Answer: a.85,000
Explanation:
When using Delta to determine how many units of the underlying stock one should hold to hedge a short position, the following formula is used;
= Delta * No. of positions
= 0.85 * ( 100 * 100)
= 8,500
8,500 units of the underlying stock should be held to hedge a short position in 100 call option contracts with a contract multiplier of 100.
A purchase of land in exchange for a long-term note payable is reported in the investing section of the statement of cash flows.
A. True
B. False
Answer:
false
Explanation:
Lightning Remote Cars manufactures remote control cars for children. Historically, Lightning Remote Cars has manufactured their own tires they sell. However, a tire manufacturer has recently approached Lightning Remote Cars with an offer to produce their tires for them for $1.40 per tire. Lightning Remote Cars anticipates needing 50,000 tires this year to meet the demand for their remote control cars. What would be the total impact on operating income if the tires are purchased from the outside supplier
Answer:
operating income would decrease by $2,500 if tires are purchased
Explanation:
offer from outside vendor = $1.40 per tire
yearly demand = 50,000 tires
production costs:
direct materials $0.25direct labor $0.80variable manufacturing overhead $0.30fixed costs $0.50total costs = $1.85
total avoidable costs = $1.35
make tires buy tires differential amount
produce tires $92,500 $0 $92,500
buy tires $0 $95,000 ($95,000)
total $92,500 $95,000 ($2,500)
operating income would decrease by $2,500 if tires are purchased
Answer:
2,500
Explanation:
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (7,100 units) $ 227,200 $ 32.00 Variable expenses 134,900 19.00 Contribution margin 92,300 $ 13.00 Fixed expenses 54,800 Net operating income $ 37,500 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 80 units? 2. What would be the revised net operating income per month if the sales volume decreases by 80 units? 3. What would be the revised net operating income per month if the sales volume is 6,100 units?
Answer:
1. $38,540
2. $37,500
3. $24,500
Explanation:
1. The computation of revised net operating income per month if the sales volume increases by 80 units is shown below:-
Net operating income = Sales - Variable expenses - Fixed expenses
= (71,80 × $32) - (7,180 × $19) - $54,800
= $229,760 - $136,420 - $54,800
= $38,540
2. The computation of revised net operating income per month if the sales volume decreases by 80 units is shown below:-
Net operating income = Sales - Variable expenses - Fixed expenses
= (71,00 × $32) - (7,100 × $19) - $54,800
= $227,200 - $134,900 - $54,800
= $37,500
3. The computation of revised net operating income per month if the sales volume is 6,100 units is shown below:-
Net operating income = Sales - Variable expenses - Fixed expenses
= (61,00 × $32) - (6,100 × $19) - $54,800
= $195,200 - $115,900 - $54,800
= $24,500
Ansara Company had the following abbreviated income statement for the year ended December 31, 20Y2:
(in millions)
Sales $25,790
Cost of goods sold $21,920
Selling, administrative, and other expenses 2,320
Total expenses $24,240
Income from operations $1,550
Assume that there were $5,620 million fixed manufacturing costs and $1,280 million fixed selling, administrative, and other costs for the year. The finished goods inventories at the beginning and end of the year from the balance sheet were as follows:
January 1 $3,060 million
December 31 $3,570 million
Assume that 20% of the beginning and ending inventory consists of fixed costs. Assume work in process and materials inventory were unchanged during the period.
Prepare an income statement according to the variable costing concept for Ansara Company for 20Y2.
Ansara Company
Variable Costing Income Statement
For the Year Ended December 31, 20Y2 (in millions)
Sales $ 21,920
Variable cost of goods sold:
Beginning inventory $ 1,841
Variable cost of goods manufactured 12,710
Ending inventory 2,149
Total variable cost of goods sold 18,670
Manufacturing margin $ 3,250
Variable selling and administrative expenses 870
Contribution margin $ 2,380
Fixed costs:
Fixed manufacturing costs $ 4,820
Fixed selling and administrative expenses 1,100
Total fixed costs 5,920
Income from operations $
Answer:
Ansara Company
Variable Costing Income Statement
For the Year Ended December 31, 20Y2 (in millions)
Sales $25,790
Variable cost of goods sold:
Beginning inventory ($3,060 × 80%) $2,448
Variable cost of goods manufactured ($21,920 × 80%) $17,536
Ending inventory ($3,570 × 80%) ($2,856)
Total variable cost of goods sold ($17,128 )
Contribution margin $ 8,662
Less (Period) Expenses :
Fixed manufacturing costs ($5,620)
Selling and administrative expenses :
Fixed selling and administrative expenses ($1,280)
Variable selling and administrative expenses ($1,040)
Income from operations $772
Explanation:
Variable Costing :
Product Cost = Only Variable Manufacturing Cost
= This is 80% of Cost of Goods Sold from our senario.
