Answers
Answer:
A) y = 0 , x = 10
B) x = 5 = y
c) x = 6.667, y = 3.333
Explanation:
Budget constraint = x + y = 10
calculate the utility maximizing x and y and the resulting level of utility
attached is the detailed solution
Related Questions
Excellent Printers has contracts to complete weekly supplements required by forty-six customers. For the year 2018, manufacturing overhead cost estimates total $840,000 for an annual production capacity of 12 million pages.
For 2018 Excellent Printers has decided to evaluate the use of additional cost pools. After analyzing manufacturing overhead costs, it was determined that number of design changes, setups, and inspections are the primary manufacturing overhead cost drivers. The following information was gathered during the analysis:
Cost pool Manufacturing overhead costs Activity level
Design changes $ 120,000 300 design changes
Setups 640,000 5,000 setups
Inspections 80,000 8,000 inspections
Total manufacturing overhead costs $840,000
During 2018, two customers, Money Managers and Hospital Systems, are expected to use the following printing services:
Activity Money Managers Hospital Systems
Pages 60,000 76,000
Design changes 10 0
Setups 20 10
Inspections 30 38
When costs are assigned using the single cost driver, number of pages printed, then:__________.
A. Money Managers will likely seek to do business with competitors
B. Money Managers is grossly under billed for the job, while other jobs will be unfairly over billed
C. Excellent Printers will want to retain this highly profitable customer
D. Money Managers is unfairly over billed for its use of printing resources
Answers
Answer:
B. Money Managers is grossly under billed for the job, while other jobs will be unfairly over billed
Explanation:
The single overhead rate would be $ 0.07 per page
Overhead Rate = $ 840,000/ 12 million pages = 0.07 per page.
The other rates are
design changes rate = $ 120,000/300= $ 400 per design
Inspections rate = $ 80,000/8000= $ 10 per inspection
Setups rate = $ 640,000/5000= $ 128 per setup
Money managers will be under billed for the job as the overhead rates for other costs are higher than the single overhead rate which is $ 0.07 per page.
And if other overhead rates are used other jobs will be over billed.
Using a single overhead rate for 60,000 pages for Money Managers would mean 60,000 * $ 0.07 = $ 4200
Where as if the same job is billed using other overhead rates it would cost
Money Managers $ 6860 = $ 4000 + $ 2560 + $ 300
Design = $400 * 10 = $ 4000
Setups = $ 128 * 20 = $ 2560
Inspections $ 10 * 30 = $ 300
So it is under billed and other jobs over billed.
Bagwell's net income for the year ended December 31, Year 2 was $175,000. Information from Bagwell's comparative balance sheets is given below. Compute the cash paid for dividends during Year 2. At December 31 Year 2 Year 1 Common Stock, $5 par value $500,000 $450,000 Paid-in capital in excess of par 948,000 853,000 Retained earnings 688,000 582,000 A. $95,000. B. $201,000. C. $69,000. D. $79,000. E. $50,000.
Answers
Answer:
C. $69,000
Explanation:
Computation of the cash paid for dividends during Year 2
First step is to calculate the difference in Retained earnings for Year 2 and Year 1
Retained earnings =$688,000-$582,000
Difference in retained earnings =$106,000
Second step is to calculate for the cash paid for dividends during Year 2
Using this formula
Cash paid dividend = Year 2 Net income- Retained earnings difference
Let plug in the formula
Cash paid dividend=$175,000-$106,000
Cash paid dividend =$69,000
Therefore the cash paid for dividends during Year 2 will be $69,000
Your coworker just finished a formal report for her manager. You notice the report has the title page on top with a staple in the upper left-hand corner. What advice can you give her
Answers
Answer:
Enclose the report in a binder made of vinyl or hard paper
Explanation:
Remember, this report isn't some casual document to anyone, but a formal report to a respectable personality–the manager.
Professionally such reports are binded so as to enclose them properly with vinyl or hard paper, instead of simply using a staple. Also, I'll recommend that she places the the title page after the cover before the main contents of the report.
You bought an American put option some time ago. Today it has one year left to expiration. Interest rate is 10% per year. Annual compounding applies. Strike price is $100, and stock price is $5. Which of the following is incorrect?
A. If you wait until expiration day to exercise the put option, the maximum amount it can possibly be worth at that time is 100
B. It is better to exercise the put now than wait until expiration
C. You need to know the option premium to decide whether to exercise it now or to wait
D. If you exercise the option now, it is worth 95
Answers
Answer:
D. If you exercise the option now, it is worth $95
Explanation:
A put option gives the holder of the option the right to sell a certain stock at an specific strike price.
