Answer:
d.$18,900
Explanation:
Gross Profit is the net of Sales value and production cost in the period for the units sold. Under absorption costing all the direct and indirect costs incurred in the production of products are included in the total production cost. As the cost is available for 100 units produced we need to calculate the cost of 90 unit and deduct this cost from the sales value to determine the gross profit and then deduct the operating expenses to calculate the operating income.
Sales (90 units) $90,000
Less: Production costs:
Direct materials ( $40,000 x 90/100 ) $36,000
Direct labor ( 20,000 x 90/100 ) $18,000
Variable factory overhead ( 2,000 x 90/100 ) $1,800
Fixed factory overhead ( 7,000 x 90/100 ) <u>$6,300</u>
Total Production cost <u>($62,100)</u>
Gross Profit $27,900
Less Operating expenses:
Variable operating expenses $8,000
Fixed operating expenses $1,000
<u>($9,000)</u>
Operating Income <u>$18,900</u>
Answer:
Substitution
Explanation:
Principle of subsitution states that no consumer should buy a product for a high price of he can get an alternative (duplicate) that is of a cheaper price.
Substitutes are alternatives that provide similar satisfaction to the customer.
When the price of one product goes up the customer has a choice of going for an alternative.
For example honey and sugar are substitutes. When the price of one goes down people will go for the cheaper alternative. This acts as a price control mechanism.
Answer:
$87,200
Explanation:
The computation of the total amount of merchandise purchase is shown below:
As we know that
Cost of goods sold = Beginning merchandise inventory + purchase of merchandise - ending merchandise inventory
$69,400 = $11,600 + purchase of merchandise - $29,400
$69,400 = -$17,800 + purchase of merchandise
So, purchase value of merchandise is
= $69,400 + $17,800
= $87,200
Answer:
coupon rate= 13.5%
Explanation:
Giving the following information:
Number of periods= 5*2= 10 semesters
Par value= $1,000
YTM= 0.1/2 = 0.05
Price bond= $1,136
<u>To calculate the coupon rate, first, we need to determine the coupon per semester using the following formula:</u>
Bond Price= coupon*{[1 - (1+i)^-n] / i} + [face value/(1+i)^n]
1,136 = coupon*{[1 - (1.05^-10)] / 0.05} + [1,000/(1.05^10)]
1,136 = coupon*7.722 + 613.91
522.09 = coupon*7.722
$67.61=coupon
<u>Now, the coupon rate:</u>
Coupon= par value*(coupon rate/2)
67.61= 1,000*(coupon rate/2)
67.61= 500coupon rate
0.135=coupon rate
coupon rate= 13.5%
Answer:
d. marketable bank-issued time deposit that specifies the interest rate earned and a fixed maturity date.
Explanation:
A bank certificate of deposit (CD) can be defined as a secured form of time-bound deposit and a special low-risk savings account, wherein money (lump-sum) are left with the bank for a specific period of time in exchange for an interest rate premium.
Generally, a certificate of deposit pays a higher interest rate to its holder than the regular savings account because the banks invest the money in a business.
Additionally, the bank certificate of deposit is protected and insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000.
A negotiable certificate of deposit (NCD) can be defined as a type of certificate of deposit (CD) that has a minimum face (par) value of $100,000 and can't be redeemed before its maturity date i.e it doesn't allow the holder to withdraw money until the pre-determined date.
This ultimately implies that, a negotiable certificate of deposit (NCD) is a marketable bank-issued time deposit that specifies the interest rate earned (interest-bearing time deposits) and a fixed maturity date.
