributable to the exchange rate uncertainty.
c. Discuss how you can hedge your exchange risk exposure and also examine the consequences of hedging.
Answer and Explanation:
(A) E(P) = (0.6) × ($2800) + (0.4) × ($2250)
= $1680+$900
= $2,580
E(S) = (0.6) × (1.40)+(0.4) × (1.5)
= 0.84 + 0.60
= $1.44
Var(S) = (0.6)(1.40 - 1.44)² + (.4)(1.50 - 1.44)²
= .00096+.00144
= 0.0024.
Cov(P,S) = (0.6)(2800-2580)(1.4-1.44) + (0.4)(2250-2580)(1.5-1.44)
= -5.28-7.92
= -13.20
b = Cov(P,S)/Var(S)
= -13.20/.0024
= -£5,500.
there is a negative exposure. as the pound gets stronger/weaker against the dollar the dollar value of british holding goes higher.
(B) b²Var(S) = (-5500)²(.0024) = 72,600($)²
(C). i would Buy 5,500 forward to hedge exchange risk exposure. By doing this, i can eliminate the volatility of the dollar value of your British asset that is due to the volatility of the exchange rate
The exposure to exchange risk is the difference between the expected dollar value and the current dollar value due to changes in the economy and exchange rate. Variance of the dollar value of the property is calculated factoring in the probabilities of the economic scenarios. Hedging such as use of a forward contract provides certainty by eliminating exchange risk, but it can also limit potential profit.
The exposure to the exchange risk can be estimated by calculating the expected dollar value of the property. If the economy booms, the expected value will be £2,000 * $1.40 = $2800, and if it slows down, it will be £1,500 * $1.50 = $2250. The expected dollar value is then: 0.60 * $2800 + 0.40 * $2250 = $1680 + $900 = $2580. The exchange risk exposure b is the difference between the expected dollar value and the current dollar value of the property.
The variance of the dollar value of your property attributable to the exchange rate uncertainty can be computed as: 0.60 * ($2800 - $2580)² + 0.40 * ($2250 - $2580)².
To hedge your exchange risk exposure, you can enter into a forward contract to sell pounds for dollars at a predetermined rate. This will eliminate exchange rate risk but it could also limit your potential for profit if the pound appreciates more than expected against the dollar. Thus, hedging has the consequence of providing certainty while potentially sacrificing profit.
#SPJ3
Answer:
$149,000
Explanation:
Data provided as per the question below
Cost of goods sold = $982,000
Inventory = $186,000
Purchase = $945,000
The computation of amount of ending inventory is shown below:-
Cost of goods sold = Inventory + Purchase - Ending inventory
= $982,000 = $186,000 + $945,000 - Ending inventory
= $982,000 = $1,131,000 - Ending inventory
= $149,000
Answer and Explanation:
a. The computation of the cost of goods sold is shown below:
Beginning inventory $32,800
Add: Net purchase
Purchase $248,000
Less: Purchase discount -$6,800
Less: Purchase returns -$10,800
Add: Freight in $18,600
Total net purchased $249,000
Less: ending inventory -$40,800
Cost of goods sold $241,000
2. The year end adjusting entry is
Cost of goods sold Dr $241,000
Ending inventory Dr $40,800
Purchase discount Dr $6,800
Purchase returns Dr $10,800
To Beginning inventory $32,800
To Purchase $248,000
To freight in $18,600
(Being the cost of goods sold is recorded)
Answer:
The airline company is considering buying the aircraft components in house or outsourcing it from other foreign countries.
Explanation:
A company can outsource the product manufacturing or can manufacture its own products. The manufacturing of a product in house will be according to the requirements and customization can be done but on the other hand it will require equipment and manufacturing line setup on the site which incurs heavy cost. Buying product from outside will save incurring heavy fixed costs.