Period Cost = Fixed Manufacturing Costs + All Non - Manufacturing Cost (Variable and Fixed)
Note : Variable selling and administrative expenses is what remains after fixed selling, administrative, and other costs are removed from the total of selling, administrative, and other costs.
Salary expense was 15.5% of sales this year. If sales this year are $1,300,000 and are forecasted to be $1,500,000 next year, what is forecasted salary expense next year if all expenses maintain a constant percent of sales?
Answer:
Salary expense next year=$232,500
Explanation:
The ratio of expense to ales is an important which helps in the management and control overhead.
We can be predict the Salary expense using the information given about the relationship between salary expense and sales .
If salary expense is 15.5% of sales, then Salary expense this year =
15.5% × 1,300,000=$201,500
Salary expense next year = 15.5% × foretasted sales next year
= 15.5% × 1,500,000 = $232,500
We use 15.5% because the relationship between the expenses and the sales in proportion is expected to remain the same
Salary expense next year=$232,500
If a small electric automobile manufacturer is able to gain the social return generated by its electric motor, its demand for financial capital would Group of answer choices
Answer: shift to the left
Explanation:
When a small electric automobile manufacturer is able to gain the social return generated by its electric motor, then its demand for financial capital will shift to the left.
This means that since the financial capital shift to the left, there will be a reduction in the demand for financial capital.
Bob is evaluating a bond issue to determine the right price for the bond. In his evaluation, he gathers the following information:
N = 8 years INT = .025 or 2.5% PMT = $25 FV = $1,000 (par value)
What is the above bond issue worth in today's dollars?
a. $1,000
b. $1,181.63
c. $1,200.50
d. None of the above
Answer:
The price of the bond is $1000. Thus, option a is the correct answer.
Explanation:
The price of a bond is calculated using the present value of the interest payments made by the bond, which is in the form of an annuity, plus the present value of the face value of the bond. The present value is calculated by discounting the annuity of interest and the face value by the YTM or yield to maturity. In case YTM is not provided, we assume that it is same as or equal to the coupon rate paid by the bond.
The formula for the price of the bond is attached.
Bond Price = 25 * [(1 - (1+0.025)^-8) / 0.025] + 1000 / (1+0.025)^8
Bond Price = $1000
The following data concerns a proposed equipment purchase: Cost$144,000 Salvage value$4,000 Estimated useful life 4years Annual net cash flows$46,100 Depreciation methodStraight-line Ignoring income taxes, the annual net income amount used to calculate the accounting rate of return is:
Answer: $74,000
Explanation:
The Average Investment refers to the average cash invested into a particular project and is useful in calculating the rate of return. The simple formula is to add the beginning value of the asset to its ending value and divide this by 2.
The ending value in this case would be the salvage value;
Average Investment = [tex]\frac{Beginning Cost of Machine + Salvage Value}{2}[/tex]
= [tex]\frac{144,000 + 4,000}{2}[/tex]
= $74,000
"A technical analyst has identified a resistance level for ABC stock at $81 and a support level at $75. The stock is currently trading at $77 and the analyst expects the stock to break the resistance level. Which order is appropriate to profit if the resistance level is broken?"
Answer:
Buy 100 ABC at $82 Stop
Explanation:
In the financial markets a resistance is an upper limit block on the market moving upward (buy). While the support is the lower limit on the market moving down (sell).
In this scenario we have a support of $75, resistance of $81 and the stock.is currently trading at $77. Just below the resistance.
If the analyst expects the stock to break the resistance of $81 then he should set a trade that is a buy since the market will go above $81.
When the market breaks a resistance it is expected to sky rocket, so the analyst will set a trade stop at $82, so that when the market is coming back down to the resistance level it will stop before it gets to $81.
On the other hand if a support is expected to be broken a sell trade is placed.
The holder of a promotional permit may:
Provide alcohol to a minor
Serve an intoxicated person
Offer in-store wine and beer samples
Sell alcohol to members in a private club
Answer:
Offer in-store wine and beer samples.
