When investors allocate their money between risk-free asset and tangency portfolio, the allocation to tangency portfolio: a. decreases with a higher expected tangency portfolio return b. decreases with a higher level of risk aversion c. increases with a higher risk-free rate d. increases with a greater variance of tangency return e. decreases with a higher Sharpe ratio
Answers
Correct answer is e. decreases with a higher Sharpe ratio.
When investors allocate their money between risk-free asset and tangency portfolio, the allocation to tangency portfolio decreases with a higher Sharpe ratio.
What is the Tangency Portfolio?
A tangency portfolio is a portfolio that is tangent to the efficient frontier, which is a set of portfolios that provide the greatest expected return for a given level of risk. The tangency portfolio is the one with the highest Sharpe ratio or the highest risk-adjusted return.
Tangency Portfolio & Risk-Free Assets:Risk-free assets are those that have no risk of loss. The risk-free asset is commonly used in portfolio theory as a benchmark against which the returns of other investments are compared. A portfolio that consists of both risk-free and tangency assets is called a complete portfolio.
The tangency portfolio is the point on the efficient frontier where the slope of the tangent line to the efficient frontier is equal to the risk-free rate.
Therefore, the allocation to the tangency portfolio decreases as the Sharpe ratio increases, as the slope of the tangent line increases, and the tangency portfolio becomes more risky.
This is why the answer is e. decreases with a higher Sharpe ratio.
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Related Questions
using the values held by his organization, don has defined an ethical approach for dealing with the needs of his team members and their customers that he has implemented within his department. his team members know what is expected of them, and their customers know what to expect from the organization. the primary benefit of this approach for don's department is .
Answers
As Don has set out an ethical approach for dealing with the needs of his team members and their customers that he has implemented within his department which make his team members to know what is expected of them, then, the primary benefit of this approach for Don's department is a consistent operation
What is a consistent operation?An approach to ethics assumes that there are certain ideals toward which we should strive which provide for the full development of our humanity. These sort of ideals are discovered through the thoughtful reflection on what kind of people we have the potential to become.
When a company has reached the stage where it is looking to scale operations, then, maintaining a consistency in business processes is crucial to prevent chaos on work processes.
Therefore, the consistent operation is what Don is trying to achieve by setting out an ethical approach for dealing with the needs of his team members to make his team members know what is expected of them.
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Assume every 7-digit whole number is a possible telephone number except those that begin with 0 or 1. What fraction of telephone numbers begin with 9 and end with 0
Answers
To determine the fraction of telephone numbers that begin with 9 and end with 0, we need to consider the total number of possible telephone numbers and the number of telephone numbers that meet the given condition.
Total possible telephone numbers:
Since every 7-digit whole number is a possible telephone number except those that begin with 0 or 1, we have 10 choices (0-9) for each of the seven digits, except for the first digit, which cannot be 0 or 1. Therefore, there are 10 choices for the first digit and 10 choices for each of the remaining six digits.
Total possible telephone numbers = 10 * 10 * 10 * 10 * 10 * 10 * 10 = 10^7 = 10,000,000
Telephone numbers that begin with 9 and end with 0:
Since the first digit must be 9 and the last digit must be 0, we have only one choice for each of these digits. For the remaining five digits, we have 10 choices for each digit (0-9).
Telephone numbers that begin with 9 and end with 0 = 1 * 10 * 10 * 10 * 10 * 10 * 1 = 10^5 = 100,000
Therefore, the fraction of telephone numbers that begin with 9 and end with 0 is:
Fraction = (Telephone numbers that begin with 9 and end with 0) / (Total possible telephone numbers)
Fraction = 100,000 / 10,000,000
Fraction = 1/100
So, the fraction of telephone numbers that begin with 9 and end with 0 is 1/100.
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A contract is said to be executed when all parties have completed their performances.True or False
Answers
This statement is True. A contract is a legally executed agreement between two or more parties that sets out the rights and obligations of each party and the terms of the contract.
When all parties fulfill their obligations set forth in the contract, the contract is considered fulfilled and considered fully enforceable. Entering into a contract requires both parties to act in good faith and adhere to the terms of the contract. This includes providing the necessary documents, funds or other items specified in the contract. After fulfilling all the above obligations, the contract is considered concluded and binding.
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What are examples of the factors of production that affect the output of a car repair shop? which do not affect the output?
Answers
The factors of production that affect the output of a car repair shop are labor, capital, raw materials, and land/building. Factors such as entrepreneurship and government regulations may have indirect effects but do not directly impact the output.
