Which two types of accounts offer tax benefits before saving?

A small market orders copies of a certain magazine for its magazine rack each week. Let X 5 demand for the magazine, with pmf Su

Oksanka [162]

Answer:

See explanation below.

Explanation:

Let X the random variable that represent the demand for the magazine, the pmf for X is given by:

X 1 2 3 4 5 6

P(X) 1/15 2/15 3/15 4/15 3/15 2/15

3 magazines

For this case the total spent is 2*3 = $ 6

And the net revenue for this case would be:

$4-$6 = -$2 , X=1 (demand 1)

$4*2-$6 = $2 , X=2 (demand 2)

$4*3-$6 = $6 , X=3 (demand 3)

For the values of X=4,5,6 the net revenue will be $6 since the number of magazines is 3

And the expected value for the net revenue would be:

$E(R) = \frac{1}{15} *(-2) +\frac{2}{15} *(2) +\frac{3}{15}*(6) + \frac{4}{15}*(6) +\frac{3}{15}*(6) +\frac{2}{15}*(6) = \frac{74}{15}=4.93$

4 magazines

For this case the total spent is 2*4 = $ 8

And the net revenue for this case would be:

$4-$8 = -$4 , X=1 (demand 1)

$4*2-$8 = $0 , X=2 (demand 2)

$4*3-$8 = $4 , X=3 (demand 3)

$4*4-$8 = $8 , X=4 (demand 4)

For the values of X=5,6 the net revenue will be $8 since the number of magazines is 4

And the expected value for the net revenue would be:

$E(R) = \frac{1}{15} *(-4) +\frac{2}{15} *(0) +\frac{3}{15}*(4) + \frac{4}{15}*(8) +\frac{3}{15}*(8) +\frac{2}{15}*(8) = \frac{80}{15}=5.33$

As as we can see we have a higher expected value for the case with 4 magazines.

5 0

3 years ago

According to the demand-pull theory, inflation is caused by:

Aliun [14]

Answer:

Understanding Demand-Pull Inflation

Demand-pull inflation is a tenet of Keynesian economics that describes the effects of an imbalance in aggregate supply and demand. When the aggregate demand in an economy strongly outweighs the aggregate supply, prices go up. This is the most common cause of inflation.

Explanation:

hope it helps you

6 0

2 years ago

Which of the following is a correct statement? Multiple Choice Writing off an uncollectible account under the allowance method d

jok3333 [9.3K]

Answer:

Estimating un-collectible accounts expense improves the matching of revenues and expenses.

Explanation:

When uncollectibles are recorded through allowance method then, bad debts expense is provided, which reduces net income. But at the time of writing off only the allowance and accounts receivables account is affected and not the net income.

When direct method is used then also the net income gets reduced, as bad debt expense and accounts receivables is affected.

And as provided in first para, when estimating and creating the allowance for bad debts, it affects net income, and it also represents the true and fair view of expenses and income.

Thus, statement c is correct.

4 0

3 years ago

Rainy days Company manufactures designer umbrellas. Each line of umbrellas is endorsed by a high-profile celebrity and designed

kykrilka [37]

Answer:

Rainy Days Company

a. Incremental Analysis of the Special Order:

Incremental Analysis Normal Increment

Sales revenue $960,000 $160,000

Cost of goods sold:

Variable costs (80%) 393,600 82,000

Fixed costs (20%) 98,400 0

Total cost of goods sold 492,000 82,000

Gross profit $468,000 78,000

Operating expenses 36,000 60,000

Net operating income $432,000 $18,000

b. Rainy days should accept the special order.

c. Rainy days should charge $17.43 per unit for the special order

Explanation:

a) Data and Calculations:

Operating capacity (80%) = 96,000 units

100% capacity = 120,000 units (96,000/0.8)

Sales revenue $960,000

Cost of goods sold 492,000

Gross profit $468,000

Operating expenses 36,000

Net operating income $432,000

At full capacity, price for the special order:

Cost of goods sold:

Variable costs (80%) $82,000

Fixed costs (20%) 98,400

Total cost of goods sold 180,400

Operating expenses 60,000

Total cost of special order $240,400

Units of the special order 20,000

Unit cost = $12.02

Net income margin (45%) 5.41

Total price to charge $17.43

b) The full fixed cost was charged for the special order if Rainy days Company operates at full capacity before receiving the special order. Fixed cost does not vary according to the level of activity. It has a step-cost feature, which means that to increase capacity by 20,000 units, the company will incur additional fixed cost $98,400.

8 0

3 years ago

The following lots of a particular commodity were available for sale during the year Beginning inventory 7 units at $52.00 First

ycow [4]

Answer:

$986.39

Explanation:

Given :

Value of items in inventory :

(7 * $52) + (19 * $53) + (25 * $28) + (18 * $65) = $3241

Number of items in inventory :

(7 + 19 + 25 + 18) = 69 units

Weighted average inventory cost :

$3241 / 69 = $46.971014

Number of commodity in hand at year end = 21 units

Amount of inventory at year end using average costing method :

Number of commodity * Average inventory cost

(21 * $46.971014) = $986.39

The amount of inventory at the end of the year according to the average costing method is $986.39

6 0

3 years ago