Explanation:
Promotional permit was established to allow a person promote sale of alcoholic beverages on behalf of the manufacturer. Such alcoholic beverage must however be sold on the premises of the licenced holder.
A promotional permit holder, according to the Texas Alcoholic Beverage Commission,which was established in 1935, may involve in the sales of alcoholic beverages in a state or premises of the license holder. It is to be noted that the license holder must qualify enough before being granted the permit and must also pay some fees before carrying on such activities.
As a holder of a promotional permit, you are allowed to offer in-store wine and beer samples.
A person with a promotional permit:
Is allowed to promote the sale of a certain brand of alcohol Must be in a contract with the brand they are promotingIn order to promote the brand of alcohol, the person may use sales strategies such as offering in-store wine and beer samples to people to get them to try out the brand that they are promoting.
In conclusion, a holder of a promotional permit can offer in-store wine and beer samples.
Find out more at https://brainly.com/question/5796198.
Provide an example that shows variable costing is divided among different activities, and that each activity has its own predetermined variable overhead criterion. Explain your example in detail and provide in-text citations.
Answer:
Variable Expense - Cost driver
Machine setup cost - Number of Setups
Machine running cost - Machine hours used
Ordering Cost - No of orders placed
Labor Cost - Labor hours worked
Raw Material - Material usage rate
Transportation Cost - No of Orders delivered.
Explanation:
An organizational structure in one in which certain activities are aligned to achieve the ultimate goal of the organization. Similar types of set of machines together to get particular output product. The cost drivers in organizational structure can influence the output of a company.To determine the product cost per unit using the absorption costing we find the per unit rate for Variable Overheads for the activity by diving the total variable cost by its cost driver.
To retain high-performing engineers, a large semiconductor company provides corporate stock as part of the compensation package. In one particular year, the company offered 1000 shares of either class A or class B stock. The class A stock was selling for $30 per share at the time, and stock market analysts predicted that it would increase at a rate of 6% per year for the next 5 years. The class B stock was selling for $20 per share, but its price was expected to increase by 12% per year. At an interest rate of 8% per year, which stock should the engineers select on the basis of present worth analysis and a 5-year planning horizon?
Answer:
class A stocks
Explanation:
in 5 years, class A stock will be worth = $30 x (1 + 6%)⁵ = $40.15
in 5 years, class B stock will be worth = $20 x (1 + 12%)⁵ = $35.25
now we need to determine the present value if each stock:
class A stock present value = $40.15 / (1 + 8%)⁵ = $27.33
class B stock present value = $35.25 / (1 + 8%)⁵ = $23.99
since the present value of class A stock is higher, then the engineers should select that type of stocks.
From an AIDA model perspective, ________ advertising seeks to gain awareness and initial interest and is used mostly in the early growth stages of a product.
Answer:
Pioneering advertising
Explanation:
In this question, the term that is being mentioned is known as Pioneering advertising. This type of advertising refers to the launch campaign of a new product category, instead of actually marketing for a single specific product in an existing marketplace. This is used in the early growth stages of a product when it initially launches in order to make customers aware of its arrival and explain what the product can offer.
Aladdin Jets is attempting to build an airplane that is made by welding the skin (outside layer) of the plane. The technique is much less expensive than an alternative riveting technology. The firm is also using a new type of jet engine with superior efficiency. The new entrant is entering a market that is realizing a substantial increase in competition. Which of the following would be strategies that the firm is attempting?
a. Cost reduction
b. Product differentiation
c. reduction in competitive intensity
d. a and b
e. all of the above.
Answer: Option D( a and b)
Explanation:
From the question, we are informed that Aladdin Jets wants to build an airplane that is made by welding the skin of the plane and that the technique is much less expensive than an alternative riveting technology.
We are further informed that the firm is also using a new type of jet engine with superior efficiency. The above analysis shows that the firm is using a product differentiation strategy and also reducing costs. While the company is trying out new things, it's also trying to minimize cost.
Your portfolio is comprised of 40 percent of stock X, 15 percent of stock Y, and 45 percent of stock Z. Stock X has a beta of 1.24, stock Y has a beta of 1.49, and stock Z has a beta of 0.41. What is the beta of your portfolio?
Answer:
Portfolio beta = 0.904
Explanation:
The portfolio beta is the weighted average of all the beta associated with each of the different stock making up the portfolio. The betas are weighted using the probability associated with each of the stock.