The factors of production that affect the output of a car repair shop include:
1. Labor: The number and skill level of employees working in the repair shop. Skilled mechanics can perform repairs more efficiently, which can increase output.
2. Capital: The tools, equipment, and technology used in the repair shop. High-quality tools and modern equipment can help increase the efficiency and accuracy of repairs, leading to higher output.
3. Raw materials: The parts and supplies needed for repairs. Having a steady supply of quality parts can ensure that repairs are done promptly and effectively, increasing output.
4. Land and building: The physical space and location of the repair shop. A convenient and spacious location can attract more customers and allow for smoother operations, contributing to increased output.
Factors of production that may not directly affect the output of a car repair shop include:
1. Entrepreneurship: The skills and expertise of the business owner. While important for running a successful repair shop, it may not have a direct impact on the quantity of repairs performed.
2. Government regulations: Various laws and regulations related to the repair industry. While these regulations are important for safety and compliance, they may not directly influence the output of the repair shop.
Remember, the factors of production that affect the output of a car repair shop are labor, capital, raw materials, and land/building. Factors such as entrepreneurship and government regulations may not directly affect the output.
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Explain the influence of the internation and local business contexts on the practice
of public relations.
Answers
The practice of public relations is greatly influenced by both the international and local business contexts.
In the international business context, public relations professionals must be aware of cultural differences and adapt their strategies accordingly. This involves understanding the norms and values of different countries and regions, as well as being able to communicate effectively with stakeholders who may speak different languages or have different communication preferences. Additionally, international businesses often face unique challenges such as dealing with political instability, economic fluctuations, and varying legal systems.
On the other hand, the local business context also plays a significant role in shaping public relations practices. In local business environments, public relations professionals need to understand the needs and expectations of the local community. They must be able to communicate effectively with local stakeholders and build relationships based on trust and transparency. This often involves engaging with local media, sponsoring community events, and collaborating with local organizations to build a positive reputation.
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A company is expected to earn $50000 a year, at a continuous rate (income stream) for 8 years. The earnings can be invested at an interest rate of 6% compounded continuously. You have the chance to buy the rights to the earnings of the company now for $300000, or can invest your $300000 at the 6%.
Answers
If you buy the rights to the company's earnings now, you will receive $50,000 per year for 8 years. If you invest your $300,000 at 6% interest compounded continuously, you will have a future value of $512,949.
1. To calculate the future value of investing $300,000 at 6% interest compounded continuously for 8 years, we use the formula:
A = Pe^(rt), where A is the future value, P is the initial investment, e is Euler's number (approximately 2.71828), r is the interest rate, and t is the time in years. Plugging in the values, we get A = 300000 * e^(0.06*8) = $512,949.
2. If you buy the rights to the company's earnings now, you will receive $50,000 per year for 8 years. The total earnings over 8 years would be $50,000 * 8 = $400,000.
3. Comparing the two options, if you invest your $300,000 at 6% interest compounded continuously, the future value would be $512,949, which is greater than the total earnings of $400,000 if you buy the rights to the company's earnings. Therefore, it would be more profitable to invest your $300,000 at the 6% interest rate.
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Which of the following statements best define split off point in joint costing? A. It is the point at which managers decide to discontinue one or more of the products. B. It is the point at which the managers decide to outsource some of its production processes. C. It is the juncture in a joint production process when two or more products become separately identifiable. D. It is the juncture at which decisions determining joint costs of various products to be produced are taken
Answers
The correct statement that best defines the split-off point in joint costing is: It is the juncture in a joint production process when two or more products become separately identifiable. (Option C)
The split-off point is the stage in a manufacturing process where multiple products, which were being produced together as a result of a common process, reach a point where they can be recognized and accounted for as separate and distinct products. At this point, the products can be valued individually and allocated their respective costs.
It is important to note that the split-off point does not involve decisions related to discontinuing products (Option A) or outsourcing production processes (Option B). It solely represents the moment in the production process where the joint products are split into identifiable and separate entities for accounting and cost allocation purposes.
Option D, which refers to the joint costs of various products, is not a complete definition of the split-off point. While joint costs are a relevant aspect of joint costing, the split-off point specifically refers to the point in the production process when the products become separately identifiable, rather than the decision-making process regarding joint costs.
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Briefly explain economics
Answers
Answer:
The branch of knowledge concerned with the production, consumption, and transfer of wealth.