In order to determine the value of a put option, you must subtract the current market value from the strike value = strike value - current market value = $100 - $5 = $95
If the strike value is lower than the current market value, then the put option is worthless ($0).
Apr. 20 Purchased $40,250 of merchandise on credit from Locust, terms n/30. May 19 Replaced the April 20 account payable to Locust with a 90-day, 10%, $35,000 note payable along with paying $5,250 in cash. July 8 Borrowed $80,000 cash from NBR Bank by signing a 120-day, 9%, $80,000 note payable. ___?___ Paid the amount due on the note to Locust at the maturity date. ___?___ Paid the amount due on the note to NBR Bank at the maturity date. Nov. 28 Borrowed $42,000 cash from Fargo Bank by signing a 60-day, 8%, $42,000 note payable. Dec. 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank.
Answers
Prepare journal entries for all the preceding transactions
Answer:
Tyrell Co.
Journal Entries:
April 20:
Debit Inventory $40,250
Credit Accounts Payable (Locust) $40,250
To record purchase of merchandise on credit, terms n/30.
May 19:
Debit Accounts Payable (Locust) $40,250
Credit 10% Notes Payable (Locust) $35,000
Credit Cash Account $5,250
To record the 90-day, 10% Notes Payable and payment of cash.
July 8:
Debit Cash Account $80,000
Credit 9% Notes Payable (NBR Bank) $80,000
To record the signing of a 120 day 9% bank note payable.
August 18:
Debit 10% Notes Payable (Locust) $35,000
Debit Interest Expense $875
Credit Cash Account $35,875
To record payment at maturity.
November 7:
Debit 9% Notes Payable (NBR Bank) $80,000
Debit Interest Expense $2,400
Credit Cash Account $82,400
To record payment at maturity.
Nov 28:
Debit Cash Account $42,000
Credit 8% Notes Payable (Fargo Bank) $42,000
To record the issue of 60-day, 8% note payable.
Dec. 31:
Debit Interest Expense $560
Credit Interest on Notes Payable $560
To accrue interest expense for one month.
Explanation:
Journal entries are used to initially record business transactions of Tyrell Co. as above. They show the two or more accounts involved in each transaction. The accounts that receive values are debited, while the others are credited. This also balances the accounting equation based on each transaction.
The exercise price on one of Chrisardan Companies call options is $20, its exercise value is $27, and its time value is $8. What are the options market value and the price of the stock
Answers
im gunna say say invest 15 dollars. i am not sure if thats what it wanted?
Assume Joe Harry sells his 25 percent interest in Joe's S Corp., Inc., to Tyrone on January 29. Using the daily allocation method, how much income does Joe Harry report if Joe's S Corp., Inc., earned $200,000 from January 1 to January 29 and a total of $1,460,000 from January 1 through December 31 (365 days)?
a. $28,000.
b. $50,000.
c. $112,000.
d. $200,000.
e. None of the above.
Answers
Answer:
$29,000
Explanation:
Joe sells 25% of his interest to Joe's S corporation
= 25/100
= 0.25
Therefore using the daily allocation method, the amount of income reported if Joe earns $200,000 from January 1st to January 29th and a total of $1,460,000 for 365 days
= 1,460,000/365 days × 29 days × 0.25
= 4,000×29×0.25
= $29,000
Hence the amount of income reported by Joe Harry is $29,000
A state has strict laws stating that all employees, including part-time workers, must be compensated with employer-provided health benefits. Which of the following could result from this legislation?
1. More workers will be hired "informally" and be paid surreptitiously in cash.
2. Wages will decrease.
3. Unemployment will increase.
4. Any of the above could result from the legislation.
Answers
Answer: Any of the above could result from the legislation
Explanation:
From the question, we are informed that a state has strict laws stating that all employees, including part-time workers, must be compensated with employer-provided health benefits.
The likely effect of this law is that there will be a reduction on wages as employer's will try as much as possible to reducce cost incurred due to the health related compensation. Also, unemployment will increase and more workers will be hired "informally" and be paid surreptitiously in cash. This is because the cost of the employers will increase and they may need to lay some workers off.
