BUSINESS COLLEGE

A Swiss watch company advertises its history of superior craftsmanship. The company thinks that this would​ a. ​Make the demand for the product less elastic b. ​Make the customers less sensitive to the price c. ​Assist them with differentiating their product d. ​All of the above

Answers

Answer 1
Answer:

Answer:

The correct answer is letter "B": ​Make the customers less sensitive to the price.

Explanation:

There are several reasons that could make products become elastic or inelastic. Reputation typically makes goods and services be considered inelastic. These types of products do not see a change in their quantity demanded in front of changes in price.

Thus, if a Swiss watch company promotes their history of superior craftsmanship is attempting to aware consumers about its watch quality and reputation so if they decide to increase prices consumers will be less sensitive to the change.

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The SP Corporation makes 38,000 motors to be used in the production of its sewing machines. The average cost per motor at this level of activity is: Direct materials $ 9.70 Direct labor $ 8.70 Variable manufacturing overhead $ 3.55 Fixed manufacturing overhead $ 4.50 An outside supplier recently began producing a comparable motor that could be used in the sewing machine. The price offered to SP Corporation for this motor is $24.55. If SP Corporation decides not to make the motors, there would be no other use for the production facilities and none of the fixed manufacturing overhead cost could be avoided. Direct labor is a variable cost in this company. The annual financial advantage (disadvantage) for the company as a result of making the motors rather than buying them from the outside supplier would be:

Answers

Answer:

Explanation:

The fixed cost is relevant in this situation as it can not be avoided and there would be no other use for the facility.

                                                         Unit cost

Direct materials                                   9.70

Variable manufacturing cost              3.55

Fixed  manufacturing overhead         4.50

Direct labor                                          8.70

Total                                                     26.45

Units produced cost of producing 38,000 = 38000* 26.45 = 1,005,100

Cost of buying 38,000 = 38,000 * 24.55 = 932,900

Cost saved = 1,005,100 - 932,900 =72,200

In the month of September, a department had 500 units in the beginning work in processinventory that were 60% complete. These units had $30,000 of materials costs and$22,500 of conversion costs. Materials are added at the beginning of the process andconversion costs are added uniformly throughout the process. During September, 10,000units were completed and transferred to the finished goods inventory and there were2,000 units that were 25% complete in the ending work in process inventory onSeptember 30. During September, manufacturing costs charged to the department were:Materials $690,000; Conversion costs $765,000.The cost assigned to the units transferred to finished goods during September was

Answers

Answer:

135,000 transferred out under Weighted average method

Explanation:

W/A method:

equivalent units materials 10,000 + 2,000 = 12,000 units at 100%

material cost: 690,000  + 30,000 = 720,000

720,000 / 12,000 = 60

equivalent units conversion 10,000 + 500 = 10,500

conversion cost 22,500 + 765,000 = 787,500

787,500 / 10,500 = 75

75 + 60 = 135 cost per unit

10,000 x 135 = 135,000 transferred out

A bond has a standard deviation of 10.7 percent and an average rate of return of 6.4 percent. What is the coefficient of variation (CoV)

Answers

Answer:

CoV = 1.671875 rounded off to 1.67

Explanation:

The coefficient of variation (CoV) is a measure of volatility of an investment. It tells the volatility in comparison with the expected return from the investment. We can say that the CoV tells us the risk per unit of return as CoV is calculated by dividing standard deviation, which is a measure of risk, by the expected return of the investment.

CoV = SD / r

Where,

  • SD is the standard deviation
  • r is the expected return

CoV = 0.107 / 0.064

CoV = 1.671875 rounded off to 1.67

Oahu Kiki tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each month, as if it uses a periodic inventory system. Assume Oahu Kiki’s records show the following for the month of January. Sales totaled 310 units.Date Units Unit Cost Total Cost
Beginning Inventory January 1 220 80 $17,600
Purchase January 15 310 90 27,900
purchase January 24 270 110 29,700

Calculate the number and cost of goods available for sale.