Explanation:
Economics is a social science concerned with the production, distribution, and consumption of goods and services. It studies how individuals, businesses, governments, and nations make choices about how to allocate resources. The building blocks of economics are the studies of labor and trade.
(Scenario: The Market for Travel Mugs) Use Scenario: The Market for Travel Mugs. If a $1 per unit tax is imposed, the deadweight loss associated with the tax will be equal: Scenario: The Market for Travel Mugs The market for travel mugs is given by the following demand and supply equations: Demand: P = 50 – 0.5Q Supply: P=0.33Q where P is the price per mug, and Q is the quantity of mugs. The government is considering imposing a $1 per unit tax on the purchase of travel mugs.
$0.60. $1.00. $0.50. $0.40.
Answers
The new equilibrium price, and the quantity demanded at the new equilibrium price: $0.60
To calculate the deadweight loss associated with the tax, we first need to find the equilibrium price and quantity without the tax. To do this, we set the demand equal to the supply and solve for Q:
50 – 0.5Q = 0.33Q
0.83Q = 50
Q = 60.24
Plugging Q back into either the demand or supply equation gives us the equilibrium price:
P = 50 – 0.5(60.24) = 19.88
Now, with the $1 per unit tax, the new supply curve will be:
P = 0.33Q + 1
We can again find the equilibrium price and quantity by setting the new supply equal to the demand:
50 – 0.5Q = 0.33Q + 1
0.83Q = 49
Q = 59.04
Plugging Q back into either the demand or new supply equation gives us the new equilibrium price:
P = 50 – 0.5(59.04) = 19.48
The difference between the original equilibrium price and the new equilibrium price is the amount of the tax:
$1 = 19.88 - 19.48
To find the deadweight loss, we need to calculate the change in consumer and producer surplus due to the tax. The change in consumer surplus is equal to the area of the triangle formed by the original equilibrium price, the new equilibrium price, and the quantity demanded at the new equilibrium price:
(1/2)(19.88 - 19.48)(60.24 - 59.04) = $0.60
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Leora had some money in her wallet. She spent $18.62 buying groceries and had $43.55 left. How much money did she have in her wallet before she bought the groceries?
$24.93
$35.93
$45.41
$62.17
Answers
Answer:
D. $62.17
Explanation:
To get to this conclusion you just have to add 18.62 with 43.55 to get 62.17.
Answer:
62.17
Explanation:
you add 18.62 to 43.55 and get 62.17
esri and other gis suppliers have developed schemes for classifying geographic areas. the esri tapestry segmentation scheme classifies neighborhoods into 67 distinctive segments. for example, the metro renter classification includes which specific descriptor?
Answers
Metro Renters - Tapestry Segment 3B, for instance, is a part of LifeMode Group: Uptown Individuals.
What is Esri Tapestry Segmentation?14 distinct LifeMode groups are used to categorize US neighborhoods in Esri Tapestry Segmentation. These groupings are then divided into 67 distinct customer segments based on the characteristics they have in common. Metro Renters - Tapestry Segment 3B, for instance, is a part of LifeMode Group: Uptown Individuals.A summary of a range of demographic and behavioral traits is provided by Tapestry Segmentation. The information can shed light on crucial consumer characteristics such as a consumer's age, education level, the likelihood of owning a car or home, willingness to buy or purchase a certain product, and total economic purchasing power. You may find out how people like to acquire information, whether it be through print or internet advertisements or public gatherings. Depending on where customers are located within a region, you can also observe basic variances inside communities.Therefore, Metro Renters - Tapestry Segment 3B, for instance, is a part of LifeMode Group: Uptown Individuals.
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ice floats on water. for most other substances, however, the solid sinks in the liquid. classify each of these statements based on whether they describe water or most other substances.
Answers
The statements based on whether they describe water or most other substances can be classified as follows:
Water:
1. High pressure will cause the solid to become liquid
3. In a phase diagram, the solid-liquid coexistence line has a positive slope
4. The solid is less dense than the liquid
8. The molecules are closest in the liquid phase
Most other substances:
2. The molecules are closest in the solid phase
5. The solid is more dense than the liquid
6. High pressure will cause the liquid to become solid
7. In the phase diagram, the solid-liquid coexistence line has a negative slope
Water shows some unique properties that are different than other compounds. One unique property of water is that it can float on water whereas other solid substances sink in water.
When high pressure is applied to ice which is a solid phase, it becomes liquid. Whereas for other substances, when high pressure is applied to a liquid state, the molecules come close and change to the solid state.