The Mahoney Company failed to accrue Rent Revenue on 12/31/23. The error was discovered on 2/1/24, before any cash was collected and after the 2023 books were closed. On 2/1/24, Mahoney would record:
Answers
Answer:
Mahoney would record record on the 2023 books A debit to rent receivables
Explanation:
As error of failure to accrue rent revenue on 12/31/2023 was discovered before closing of books, therefore on 02/01/2024 Mahoney would record on the 2023 books "A debit to rent receivables"
You need a 30-year, fixed-rate mortgage to buy a new home for $320,000. Your mortgage bank will lend you the money at a 6.15 percent APR for this 360-month loan. However, you can afford monthly payments of only $1,600, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment.
How large will this balloon payment have to be for you to keep your monthly payments at $1,600? Please show and explain all work.
Answers
Answer:
$362,353
Explanation:
In order to answer this question I prepared an amortization schedule to determine the remaining principal balance at the end of the 30th year.
The problem with this loan is that the interests charged for the first month only are $1,640. This means that your monthly payment will not even cover the interest expense which means that the principal will grow month after month. After 360 months, your loan balance will increase from $320,000 to $362,353.
An organization's tangible and intangible resources can be a source of competitive advantage, and these resources play an important role in determining an organization's capabilities and competencies.
A. True
B. False
Answers
Answer:
A. True
Explanation:
Tangible resources includes cash, inventory, machinery, land or buildings. they are assets that can be seen
Intangible resources are resources that cannot be seen
for example, a company has developed a resource that increases the amount of output a company produces at a lower cost. this resource would increase the capabilities of the company.
During the month of April, direct labor cost totaled $15,000 and direct labor cost was 40% of prime cost. If total manufacturing costs during April were $77,000, the manufacturing overhead was:
Answers
Answer:
Manufacturing overhead= $39,500
Explanation:
Giving the following information:
Direct labor= $15,000
Direct labor cost was 40% of prime cost.
Total manufacturing costs= $77,000
First, we need to calculate the prime cost:
Prime cost= direct material + direct labor
Prime cost= 15,000/0.4= 37,500
Now, we can determine the manufacturing overhead:
Manufacturing overhead= total manufacturing costs - prime costs
Manufacturing overhead= 77,000 - 37,500
Manufacturing overhead= $39,500
All of the following are items typically included in the job specification EXCEPT ________. educational requirements required compensation physical capabilities personality traits g
Answers
Answer:
Required compensation.
Explanation:
Job Specification provides details about the job as well as education, experiences and traits required to perform the job. Job Specification does not however disclose the required compensation as this follows agreement with successful candidates taking into account both the employer and employee circumstances.
The job specification does not provide the compensation.
What is job specification:
It gives the details related to the job also the education, experience are needed for performing the job. Moreover, the job specification provides the type of the job that the employee need to do perform. In additonal to this, it does not disclose the compensation requirement
Therefore, the second option is correct.
learn more about job here: https://brainly.com/question/24332840
The graphical probability distribution of ROE for a firm that uses financial leverage would tend to be more peaked than the distribution if the firm used no leverage, other things held constant.
A. True
B. False
Answers
Answer: False
Explanation:
The return on equity is used to know how profitable a business is when it's being compared to its equity.
The sentence in the question that the graphical probability distribution of ROE for a firm that uses financial leverage would tend to be more peaked than the distribution if the firm used no leverage, other things held constant is false.
The statement is not true because in such scenario, the graphical probability distribution will be less peaked than the distribution.
Bermuda Triangle Corporation (BTC) currently has 390,000 shares of stock outstanding that sell for $102 per share. Assume no market imperfections or tax effects exist. Determine the share price and new number of shares outstanding if: (Do not round intermediate calculations. Round your price per share answers to 2 decimal places, e.g., 32.16, and shares outstanding answers to the nearest whole number, e.g., 32.) a. BTC has a five-for-three stock split. b. BTC has a 10 percent stock dividend. c. BTC has a 37.0 percent stock dividend. d. BTC has a four-for-seven reverse stock split.
