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DochEvi [55]
3 years ago
7

"The money multiplier is equal to the _______________ in the economy divided by the original _________________. a. total money;

quantity of money b. original quantity of reserves; reserve ratio c. quantity of money; total money d. reserve ratio; original quantity of reserves"
Business
1 answer:
weqwewe [10]3 years ago
6 0

Answer:

a. total money  ;  quantity of money

Explanation:

Money multiplier

Under the fractional - reserve banking system , the closely related ratios of the commercial bank money to the central bank money or the monetary base , is called the money multiplier .

It measures the maximum amount of money , that a commercial bank can make , on ignoring leakage in the currency by the non - bank public .

The value of money multiplier can be calculated as the total money in present in the economy , divided by the original quantity of money .

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Razor Inc. manufactures industrial components. One of its products used as a subcomponent in auto manufacturing is Fluoro2211. T
Neko [114]

Answer:

Total contribution margin= $1,884,180

Explanation:

Giving the following information:

Direct Materials 150

Direct Labor 28

Variable Manufacturing Overhead 25

Variable Selling 16

Sales in units= 10,130

Selling price= $420

Direct material cost= 150*1.1= $165

<u>First, we need to calculate the unitary contribution margin:</u>

Unitary contribution margin= selling price - total unitary variable cost

Unitary contribution margin= 420 - (28 + 25 + 16 + 165)

Unitary contribution margin= $186

<u>Now, the total contribution margin:</u>

Total contribution margin= 10,130*186

Total contribution margin= $1,884,180

3 0
3 years ago
. Seven cards each have a positive integer printed
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A favorable direct materials price variance might lead to an unfavorable direct materials quantity variance because the company
Lemur [1.5K]
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Organizations with __________ possess a broadly and deeply shared value system that can provide a strong corporate identity
DochEvi [55]

Answer:

strong cultures

Explanation:

6 0
3 years ago
Erin Shelton, Inc., wants to earn a target profit of $960,000 this year. The company’s fixed costs are expected to be $1,320,000
kipiarov [429]

Answer:

1. Break-even sales = $2,200,000

2. Net Income = $0

3. Sales = $3,800,000

4. See explanation section

5. Margin of safety = $1,600,000

Margin of safety (%) = 42.11%

Explanation:

Requirement 1.

We know,

Break-even sales = Fixed expense ÷ Contribution Margin Ratio

Given,

Expected Fixed expense = $1,320,000

Contribution Margin Ratio = Contribution Margin ÷ Sales Revenue

As we do not have contribution margin and Sales Revenue, we have to use variable costs that is expected to be 40% of sales. Therefore,

Contribution Margin Ratio = Sales (%) - variable costs (%) = 100% - 40% = 60%

Therefore, Break-even sales = $1,320,000 ÷ 60%

Break-even sales = $1,320,000 ÷ 60%

Therefore, Break-even sales = $2,200,000

Requirement 2.

                         Erin Shelton, Inc.

Contribution Margin Income Statement format

For the year ended, December 31, Current year

Sales Revenue                                          $2,200,000 (<em>Requirement 1</em>)

<u>Less: Variable expense (40% of sales)         880,000</u>

Contribution Margin                                  $1,320,000

<u>Less: Fixed Expense                                   1,320,000</u>

Net operating Income                                        0

In break-even sales, total fixed expense = total contribution margin, therefore, no income or loss.

Requirement 3.

We know,

This year, To attain profit, sales = (Fixed expense + Target Profit) ÷ Contribution Margin Ratio

Given,

Expected Fixed expense = $1,320,000

Target Profit = $960,000

Contribution Margin Ratio = Contribution Margin ÷ Sales Revenue

As we do not have contribution margin and Sales Revenue, we have to use variable costs that is expected to be 40% of sales. Therefore,

Contribution Margin Ratio = Sales (%) - variable costs (%) = 100% - 40% = 60%

Therefore, To attain profit, sales = ($1,320,000 + $960,000) ÷ 60%

To attain profit, sales = $2,280,000 ÷ 60%

Therefore, To attain profit, sales = $3,800,000

Requirement 4.

Using To attain profit, sales = $3,800,000 (From Requirement 3) to find the net operating income

                          Erin Shelton, Inc.

Contribution Margin Income Statement format

For the year ended, December 31, Current year

Sales Revenue                                          $3,800,000 (<em>Requirement 3</em>)

<u>Less: Variable expense (40% of sales)        1520,000</u>

Contribution Margin                                  $2,280,000

<u>Less: Fixed Expense                                   1,320,000</u>

Net operating Income                                $960,000

Requirement 5.

We know,

Margin of safety = (Current sales - Break-even sales)

<em>From Requirement 1, we get, Break-even sales = $2,200,000</em>

<em>From Requirement 3, we get, Current sales = $3,800,000</em>

Margin of safety = $3,800,000 - $2,200,000

Therefore, Margin of safety = $1,600,000

Margin of safety as percentage = [(Current sales - Break-even sales) ÷ Current sales] × 100

Margin of safety = ($1,600,000 ÷ $3,800,000) × 100

or, Margin of safety = 0.42105 × 100

Margin of safety = 42.11%

8 0
3 years ago
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