Ice is less dense than liquid water whereas the situation is the opposite for all other compounds. Water has this unique characteristic that the molecules are closest in the liquid state whereas for all other compounds, the molecules are closest in the solid phase.
Although a part of your question is missing, you might be referring to this question:
Ice floats on water. For most other substances, however, the solid sinks in the liquid
Classify each statement as
a. Water
b. Most other substances
Statements
1. High pressure will cause the solid to become liquid.
2. The molecules are closest in the solid phase
3. In a phase diagram, the solid-liquid coexistence line has a positive slope.
4. The solid is less dense than the liquid.
5. The solid is more dense than the liquid.
6. High pressure will cause the liquid to become solid
7. In the phase diagram, the solid-liquid coexistence line has a negative slope.
8.The molecules are closest in the liquid phase
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7. Jannah is reviewing a report that a new marketing manager put together after assessing her small business. If Jannah wants to learn how familiar a custo
what section of the marketing report should she review?
Answers
To learn how familiar a customer is to the company, Jannah must look at the leads section of the marketing report.
What is a marketing report?It consists of a document through which an organization can visualize its performance over a period of time, through the analysis of data and information about the company's actions and strategies to achieve objectives and goals in the market.
Through qualitative and quantitative reports related to communication and sales, for example, the company is able to make more significant decisions about its strategy, with evaluations and corrections that will contribute to continuous improvement and positioning in the market.
So leads could be the section that Jannah would review to identify a potential customer, as this data significantly demonstrates an individual who engages with the company's business and can be turned into a customer.
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What could this sign use on the left side.
Answers
Answer:
noce
Explanation:
Jason bought a new truck at $25,000. The truck depreciates 15% of its value each year. How much is it worth after 5 years
Answers
Answer:
I think the answer would be $18,750
Explanation:
Answer:
11809
Explanation:
Alpha Company manufactures Product P and sells it in packs of 10 units. The actual results for the first week in January are as follows: Actual production 25,000 packs of Product P Actual cost of raw material Q 95,500 units at $0.85 Actual cost of labor 500 hours at $6.25 Standard quantity of raw material 96,000 units for 25,000 units of Product P Standard price of raw material Q $0.77 Calculate the total material variance for Product P for the first week in January
Answers
Answer:\(67500\)
The right solution is "13,675 U".
Explanation:
According to the question,
The standard material cost will be:
= \(25000\times (\frac{90000}{30000} )\times 0.90\)
= \(25000\times 30000\times 0.90\)
= \(67,500\)
The actual material cost will be:
= \(95500\times 0.85\)
= \(81,175\)
hence,
The total material price variance will be:
= \(Actual \ cost - Standard \ cost\)
= \(81175-67500\)
= $\(13,675\) (Unfavorable)
In preparing a company's statement of cash flows using the indirect method, the following information is available:Net income $ 52,000Accounts payable decreased by 18,000Accounts receivable increased by 25,000Inventories increased by 5,000Depreciation expense 30,000Net cash provided by operating activities was:
Answers
Answer:
Statement of cash flows using the indirect method
Net income $52,000
Adjustments to net income:
Depreciation expense $30,000Increase in accounts receivable ($25,000)Increase in inventories ($5,000)Decrease in accounts payable ($18,000) ($18,000)net cash flow provided by operating activities $34,000
The term “By Returns” and a corresponding credit of $80 on a statement of account mean that a sum of $80 was:
a) Paid to the seller
b) Paid to the buyer
c) Added to the amount owing
d) Deducted from the amount owing
Answers
Answer:
d) Deducted from the amount owing
Explanation:
Returns refer to the goods previously sold to a customer, but the buyer has since rejected them and returned them to the seller. A buyer may reject goods due to various reasons, such as the goods being defective.
When a buyer rejects and returns goods, they are not expected to pay for them. The seller issues a credit note worth the goods returned. That amount is deducted from the invoice issued to the buyer.
Was the revocation effective?
Defend your position by citing
which legal principle is involved
and how it applies.
Answers
In this case, the revocation was not effective as a valid contract was formed between him and Sally when she sent her acceptance.
Was the revocation of an offer effective?Revocation refers to annulment or cancellation of a statement or agreement. In this scenario, Sally's acceptance was valid because it was sent before she received the revocation from Victor. The revocation would only have been effective if it had been received by Sally before she mailed her acceptance.
