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3 years ago

Managers use a predetermined overhead rate for which of the following reasons?

Business

1 answer:

Rashid [163]3 years ago

4 0

Answer:

Option A and B

Explanation:

The company desires to estimate the cost of the job so that it can minimize it by emphasizing control. This is one of the major reasons why the companies estimate cost of the job, product or service. So option A is correct.

Option B is also correct because the companies have to form contracts with its customers and for that reason predetermined overhead rates helps a lot estimating the price of the product which the company and customer can agree upon.

Option C is incorrect because predetermined costs are estimates and estimates are not always accurate.

Option D is false because daily recording of overheads requires predetermined overhead rates which is adjusted at the month end or quarter end or year end. So its not useless at all.

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The Horizon Company will invest $60,000 in a temporary project that will generate the following cash inflows for the next three

Sholpan [36]

Answer:

$ -3,163.04

Explanation:

The net present value is the present value of after tax cash flows from an investment to the amount invested.

The NPV can be found using a financial calculator:

Cash flow in year 0 = -$60,000

Cash flow in year 1- $ 15,000

Cash flow in year 2- $25,000

Cash flow in year 3- $40,000 - $10,000 = $30,000

I = 10%

NPV = $-3,163.04

The project should not be embarked upon because the cost of the project is greater than the present value of the after tax cash flows. The NPV is negative.

To find the NPV using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

I hope my answer helps you

3 0

2 years ago

Suppose the economy is experiencing an output gap of –3%. a. Select each response that indicates how monetary policy or fiscal p

igor_vitrenko [27]

Answer:

Suppose the economy is experiencing an output gap of –3%

a. Monetary policy or fiscal policy can be used to raise actual output toward potential output when:

The government can increase its spending or reduce taxes, which will shift the IS curve to the right and increase GDP.

The Fed can reduce the interest rate, which will shift the MP curve down and increase GDP.

b. The policies identified in part a,

can be used together to raise actual output toward potential output.

Explanation:

Investment-Savings (IS) curve shows all the levels of interest rates and output (GDP) at which an economy's total desired investment (I) equals its total desired saving (S). This equilibrium can be achieved at a level of interest rate that maximizes output. The IS curve slopes downward, and to the right because at a lower interest rate, investment is higher, which produces more total output (GDP) for the economy.

7 0

2 years ago

A municipal bond has yield to maturity of 4.83 percent. An investor with a marginal tax rate of 35 percent is indifferent betwee

mezya [45]

Answer: 7.43%

Explanation:

The yield to maturity simply refers to the total return that is expected on a bond as long as the bond is held till it matures.

In this case, since the investor is indifferent between this municipal bond and an otherwise identical taxable corporate bond, the yield to maturity of the corporate bond will be:

4.83% = Corporate bond YTM × ( 1- 35%)

4.83% = Corporate bond YTM × 65%

Corporate bond YTM = 4.83% / 65%

Corporate bond YTM = 0.0483/0.65

Corporate bond YTM = 7.43%

The yield to maturity of the corporate bond is 7.43%

3 0

3 years ago

How do the choices consumers make impact business decisions?

ki77a [65]

Answer: B

Explanation: Businesses are run by consumers, so the choices those consumers make will find their way into business decisions. b. Businesses can track the trends of what consumers are and are not buying, and will attempt to cater to the desires of those who provide them with profits.

3 0

3 years ago

Read 2 more answers

Suppose that the rural part of a country is hit by a major earthquake

stiv31 [10]

Answer:

(a) How this episode is likely to affect the economic well-being of people in the country

In the short-run, there will be an increase in labor demanded, increasing jobs to build homes and repair the damage caused by the earthquake. In the long-run, things will begin to go back to normal.

(b) How this episode is likely to affect the economy’s measured GDP

In this case, GDP measurements will shift causing less of an input in private spending and an increase in government spending due to subsidies to increase home-building.

6 0

3 years ago