Portfolio beta = WaRa + Wb+Rb + Wn+Rn
W- weight of the beta, R- Stock beta -
W- Probability of the beta, R- stock beta
Note that the sum of the probability of different outcomes should equal to one. Hence, the probability of economy being normal is
Portfolio beta = (0.4 × 1.24) + (0.15 × 1.49) + ( 0.45 ×0.41) =0.904
Portfolio beta = 0.904
You purchased a bond 69 days ago for $891.26. You received an interest payment of $24.00 56 days ago. Today the bond’s price is $884.89. What is the holding period return (HPR) on the bond as of today?
Answer:
1.97%
Explanation:
The formula to calculate the holding period return is:
HPR=(Income generated+(ending value-initial value)/Initial value)*100
Income generated= $24
Ending value= $884.89
Initial value= $891.26
HPR=(24+(884.89-891.26)/891.26)*100
HPR=(24+(-6.37)/891.26)*100
HPR=(17.63/891.26)*100
HPR=0.0197*100
HPR= 1.97%
According to this, the holding period return (HPR) on the bond as of today is 1.97%.
"A higher price level will increase the demand for money, but expectations of a rise in the price level will reduce the demand for money." Is this statement true or false according to the monetary approach? Why?"
Answer:
The statement is True
Explanation:
A higher price level is a term that describes an economic condition in which more money is required to purchase a given amount of goods and services, at a given period, tland this leads to inflation overtime.
However, with a higher expected price level, it implies that a decline in the real value of a constant nominal amount of money balances is expected. Thus, there is an high tendency among people to substitute away from holding money and toward holding non-liquid assets whose prices may rise with the in the foreseeable future.
Which of the following entries would be made to record $20,800 of labor-80% of which is direct, and 20% of which is indirect-to jobs?
A. Work in Process Inventory 20,800
Wages Payable 20,800
B. Manufacturing Overhead 20,800
Manufacturing Wages 20,800
C. Work in Process Inventory 16,640
Manufacturing Overhead 4,160
Wages Payable 20,800
D. Wages Payable 20,800
16,640
WIP Inventory
Manufacturing Inventory 4,160
Answer:
Option C
Explanation:
Entry: DEBIT CREDIT
Work in Process Inventory 16,640
Manufacturing Overhead(w) 4,160
Wages Payable 20,800
Working: Manufacturing Overhead = 20,800 x 40% = $4,160
Note: In order to find out the work in progress and manufacturing Overhead we will consider sum of all direct cost as Work in progress and allocate the sum of indirect to Manufacturing Overheads.
The goal of collaborative planning, forecasting, and replenishment (CPFR) is to improve operational efficiency and manage inventory.
a. True
b. False
Answer:
Option "a" = true.
Explanation:
"The goal of collaborative planning, forecasting, and replenishment (CPFR) is to improve operational efficiency and manage inventory"
The statement given above is right or CORRECT and TRUE(option a).
The concept of "Collaborative Planning, Forecasting and Replenishment" was first brought into limelight in the year 1995. Collaborative Planning, Forecasting & Replenishment make sure that a terminology or say a concept in commerce which is know as "Integration of supply chain" is improving greatly.
The collaborative planning, forecasting, and replenishment (CPFR) helps to improve operational efficiency by reducing costs such as that of logistics, transportation and many more.
Make-or-Buy Decision Somerset Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $57 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 41% of direct labor cost. The unit costs to produce comparable carrying cases are expected to be as follows: Direct materials $24 Direct labor 20 Factory overhead (41% of direct labor) 8.2 Total cost per unit $52.2 If Somerset Computer Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable factory overhead costs associated with the cases are expected to be 15% of the direct labor costs. a. Prepare a differential analysis dated April 30 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the carrying case. If required, round your answers to two decimal places. If an amount is zero, enter "0". Differential Analysis Make Carrying Case (Alt. 1) or Buy Carrying Case (Alt. 2) April 30 Make Carrying Case (Alternative 1) Buy Carrying Case (Alternative 2) Differential Effects (Alternative 2) Unit costs: Purchase price $ $ $ Direct materials Direct labor Variable factory overhead Fixed factory overhead Total unit costs $ $ $ b. Assuming there were no better alternative uses for the spare capacity, it would to manufacture the carrying cases. Fixed factory overhead is to this decision.
Answer:
A. Total units cost for Make =$47
Total units cost for Buy=$57
B) I would advice that Decision Somerset Computer Company should manufacture because the Total units cost for Make which is Alternative 1 is cheaper or lesser than that of Buy which is Alternative 2.