This is based on the principle of the "mailbox rule" in contract law, which states that an acceptance is valid once it is mailed or otherwise dispatched, rather than when it is received by the offeror. As a result, Victor's revocation was not effective, and a valid contract was formed between him and Sally when she sent her acceptance.
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This distribution center function allows a firm to pick goods by the pallet, by the case, or by the individual piece.
Multiple Choice
product allocation
product accumulation
product sortation
product assortment
product selection
Answers
"Product sortation" is the solution. The distribution center function of product sortation enables a business to choose products by the pallet, by the case, or by the individual piece.
Which alludes to distribution centers from which products are sent straight to customers?Orders for tangible goods are packaged and distributed to customers from fulfillment centers, which are warehouse facilities.
What is the name of direct shipping?Bypassing a physical store or warehouse, direct shipment is a form of fulfillment in which goods are sent from the supplier to the customer directly. Dropshipping, in which products are offered online by a third-party merchant and shipped by the supplier, is different from shipping directly.
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define the set in words. choose the correct answer below. a. the set of cars that have 3 or more years warranty or do not have a good safety rating. b. the set of cars that have 3 or more years warranty and do not have a good safety rating. c. the set of cars that have 3 or more years warranty and have a good safety rating. d. the set of cars that have 3 or more years warranty or have a good safety rating.
Answers
If the car cannot be fixed after a reasonable number of attempts, the customer must be given the option of a replacement or a refund.
What different sorts of replacement are there?
replacement of things that lose their value over time. 3. Replacement of products that become out of date as a result of new advancements. 2. Replacement of objects that entirely break down.
What does the word "replacement" signify in a sentence
An act of substituting for something that is missing is known as a replacement. Your substitute teacher is a bothersome replacement for your missing teacher.
All actions and procedures required to replace any existing Project Facilities component with a new one that serves the same purpose
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when the federal reserve conducts open-market operations to increase the money supply, it
Answers
When the federal reserve conducts open-market operations to increase the money supply, it buys or sells government bonds. The money supply increases when buys bonds and decreases when sells bonds.
An open market operation is an example of monetary policy. Monetary policy are the policies undertaken by a country's central bank in order to affect the level of aggregate demand in the economy.
An open market operation is the sale or purchase of government bonds. When the Fed sells bonds, its is known as an expansionary monetary policy because it increases the supply of money in the economy. On the other hand, when the Fed buys bonds, it is known as a contractionary monetary policy because it decreases the supply of money in the economy.
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SECTION B
ANSWER ALL ITEMS IN THIS SECTION.
1. Fill in the blanks by classifying the following activities as primary, secondary or
tertiary production.
(Total 5 marks)
A
= Banking
В.
= Forestry
С.
Canning of fish
D.
= Doctor
Е.
Working as a lumberjack
Answers
A-tertiary
B-primary
C-secondary
D-tertiary
E-primary
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Joseph lost $5,000 after engaging in a work-from-home scam. What action should he take to seek retribution?
Report the incident to the Federal Trade Commission.
File a complaint with the Federal Bureau of Investigation.
Post bad reviews on social media.
Email the company directly.
Answers
Answer: Report the incident to the Federal Trade Commission.
Explanation:
The action should he take to seek retribution is to report the incident to the Federal Trade Commission. Thus, option (a) is correct.
What is Scam?
The word “scam” describes a fraud scheme or method used to defraud someone, particularly when it comes to money.
The FTC publishes numerous publications that look at developments in antitrust and consumer protection. Joseph can report fraud, swindles, and unethical business practices on the website of the federal government.
As a result, option (a) is correct.
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Putting money into more than one kind of investment at a time is called liquidity. sunken cost. diversification. compound interest.
Answers
Answer:
diversification
Putting money into more than one kind of investment at a time is called diversification.
What is diversification?Diversification is the process of investing in diverse opportunities so as to reduce non-systemic risks. For example, if a person buys the stock of a health care company, in order to diversify, the person might invest in the stocks of an automobile company.
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Scott wants to swim across a river that is 400 meters wide. He begins swimming perpendicular to the shore he started from but ends up 100 meters downriver from where he started because of the current. How far did he actually swim from his starting point?
Answers
All employers in the U.S. Pay "payroll taxes" on behalf of employees. The Medicare portion of this is 1.45% of pay. If an employee makes $480 in a week, how much does the employer contribute for Medicare?
