Costs that are shared by multiple cost objects in a company are known as common costs.
<h3>What is cost?</h3>
Cost involves expenses that are incurred either in production or purchase of goods and services. Common cost consist of all cots incurred, it is not attached to any specific cost object, such as a product or process.
When cost is attached to particular cost it can be given a name.
Example is overhead cost of production, direct cost and indirect costs.
Therefore, Costs that are shared by multiple cost objects in a company are known as common costs.
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Answer: The Fed wanted to encourage banks to raise their prime interest rates, slowinggrowth in investment, consumption, and aggregate demand to a noninflationary pace.
Explanation:
Federal funds interest rate could be as interest rate banks charge themselves on overnight loans in order to meet reserve requirement. While prime interest are interest rates banks charge on loans to their most credit worthy customer. The Fed wanted to encourage banks to raise their prime interest rates, slowinggrowth in investment, consumption, and aggregate demand to a noninflationary pace.The tight money policy successfully raised the prime interest rate.
Answer:
the production level next year is 712,750
Explanation:
The computation of the production level next year will be needed to meet the targets is shown below:
Ending Inventory (662,000 ÷ 12 × 1.5) 82,750
Sales Budget 662,000
Total inventory required 744,750
Less Beginning Inventory -32,000
Production 712,750
Hence, the production level next year is 712,750
Answer:
Calculate the true APR:
It is given that the compounding period is 12 as the payment is done monthly. The total loan amount is $1,000 with $100 monthly installments at an interest rate of 20%. Annuity is a stream of cash flows that continues for a given number of years. The interest rate is calculated by following method. Use the following formula to calculate the present value:
![Present value of annuity = c[\frac{1}{r}-\frac{1}{r(1+r)^{t} }]](https://tex.z-dn.net/?f=Present%20value%20of%20annuity%20%3D%20c%5B%5Cfrac%7B1%7D%7Br%7D-%5Cfrac%7B1%7D%7Br%281%2Br%29%5E%7Bt%7D%20%7D%5D)
Where,
c —) Monthly payment
r —> Interest rate
t —> Compounding period
Now,
![1000 = 100[\frac{1}{r}-\frac{1}{r(1+r)^{12} }]](https://tex.z-dn.net/?f=1000%20%3D%20100%5B%5Cfrac%7B1%7D%7Br%7D-%5Cfrac%7B1%7D%7Br%281%2Br%29%5E%7B12%7D%20%7D%5D)
We cannot determine the exact value of interest of annuity. Using the trial and error method we can determine the interest rate. We can use the TVM (time value of money) keys in the financial calculator to calculate the value of 'r' as below:
Enter
N = 12
PV = -1000
PMT =100
FV = 0
Now press i and we should find that the monthly rate for this annuity(r) is 2.923% per month.
Effective interest rate is the annualized interest rate using compound interest. Multiply the monthly rate by 12 to obtain APR as below:
APR = Monthly rate x 12
Substitute the values in the formula:
APR = 2.923% x 12
APR = 35.076%
Hence, the APR is 35.076%.
Determine the effective annual rate (EAR):
It is the net annual return received. The monthly rate should be used to calculate the effective annual rate with the help of the formula below:
Effective annual rate = 0.41302 or 41.302 %
Hence, the effective annual rate is 41.302%.
Finally we may conclude that the true rate would be 20%, if $1,000 was borrowed today and $1,200 was paid back one year from today. It should be noted that the true rate must be greater than 20% because the twelve annual payment of $100 should be made before the end of the year.
Answer:
B. Cost-plus pricing.
Explanation:
This is explained to be a cost based pattern or unique strategy which is seen to ensure that costs are been covered in the sense that all pricing variables are seen to add some particular percentage to mark its price. It is seen in most cases is obviously seen to cover all cost of what exactly it is a customer is seen to have loved or valued in the said product.
Certain scenarios has shown that optimization is rare in the discussed topic' way to calculate a price, it shouldn't be your only way of finding price.