Answers

Answer:

Number = 1,490

Cost of goods available for sale = $75,200

Explanation:

Computing the number as:

Number = (Beginning inventory + Purchases + Purchases) - Sales

Number = (1,220 + 310 + 270) - 310

Number = 1,800 - 310

Number = 1,490

Computing the cost of goods available for sale as:

Cost of goods available for sale = Total cost of beginning inventory + Total Cost of purchase + Total Cost of purchase

Cost of goods available for sale = $17,600 + $27,900 + $29,700

Cost of goods available for sale = $75,200

Bruce Corporation makes four products in a single facility. These products have the following unit product costs: Products ABCD Direct materials$13.20$9.10$9.90$9.50 Direct labor 18.30 26.30 32.50 39.30 Variable manufacturing overhead 3.20 1.60 1.50 2.10 Fixed manufacturing overhead 25.40 33.70 25.50 36.10 Unit product cost$60.10$70.70$69.40$87.00 Additional data concerning these products are listed below. Products ABCD Grinding minutes per unit 2.70 3.40 3.20 2.30 Selling price per unit$75.00$92.40$86.30$103.10 Variable selling cost per unit$1.10$0.10$2.20$0.50 Monthly demand in units 2,900 2,900 1,900 2,100 The grinding machines are potentially the constraint in the production facility. A total of 52,600 minutes are available per month on these machines. Direct labor is a variable cost in this company. How many minutes of grinding machine time would be required to satisfy demand for all four products

Answers

Answer:

A. Total grinding minutes required = 28,600 minutes

B.

Of the 4, product D offers the highest profitability per grinding minute.

A. $40,020 divided by 7,830 minutes = $5.11 per grinding minute

B. $62,640 divided by 9,860 minutes = $6.35 per grinding minute

C. $27,930 divided by 6,080 minutes = $4.60 per grinding minute

D. $32,760 divided by 4,830/minutes = $6.70 per grinding minute

Explanation:

Bruce corporation

A.

Step 1 identify Grinding minutes per unit of product

A = 2.70

B = 3.40

C = 3.20

D = 2.30

Step 2. Identify Production units through monthly demand units

A = 2,900

B = 2,900

C = 1,900

D = 2,100

Step 3. Determine total grinding units required to fulfill demand.

A = 2,900 x 2.70 = 7,830

B = 2,900 x 3.40 = 9,860

C = 1,900 x 3.20 = 6,080

D = 2,100 x 2.30 = 4,830

Total grinding minutes required = 28,600

B.

Product profitability

Step 1. Determine product cost

Differentiate the product Costs and variable selling costs per unit from the unit selling prices.

A = 75.00 - 60.10 - 1.1 = 13.80

B = 92.40 - 70.70 - 0.1 = 21.60

C = 86.30 - 69.40 - 2.20 = 14.70

D = 103.10 - 87.00 - 0.50 = 15.60

Step 2. Multiply the profitability per unit with volume demanded to determine absolute value of profits made

A = 2,900 x 13.80 = $40,020

B = 2,900 x 21.60 = $62,640

C = 1,900 x 14.70 = $27,930

D = 2,100 x 15.60 = $32,760

Total profit = $163,350.

Step 3./determine the profit per grinding minute. To evaluate which product makes best use of the grinding machine

A. $40,020 divided by 7,830 minutes = $5.11 per grinding minute

B. $62,640 divided by 9,860 minutes = $6/35 per grinding minute

C. $27,930 divided by 6,080 minutes = $4.60 per grinding minute

D. $32,760 divided by 4,830/minutes = $6.7 per grinding minute

On January 1, Year 1, Stratton Company borrowed $100,000 on a 10-year, 7% installment note payable. The terms of the note require Stratton to pay 10 equal payments of $14,238 each December 31 for 10 years. The required general journal entry to record the first payment on the note on December 31, Year 1 is:

Answers

Answer:

Dr interest expense $7,000

Dr notes payable $7,238

Cr cash                                     $14,238    

Explanation:

The first task is to compute interest expense on the loan in year 1 which is shown below:

interest expense=$100,000*7%

interest expense=$7,000

Principal repayment=repayment-interest repayment

Principal repayment=$14,238-$7,000=$7,238

The double entries are to debit interest expense and notes payable with $7,000 and $7,238 respectively while cash is credited with $14,238 as an outflow of cash.
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