Explanation:
A. Preparation of the differential analysis to determine whether the company should make (Alternative 1) or (Alternative 2)
DIFFERENTIAL ANALYSIS for Decision Somerset Computer Company
Particulars Make Buy Difference
Purchase price $0 $57 $57
Direct material $24 $0 ($24)
Direct labor $20 $0 ($20)
Variable factory overhead (15% of Labor) $3.00 $0 ($3.00)
Fixed factory overhead $0 $0 $0
Total unit costs $47.00 $57 $10.00
B) I would advice that Decision Somerset Computer Company should manufacture because the Total units cost for Make which is Alternative 1 is cheaper or lesser than that of Buy which is Alternative 2.
A university bookstore buys mechanical pencils from a wholesaler. The wholesaler offers discount for large order quantity per shipment according to the following price schedule:
Order Quantity Price Per Unit
1 to 200 $4.00
201 to 1,000 $3.60
1,001 to 2,000 $3.40
2,001 and greater $3.25
The bookstore expects an annual demand of 2,500 units. It costs $10 to place an order, and the annual cost of holding a unit in stock is 30% of the unit’s procurement price. Determine the best order quantity.
Answer:
226 units
Explanation:
Formula : [tex]\sqrt{\frac{2 * Annual Demand * Ordering Cost}{Holding Cost}[/tex]
[tex]\sqrt{\frac{2*2500*10}{0.3*3.25} }[/tex] = 226
The economic order quantity is the minimum amount of inventory that a seller must keep to demand and lower the holding cost. The reorder point is the inventory management system in which a certain level of inventory is set as a trigger for reordering the stock. Ordering cost is determined by the number of order placed.
Suppose that on Valentine's Day, the demand for both roses and greeting cards increases by the same percentage amount. However, the price of roses increases by more than the price of greeting cards. Based on this information, you can conclude that the supply of Valentine's card:_______.
Answer:
The correct answer is: the supply of the greeting cards is less elastic than the one of the roses.
Explanation:
To begin with, the elasticity show how much the price and the quantity are related by indicating the variation that happens to one of them when the other changes. Therefore that the supply of the greeting cards is less sensitive to price because when the quantity demanded increased the price did not change as much as the roses due to the fact that the sellers were not encourage as much as the sellers of the roses to produce more and therefore to increase the price of the cards. So to sum up, when the price changed the sellers were not encourage to increase the production of the cards as much as the production of the roses because of its elasticity.
Answer:
the supply of the greeting cards is less elastic than the one of the roses.
Explanation:
One measure of ____ is the extent to which the work of the department affects the final output of the organization.
Answer:
Centrality
Explanation:
Remember, a less central organization means more freedom. However, when the work of the departments in an organization can adversely affects the final output of the organization it tells us how central the organization is.
This Implies that the organization is following a structured system in which flexibility is not possible, and as a result any issues at other departments might affect output.
Jacobsen Corporation prepares its financial statements applying U.S. GAAP. During its 2016 fiscal year, the company reported before-tax income of $621,000. This amount does not include the following two items, both of which are considered to be material in amount: Unusual gain $201,000 Loss on discontinued operations (301,000) The company's income tax rate is 30%. In its 2016 income statement, Jacobsen would report income from continuing operations of:
Answer:
Jacobsen Corporation
Income from continuing operations of $621,000 will be reported.
Explanation:
The income from continuing operations is the same thing as the operating income. It is the pre-tax income that is reported on Jacobsen Corporation's income statement for the year ended December 31, 2016. The tax rate of 30% is applied on this figure to obtain the income tax expense for the year. But, for Jacobsen that has other unusual items, these are taken into consideration before the income tax is imputed to obtain the after-tax income.
Giannitti Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the upcoming year appear below: Estimated machine-hours 72,700 Estimated variable manufacturing overhead $ 3.30 per machine-hour Estimated total fixed manufacturing overhead $ 838,730 The predetermined overhead rate for the recently completed year was closest to:
Answer:
The predetermined overhead rate for the recently completed year was closest to: $11.54 per machine-hour
Explanation:
Predetermined Overheads = Budgeted Fixed Overheads / Budgeted Activity
= $ 838,730 / 72,700
= $11.536864 or $11.54 per machine-hour.
