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kolezko [41]
2 years ago
11

Pepsico's CFO uses this equation, which was developed by regressing inventories on sales over the past 5 years, to forecast inve

ntory requirements: Inventories = $26.8 + 0.234 x (Sales). The company expects sales of $400 during the current year, and it expect sales to grow by 19% next year. What is the inventory forecast for next year? All dollar amounts are in millions.
Business
1 answer:
Mandarinka [93]2 years ago
5 0

Answer:

The inventory forecast for next year is $ 120.4.

Explanation:

In this question relationship between sales and inventory is expressed in the form of an equation. This problem requires us to tell the value of inventory if sales is $ 400. So we can simply calculate the inventory value by putting value of x= 400 in the equaltion given in the question.

Inventories = $26.8 + 0.234 x

Inventories = $26.8 + 0.234 ($400)

Inventories = $ 120.4

(<em>Assume sales increase is due to increase in quantity sold not price</em>)

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Additional information about the company follows: Hubs require $24 in direct materials per unit, and Sprockets require $17. The
Katen [24]

Question Completion:

Fogerty Company makes two products, titanium Hubs and Sprockets. Data regarding the two products follow:

                                    Direct Labor     Production

                                 hours per unit          Units

Hubs                                  0.7                 27,000

Sprockets                          0.3                59,000

 Answer:

Fogerty Company

The unit product cost of each product according to the ABC system:

                                           Hubs      Sprockets

Unit production cost       $46.22         $22.46

Explanation:

a) Data and Calculations:

                                          Hubs  Sprockets

Direct materials per unit    $24      $17

Direct labor rate per hour  $14       $14

Direct labor per unit           $9.80   $4.20 ($14 *0.3)

Estimated Activity  Activity Cost Pool Overhead     Hubs  Sprockets  Total

                              (Activity Measure)      Cost

Machine setups (number of setups)    $ 27,000       125         100       225

Special processing (machine-hours) $ 258,000   4,300             0    4,300

General factory (organization-sustaining) $ 124,800 NA          NA        NA

Total overhead expenses                   $409,800

Activity rate:

Machine setups = $120 ($27,000/225)

Special processing = $60 ($258,000/4,300)

General factory = $62,400 ($124,800/2)

2. The unit product cost of each product according to the ABC:

Overhead costs:

                                    Hubs      Sprockets    Total

Machine setups       $15,000      $12,000       $27,000

Special processing 258,000                  0      258,000

General factory         62,400        62,400       124,800

Total overhead     $335,400      $74,400    $409,800

Units produced         27,000        59,000        86,000

Overhead per unit    $12.42            $1.26

                                            Hubs      Sprockets

Direct materials per unit  $24.00          $17.00

Direct labor per unit           $9.80           $4.20

Overhead cost per unit    $12.42            $1.26

Unit production cost       $46.22         $22.46

3 0
2 years ago
While Jon is walking to school one morning, a helicopter flying overhead drops a $20 bill. Not knowing how to return it, Jon kee
enyata [817]

Answer:

(a) $15

(b) $35

(c) 4

(d) $80

Explanation:

Given that,

Initial deposit = $20 bill

Required reserve ratio = 25%

(a) Money lend out by bank is as follows:

= Amount of deposit - Reserve requirement

= $20 - ($20 × 0.25)

= $20 - $5

= $15

(b) Money in the economy changed:

= Initial deposit + Amount of money lend out by bank

= $20 + $15

= $35

(c) Money multiplier:

= 1/ Required reserve ratio

= 1/ 0.25

= 4

(d) Money will eventually be created by the banking system:

= Change in deposits × Money multiplier

= $20 × 4

= $80

7 0
3 years ago
Trini Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 8,100
Ilya [14]

Answer:

$102,870

Explanation:

The computation of Total cash disbursements is shown below:-

Variable overhead = Direct labor budget × Variable overhead rate

= 8,100 × $1.40

= $11,340

Fixed expenses incurred in cash = Total fixed expenses - Depreciation

= $100,440 - $8,910

= $91,530

Total cash disbursements = Total variable manufacturing overhead + Fixed cash overhead

= $91,530 + $11,340

= $102,870

Therefore for computing the Total cash disbursements we simply applied the above formula.

6 0
2 years ago
It becomes particularly urgent for a company to consider diversification when there are
elena-s [515]
<span>The company could consider diversifying when sales are beginning to slow and there is a way to leverage some of the business's core competencies in other areas that would be more competitive. In addition, this could allow the business to not worry about being "all-in" in a certain area, where that area's success or failure could lead to the entire business thriving or failing. By diversifying itself, the business can also lower production and sales costs or increase overall sales.</span>
6 0
3 years ago
In​ Keynes's analysis of the speculative demand for​ money, what will happen to money demand if people suddenly decide that the
Serggg [28]

Answer:

The correct answer is option C.

Explanation:

When the interest rate falls below the normal level, people expect the interest rates to rise in future and bond prices to fall. This causes investors to sell the bonds at present so that they can buy bonds when they are selling at lower prices in future as of result of an increase in interest rates. Money demand will, as a result, will decrease.

4 0
3 years ago
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