Answers
Answer and Explanation:
The computation of each points is shown below:-
a. BTC has a five-for-three stock split is
New price = Old price × Split ratio
= 102 × 3 ÷ 5
= 61.2
New shares outstanding = old shares outstanding ÷ Split ratio
= 390,000 × 5 ÷ 3
= 650,000
b. BTC has a 10 percent stock dividend is
New price = Old price ÷ (1 + Stock dividend)
= 102 ÷ (1 + 0.1)
= 92.73
New shares outstanding = Old shares outstanding × (1 + Stock dividend)
= 390,000 × (1 + 0.1)
= 429,000
c. BTC has a 37.0 percent stock dividend is
New price = Old price ÷ (1 + Stock dividend)
= 102 ÷ (1 + 0.37)
= 74.45
New shares outstanding = Old shares outstanding × (1 + Stock dividend)
= 390,000 × (1 + 0.37)
= 534,300
d. BTC has a four-for-seven reverse stock split is
New price = Old price × Split ratio
= 102 × (7 ÷ 4)
= 178.5
New shares outstanding = Old shares outstanding ÷ Split ratio
= 390,000 × (4 ÷ 7)
= 222,857.14
Toby purchased a 20-year par value bond with semiannual coupons at a nominal annual rate of 8% convertible semiannually at a price of 1,722.25. The bond can be called at par value 1,100 on any coupon date starting at the end of year 15. What is the minimum yield that Toby could receive, expressed as a nominal annual rate of interest convertible semiannually?
Answers
Answer:
3.22%
Explanation:
Here, we are interested in calculating the minimum yield that Toby could receive.
To calculate this, we use the YTM formula.
Before we apply this formula, we write out the parameters which we were given in the question.
Given that number of years, n = 15*2 = 30, Price, P = 1722.25, Face value, F = 1100, C = 0.08/2*1100 = 44
Using YTM approximation formula,
YTM = [C + (F – P)/n]/ (F + P)/2
YTM = [44 + (1100 – 1722.25)/30]/ (1100+1722.25)/2
YTM = 23.2583/1411.125
YTM = 1.61%
YTM = 1.61% x 2 = 3.22%
2. You are considering entry into a market in which there is currently only one producer (incumbent). If you enter and the incumbent prices low (fights) then you will both lose 10 million. If you enter and the incumbent accommodates than you both will earn 3 Million. If you stay out of the market you will earn nothing and the incumbent will earn 7 million. What is the best strategy for you as the entrant in the market.
Answers
Answer: a. You should enter if you expect the incumbent to accommodate
Explanation:
If you expect the incumbent to be accommodating then it is best to enter the market because you will earn 3 million along with the incumbent.
This will be a gain for the both of you that has a chance of success because fighting you will be to the detriment of the incumbent as they will then stand to lose 10 million like you will as well.
The option of the incumbent being accommodating is the best option for the both of you.
In the Schedule of Cost of Goods Manufactured and Cost of Goods Sold, the cost of goods manufactured is computed according to which of the following equations?
A. Cost of goods manufactured = Total manufacturing costs + Beginning finished goods inventory – Ending finished goods inventory.
B. Cost of goods manufactured = Total manufacturing costs + Beginning work in process inventory – Ending work in process inventory.
C. Cost of goods manufactured = Total manufacturing costs + Ending work in process inventory – Beginning work in process inventory.
D. Cost of goods manufactured = Total manufacturing costs + Ending finished goods inventory – Beginning finished goods inventory.
Answers
Answer:
B
Explanation:
The cost of goods manufactured calculates the total production cost of manufactured goods in a particular period
Sheridan Company has the following information available for September 2020. Unit selling price of video game consoles $400 Unit variable costs $320 Total fixed costs $25,600 Units sold 600 Compute the unit contribution margin.
Answers
Answer:
Contribution margin per unit= $80
Explanation:
Giving the following information:
Unitary selling price of video game consoles $400
Unit variable costs $320
To calculate the unitary contribution margin, we need to use the following formula:
Contribution margin= selling price - unitary variable cost
Contribution margin= 400 - 320
Contribution margin= $80
A firm's profit function is pi (q) = R(q) = C(q) = 40q - (110 + 20q + 10q^2).
