Answer:
a. Shorten his portfolio duration
Explanation:
The best action to take in order to capitalize on expectations of increasing interest rates would be to shorten his portfolio duration. This is because an increase in the interest rate causes his portfolio value to decrease, yet if the duration of his portfolio is shortened then the change/decrease in value will be lesser than if done otherwise.
Answer:
Warranty Expense (Debit) $3,960
Warranty Liability (Credit) $3,960
Explanation:
The principle we apply while making entries for standard warranty is this:
The <u>estimated amount of warranty expense</u>, <em>which a company founds as a percentage of its sales from historical claims and data</em>, is taken as benchmark to accrue the warranty expense in the period when the sale is made <em>(matching principle) .</em>
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In our question, 4.5% is the estimated warranty expense.
The company then sets off the estimated warranty expense (Debit)
(<em>4.5% * $88,000 = $3,960</em>)
with the warranty liability (Credit) to entertain any claims in future.
Answer:
The optimal size of production run is 4656
Explanation:
Annual Demand (D) = 12,200
Daily demand (d) = Annual Demand / Number of days
Daily demand (d) = 12,200 / 300
Daily demand (d) = 40.67
Production rate per day (p) — 95
Setup cost (S) = 51
Annual holding cost (H) = 0.1
Part a)
Optimal Order Quantity (Q) = 3527.6 × 1.32
Optimal Order Quantity (Q)= 4,656.43
Optimal Order Quantity (Q)= 4,656
Therefore the optimal size of production run is 4656
Answer:
True
Explanation:
At the end of the manufacturing period the overhead cost applied to manufactured goods are compared to actual cost incurred.
If, Actual Overheads > Applied overheads, we say overheads are underapplied. this means the cost of goods sold has been charged too little and must be increased.
and
If, Applied Overheads > Actual overheads, we say overheads are overapplied. this means the cost of goods sold has been charged too much and must be lowered.
Answer:
Extended use of the asset.
Explanation:
The major advantages of leasing include operational, financial and tax incentives. When you lease an asset, the entire amount is taken as an expense, which might benefit a company if you compare it to the normal depreciation of a building (which lasts 39 years). Leasing also lowers the amount of foreign investment and it is easier to carry out than purchasing assets.
