A balance is ____

Two companies share a market, in which they currently make $5,000,000 each. Both need to determine whether they should advertise

snow_tiger [21]

Answer: Please refer to Explanation.

Explanation:

Two Companies. We shall call them A and B.

If A and B decide not to advertise, they both get $5,000,000.

If A advertises and B does not then A captures $3 million from B at a cost of $2 million meaning their payoff would be,

= 5 million - 2 million + 3 million

= $6 million.

A will have $6 million and B will have $2 million as $3 million was captured from them. This scenario holds true if B is the one that advertises and A does not.

If both of them Advertise, they both reduce their gains by $2 million while capturing $3 million from each other so they'll essentially both have just $3 million if they both decide to advertise.

With the above scenarios, it is better for both companies to ADVERTISE if there is NO COLLUSION. This is because it ensures that they do not get the lowest payoff of $2 million if the other company decides to advertise and they do not.

However, if they DO COLLUDE. They must both decide that NONE of them SHOULD ADVERTISE and this would leave them with their original $5 million each which is a higher payoff than the $3 million they will both receive if they were both advertising.

3 0

3 years ago

Troy has $50 a month transferred electronically from his checking account to his savings account. This is an example of:

kupik [55]

Answer:

Saving plan

Explanation:

The saving plan are the life insurance plans that offers the various opportunity to an individual in order save and accumulated the fund for the upcoming future

Since Troy has $50 a month and the same is transferred electronically from his checking account to his saving account so automatically he saves each month

Therefore the same represent the saving plan

7 0

3 years ago

Hernandez Builders has a gross payroll for January amounting to $500,000. The following amounts have been withheld: Income taxes

erik [133]

Answer:

The amount of net pay recorded by Hernandez is $380,650

Explanation:

Gross Pay $500,000

Income Tax $63,000

Social security $31,000

Medicare $7,250

Charitable contribution $5,000

Union Dues $10,000

Unemployement Tax $3,100

Net Pay $380,650

Therefore, The amount of net pay recorded by Hernandez is $380,650

6 0

3 years ago

____________the market school aruges that forward exchange rates do the best possible job for forecasting future spot exchange r

rjkz [21]

Answer:

Efficient market school.

Explanation:

Efficient market school is the market school which argues that forward exchange rates do the best possible job for forecasting future spot exchange rates, so investing in exchange rate forecasting services would be a waste of time because it is impossible to have a consistent alpha generation on a risk adjusted excess returns basis as market prices are only affected by new informations.

The efficient market school also known as the efficient market hypothesis (EMH) is a hypothesis that states that asset (share) prices reflect all information and it is very much impossible to consistently beat the market.

Also, forward exchange rates are exchange rates controlling foreign exchange transactions at a specific future date or time.

<em>Hence, according to the efficient market school it would be a waste of time investing in exchange rate forecasting services because all the information about an asset or security is already factored into their prices and as a result of the randomness of the market. </em>

8 0

3 years ago

Marcelino Co.'s March 31 inventory of raw materials is $88,000. Raw materials purchases in April are $530,000, and factory payro

shtirl [24]

Answer:

Marcelino Co.

a. Total materials purchases = $530,000

b. Direct materials used in production:

Beginning balance of direct materials = $73,000

Current direct materials used = 442,000

Total materials used in production = $515,000

c. Direct labor paid and assigned to Work in Process Inventory:

Job 307 Job 308 Total

Beginning Direct labor $17,000 $17,000

Current Direct labor 153,000 $102,000 255,000

Total Direct labor $170,000 $102,000 $272,000

d. Indirect labor paid and assigned to Factory Overhead:

Indirect labor $28,000

Applied = $27,720 (99% ($193,000/$195,000))

e. Overhead costs applied to Work in Process Inventory

=

Job 307 Job 308 Total

76,500 51,000 $127,500

f. Actual overhead costs incurred and paid in cash:

Indirect materials $51,000

Indirect labor, $28,000

Factory rent, $40,000

Factory utilities, $25,000

Total overhead costs = $144,000

g. Transfer of Jobs 306 and 307 to Finished Goods Inventory:

Job 307 Job 308 Total

Balances on March 31

Direct materials $42,000 $42,000

Direct labor 17,000 17,000

Applied overhead 8,500 8,500

Costs during April

Direct materials 210,000 $100,000 $310,000

Direct labor 153,000 102,000 255,000

Applied overhead 76,500 51,000 127,500

Total cost $507,000 $253,000 $760,000

h. Cost of goods sold for Job 306 = $349,000

i. Revenue from the sale of Job 306 = $700,000

j. Assignment of underapplied overhead to the Cost of Goods Sold account:

Total overhead applied = $179,000

Total overhead incurred = 195,000

Underapplied overhead = $16,000

Explanation:

a) Data and Calculations:

Raw materials Inventory (March 31) $88,000

Purchases of raw materials during April = $530,000

Factory Payroll cost = $386,000

Overhead costs =

Indirect materials $51,000

Indirect labor, $28,000

Factory rent, $40,000

Factory utilities, $25,000

Factory equipment depreciation, $51,000

Total overhead costs = $195,000

Job 306 Job 307 Job 308 Total

Balances on March 31

Direct materials $31,000 $42,000 $73,000

Direct labor 21,000 17,000 38,000

Applied overhead 10,500 8,500 19,000

Balances $62,500 $67,500 $130,000

Costs during April

Direct materials 132,000 210,000 $100,000 $442,000

Direct labor 103,000 153,000 102,000 358,000

Applied overhead 51,500 76,500 51,000 179,000

Total cost $349,000 $507,000 $253,000 $1,109,000

7 0

3 years ago

A balance is _____.