1. What is the positive output level that maximizes the firm's profit (or minimizes its loss)?
2. What is the firm's revenue, variable cost, and profit? Should it operate or shut down in the short run?
3. The output level at which the firm's profit is maximized is q =. (Enter your response as a whole number.)
Answers
Answer:
1) [tex]\frac{d\pi (q) }{dq} = 40 - 20 - 20q = 0[/tex]
2) variable cost would be = 20 + 10 = 30, revenue = 40 , -100
3) Q = 1
Explanation:
The firm's profit function is given as
[tex]pi (q) = R(q) = C(q) = 40q - (110 + 20q + 10q^2).[/tex]
1) The positive output level that maximizes the firm's profit
can be expressed as the derivative of the given function
= [tex]\frac{d\pi (q) }{dq} = 40 - 20 - 20q = 0[/tex]
2) The firm's revenue, variable cost and profit
variable cost = 20 + 10q ( from the given function )
when q = 1 variable cost would be = 20 + 10 = 30
TR = 40q = revenue ( from given function)
when q = 1 then revenue = 40
hence variable cost is less than Revenue ( firm should operate in short run)
profit = Revenue - total cost = 40 - 140 = -100
3) The output level at which the firms profit is maximized is
q = 1
Dextra Computing sells merchandise for $17,000 cash on September 30 (cost of merchandise is $11,900). The sales tax law requires Dextra to collect 3% sales tax on every dollar of merchandise sold. Record the entry for the $17,000 sale and its applicable sales tax. Also record the entry that shows the remittance of the 3% tax on this sale to the state government on October 15.
Record the cash sales and 3% sales tax.
record the cost of sept. 30th sales.
record the entry that shows the remittance of the 3% tax on this sale to the state government on october 15.
please show the calculations as well.
Answers
Answer:
Explanation:
From the given information;
The Journal entries for Dextra Computing Merchandise can be computed as follows:
Date Account title Debit ($) Credit ($)
Sept 30 Sales Revenue 17000
Sept 30 Sales Tax Payable
(3% × 17000)= 0.03× 17000 510
Sept 30 Cash 17510
(To record the cash sales of merchandise)
Sept 30 Cost of goods sold 11900
Sept 30 Merchandise Inventory 11900
(To record the transfer of cost of merchandise
to cost of goods sold)
Oct 15 Sale Tax Payable
(3% × 17000)= 0.03× 17000 510
Cash 510
(To record the remittance of 3%
sales tax to the state government)
The supply of luxury boats is perfectly elastic, the demand for luxury boats is unit elastic, and with no tax on luxury boats the price is $22 million and 210210 luxury boats a week are bought. Now luxury boats are taxed 10%. What is the new quantity of boats sold and what is the governments tax revenue?
Answers
Answer:
New demand = 189 boats
Explanation:
Given:
Total demand = 210 boats
Price = $22 million
Tax increase = 10%
Find:
New demand
Governments tax revenue
Computation:
price increase by 10% so, demand decrease by 10%
New demand = Total demand [100% - 10%]
New demand = 210 [90%]
New demand = 189 boats
Governments tax revenue = 189[($22million + 10%) - $22million]
Governments tax revenue = 189[$24.2 - $22million]
Governments tax revenue = $415.8 million]
Prepare journal entries to record the following four separate issuances of stock.
1. A corporation issued 8,000 shares of $20 par value common stock for $192,000 cash.
2. A corporation issued 4,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $33,000. The stock has a $1 per share stated value.
3. A corporation issued 4,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $33,000. The stock has no stated value.
4. A corporation issued 2,000 shares of $75 par value preferred stock for $183,000 cash.
Answers
Answer:
1.
DR Cash $192,000
CR Common stock. $160,000
CR Paid-in capital in excess of par value - Common stock $32,000
Working
Common Stock = $20 * 8,000
= $160,000
Paid-in capital in excess of par value - Common stock = 192,000 - 160,000
= $32,000
2
DR Organization expenses $33,000
CR Common stock, $4,000
CR Paid-in capital in excess of stated value - common stock $29,000
Working
Common Stock = 1 * 4,000
= $4,000
Paid-in capital in excess of stated value, common stock = 33,000 - 4,000
= $29,000
3
DR Organization expenses $33,000
CR Common stock $33,000
4
DR Cash $183,000
CR Preferred stock $150,000
CR Paid-in capital in excess of par value - preferred stock $33,000
Working
Preferred Stock = 75 * 2,000
= $150,000
Paid-in capital in excess of par value - preferred stock = 183,000 - 150,000
= $33,000
If Tamarisk, Inc. realizes a loss of $9400 on a cash sale of office equipment having a book value of $93600, the total amount reported in the cash flows from investing activities section of the statement of cash flows is
Answers
Answer:
The total amount reported in the cash flows from investing activities section of the statement of cash flows is $84,200.
Explanation:
Cash flow from Investing Activities involve the Purchase and or sale of Capital Investments in the business.
The only cash item from Investing Activity for Tamarisk, Inc in the sale of office equipment is the Proceeds or Selling Price that it received in the sale transaction.