A growing population encourages economic growth as it creates a larger workforce. Suppose a surge in immigration increases a country's total population and its overall economic output increases. As a result, the country's real GDP increases from $304,000 to $316,500. What is the percent change in real GDP
Answer:
4.11%
Explanation:
the percentage change in real GDP = [(new real GDP - old real GDP) / old real GDP] x 100 = [($316,500 - $304,000) / $304,000] x 100 = 4.11%
Generally a surge in immigration will result in both higher nominal and real GDP, but what should be more important is how real GDP per capita changes. If real GDP per capita increases, then the inflow was positive and made the economy grow for better. If real GDP per capita decreases, even if total real GDP increases, then the economy is not doing better.
For each scenario, identify which argument is being used to justify trade protectionism.
Argument:
1. Job creation argument
2. National Security argument
3. Infant industry argument
a. Politicians in a small nation want to impose tariffs on foreign food because they believe the nation is too dependent on foreign producers.
b. Lobbyists argue that by prohibiting the importation of manufactured goods, the domestic manufacturing industry will create thousands more jobs.
c. Brazil imposes high tariffs for computer imports so small, domestic manufacturers can develop the technology needed to compete with foreign competitors.
d. Lobbyists argue that raising import tariffs on foreign oil will lead to more domestic jobs in the domestic energy industry.
Answer:
a. Politicians in a small nation want to impose tariffs on foreign food because they believe the nation is too dependent on foreign producers.
2. National Security argumentThis argument is generally used on high tech products, but it is sometimes used to support other industries that are considered essential and very important for a country. The problem is that it always results in higher domestic prices benefiting only a few.
b. Lobbyists argue that by prohibiting the importation of manufactured goods, the domestic manufacturing industry will create thousands more jobs.
1. Job creation argumentUnder this policy, politicians think that they can substitute imports by local products which would favor the trade balance and also generate jobs. The problem is that domestic prices might be very high and consumers will be forced to pay those high prices. Also, other economies can retaliate and the country's exports might be negatively affected.
c. Brazil imposes high tariffs for computer imports so small, domestic manufacturers can develop the technology needed to compete with foreign competitors.
3. Infant industry argumentThis argument is used by politicians that claim that infant industries (or recent, new industries) need to be protected in order to be able to function, prosper and grow. The problem with this argument is that industries operate under a bubble and consumers are charged very high prices for obsolete technology.
d. Lobbyists argue that raising import tariffs on foreign oil will lead to more domestic jobs in the domestic energy industry.
1. Job creation argumentAgain, under this policy, politicians think that they can substitute imports by local products which would favor the trade balance and also generate jobs. The problem is that domestic prices might be very high and consumers will be forced to pay those high prices.
_______________ of well-to-do individuals often put their own money into small new companies at an early stage of development, in exchange for owning some portion of the firm. Group of answer choices
Answer: C. A Network
Explanation:
One of the ways of raising capital is through the use of Angel Investors. These are usually well off individuals with excess cash for investment who look for companies to invest in at an early stage because they are trying to gain a positive return when the companies become successful.
To make their funds more substantial and their services easier to reach, Angel investors form networks to enable them achieve their mission of putting their own money into small new companies at an early stage of development, in exchange for owning some portion of the firm.
Which of the following is a characteristic of a firm’s optimal dividend policy? It maximizes the firm’s stock price. It maximizes the firm’s return on equity. It maximizes the firm’s earnings per share. It maximizes the firm’s total assets.
Answer:
It maximizes the firm’s stock price.
Explanation:
The correct answer is “it maximizes the firm’s stock price” because the optimal dividend policy allows the variable risk parameters and it maximizes the firm’s value. Moreover, the dividend policy attracts the shareholders and it maintains the firm’s or the company’s worth in the market. Therefore, the optimal payment of dividend increases or maximizes the stock price.
Based on predicted production of 28,000 units, a company anticipates $574,000 of fixed costs and $511,000 of variable costs. The flexible budget amounts of fixed and variable costs for 26,000 units are
Answer:
$574,000 fixed costs and $474,500 variable cost
Explanation:
According to the predicted production of 28,000 units, a company has a fixed cost of $574,000
The variable costs is $511,000
Therefore the flexible budget amount for the fixed and variable costs when 26,000 units are produced can be calculated as follows
The fixed costs still remains constant at $574,000
Variable cost = 511,000/28,000×26,000
= 18.25×26,000
= $474,500
Hence the fixed cost is $574,000 and the variable cost is $474,500