Answers
Answer: $6.96
Explanation:
Weekly earning = $480
Medicare tax rate = 1.45%
1.45% = (1.45/100) = 0.0145
Medicare contribution = Medicare tax rate × weekly earning
Medicare contribution = 0.0145 × $480 Medicare contribution = $6.96
The employees weekly contribution that is apportioned for Medicare is $6.96
Answer:
$7.10 USD
Explanation:
If the Employer is paying 1.48% of the employees paycheck to Medicare on their behalf then in order to calculate the actual amount we must first change the percentage into a decimal by dividing it by 100.
1.48 / 100 = 0.0148
Now that we have the percentage as a decimal we multiply it by the amount that the employee made that week, which in this case is $480
480 * 0.0148 = 7.104
Therefore we can see that $7.10 USD goes to medicate this week.
tb mc qu. 04-83 (static) henry company allocates overhead... henry company allocates overhead cost using a single plantwide rate of $80 per direct labor hour. each product unit uses three direct labor hours and 2 machine hours. the overhead cost per unit is:
Answers
The overhead cost per unit is $240.
Henry Company allocates overhead cost using a single plantwide rate of $80 per direct labor hour. Each product unit uses three direct labor hours and two machine hours.
The overhead cost per unit is calculated by multiplying the plantwide rate by the number of direct labor hours required per unit, which in this case is 3.
Therefore, the overhead cost per unit is:
Overhead cost per unit = Plantwide rate × Direct labor hours per unit= $80 × 3= $240.
Plantwide rate = $80 per direct labor hour.
Direct labor hours per unit = 3.
Machine hours per unit = 2.
The formula to calculate the overhead cost per unit is as follows:
Overhead cost per unit = Plantwide rate × Direct labor hours per unit.
We know that the plantwide rate is $80 per direct labor hour, and each unit uses three direct labor hours.
Therefore, the overhead cost per unit is:
Overhead cost per unit = Plantwide rate × Direct labor hours per unit= $80 × 3= $240.
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Which of the following are ways to estimate bad debts expense under the allowance method? Percent-of-sales Percent-of-receivables Aging-of-receivables Aging-of-payables Question 35 (2 points) The Allowance for Bad Debts account has a credit balance $300 of before the adjusting entry for bad debts expense. After analyzing the accounts in the accounts receivable subsidiary ledger using the aging-of-receivables method, the company's management estimates that uncollectible accounts will be $14,700. What will be the balance of the Allowance for Bad Debts reported on the balance sheet? a) $14,700 b) $300 c) $15,000 d) $14,400
Answers
The balance of the Allowance for Bad Debts reported on the balance sheet will be $14,700.
Under the allowance method, bad debts expense is estimated and recorded before the actual accounts are identified as uncollectible. There are several ways to estimate bad debts expense, and two of them are relevant to this question: percent-of-sales and aging-of-receivables.
In this scenario, the aging-of-receivables method was used to estimate the uncollectible accounts. This method involves analyzing the accounts receivable subsidiary ledger based on the age of the accounts. The company's management estimated that the uncollectible accounts would amount to $14,700.
Since the Allowance for Bad Debts account already had a credit balance of $300 before the adjustment, the new balance would be the sum of the existing credit balance and the estimated uncollectible accounts. Therefore, the balance of the Allowance for Bad Debts reported on the balance sheet would be $14,700.
In summary, the balance of the Allowance for Bad Debts reported on the balance sheet would be $14,700 because the aging-of-receivables method estimated uncollectible accounts to be $14,700 and there was already a credit balance of $300 in the account before the adjustment.
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cash effects of plant asset transactions are recognized in the statement of cash flows when which of the following transactions occur(s)? (select all that apply).
Answers
The cash effects of plant asset transactions are recognized in the statement of cash flows when the following transactions occur:
Purchase of plant assets for cashSale of plant assets for cashDepreciation expense on plant assetsThe purchase of plant assets for cash is reported as a cash outflow under the investing activities section of the statement of cash flows, as it represents a significant investment in long-term assets.
The sale of plant assets for cash is reported as a cash inflow under the investing activities section of the statement of cash flows, as it represents a disposal of long-term assets.
Depreciation expense on plant assets is a non-cash expense that is added back to net income in the operating activities section of the statement of cash flows, as it does not represent an actual cash outflow.
However, it is an important adjustment to reconcile net income with cash flows from operating activities, as it reflects the use of plant assets in the production of goods and services.
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Complete Question
cash effects of plant asset transactions are recognized in the statement of cash flows when which transactions occur?