Calculation of the Sale Proceeds :
Hint : Open an Office Equipment Disposal T - Account
Office Equipment Disposal T - Account
Debit :
Book Value $93,600
Totals $93,600
Credit :
Profit and Loss $9,400
Proceeds (Balancing figure) $84,200
Totals $93,600
Conclusion :
The total amount reported in the cash flows from investing activities section of the statement of cash flows is $84,200.
Journalize the entry to record the receipt of payment of the note at maturity.
Cash 60,900
Notes Receivable 60,000
Interest Revenue 3,600
Answers
Answer:
Journal entry:
Debit Cash Account $63,600
Credit Notes Receivable $60,000
Credit Interest Revenue $3,600
To record the settlement of notes receivable and interest.
Explanation:
On maturity of the note, the customer is expected to settle account by paying for both the Notes and the Interest Due. The customer will pay $63,600 to settle the two accounts. Cash balance will increase to $124,800 from $60,900 by this transaction.
In your opinion, can exchange rate volatility be managed? Why or why not? Explain your answer.
Answers
The correct answer to this open question is the following.
What I think about exchange rate volatility is that investors have to learn to manage this volatility because it is part of the stock market on a daily basis. Indeed, it is the nature of the game. Managing foreign exchange or FX, as it is also known, is of the utmost importance in this globalized world of investments. The price of goods and products that are exported such as iron, steel, or any other commodity has been very volatile in recent years, that is why investors and countries have to hire experts to manage their operations. One of the resources that can help investors regarding this issue is to mitigate the uncertainty with futures or currency forwards.
A fund earned a net investment income (i.e. Ending Balance Starting Balance + Deposits/Withdrawals)) of 9200 during 1999. The beginning and ending balances of the fund were 100000 and 129200, respectively. A deposit was made at time K during the year. No other deposits or withdraws were made. The fund earned 8% in 1999 using the dollar-weighted method. Determine then date corresponding to time K
(a) April 1 (b) May 1 (c) July 1 (d) Sept. 1 (e) Oct. 1
Answer:________
Answers
Answer:
k = April 1 ( A )
Explanation:
Given data :
net investment income : $9200
Beginning balance = $100000
ending balance = $129200
deposit made
no withdrawals
interest earned = 8%
net investment ( $9200) = [ending balance - (starting balance + deposits/withdrawals )]
9200 = 129200 - 100000 - deposits
deposit = 129200 -100000 - 9200 = 20000
8% interest was earned on starting balance
= 8% of $100000 = $8000
interest earned on the deposit made = net income - interest earned on beginning balance = 9200 - 8000 = $1200
using the dollar-weighted method
assuming the deposit was made for Y months
interest earned on deposit = deposit * interest rate * (y/12)
1200 = 20000 * 8% * ( y /12 )
hence ( y/12) = 0.75 hence y = 9 months from December 31
which makes K = April 1
What's the answer to this question?
Answers
Inflation is a general rise in the level of prices experienced by people in a nation.
Answers
Answer:
True.
Explanation:
Inflation is an economic term that can be defined as the increase in the prices of a product on the market in a given period.
It can occur due to several factors, when there is an imbalance between supply and demand, then it is correct to say that when the demand for a product is greater than the supply, there will be an increase in prices and, consequently, inflation.
It can also occur when there are situations of monopoly, which is the pricing of a product controlled by a company.
Another factor that causes inflation is the increase in a company's production costs, which can be caused by factors such as scarcity, or economic crisis.
Uncontrolled inflation has a negative impact on the consumer's life, which starts to lose its purchasing capacity and has its quality of life reduced.
Romano’s Frozen Pizza Inc. has determined from its production budget the following estimated production volumes for 12'' and 16'' frozen pizzas for September:
Units
12" Pizza 16" Pizza
Budgeted production volume 15,200 26,900
There are three direct materials used in producing the two types of pizza. The quantities of direct materials expected to be used for each pizza are as follows:
12" Pizza 16" Pizza
Direct materials:
Dough 0.90 lb. per unit 1.50 lbs. per unit
Tomato 0.60 1.00
Cheese 0.80 1.30
In addition, Lorenzo’s has determined the following information about each material:
Dough Tomato Cheese
Estimated inventory, September 1 490 lbs. 230 lbs. 275 lbs.
Desired inventory, September 30 580 lbs. 185 lbs. 340 lbs.
Price per pound $0.50 $2.20 $2.60
Required:
Prepare September’s direct materials purchases budget for Lorenzo’s Frozen Pizza Inc.
Answers
Answer:
Due to lack of space I prepared an excel spreadsheet: