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3 years ago

Match the terms relating to the basic terminology and concepts of the time value of money.

Business

1 answer:

Mashcka [7]3 years ago

3 0

Answer:

a. Amortization schedule.

b. Amortized loan.

c. Annual percentage rate.

d. Discounting.

e. Future value.

f. Opportunity Cost of Funds.

g. Time value of money.

Explanation:

In economics or financial accounting, money can be defined as any asset used by an individual or business entity to make purchases of goods and services at a specific period of time.

Simply stated, money refers to any asset which can be used to purchase goods and services by customers.

This ultimately implies that, money is any recognized economic unit that is generally accepted as a medium of exchange for goods and services, as well as repayment of debts such as loans, taxes across the world.

Some of the terms relating to the basic terminology and concepts of the time value of money includes;

a. Amortization schedule: A schedule or table that reports the amount of principal and the amount of interest that make up each payment made to repay a loan by the end of its regular term.

b. Amortized loan: A loan in which the payments include interest as well as loan principal.

c. Annual percentage rate: A value that represents the interest paid by borrowers or earned by lenders, expressed as a percentage of the amount borrowed or invested over a 12-month period.

d. Discounting: A process that involves calculating the current value of a future cash flow or series of cash flows based on a certain interest rate.

e. Future value: The name given to the amount to which a cash flow, or a series of cash flows, will grow over a given period of time when compounded at a given rate of interest.

f. Opportunity Cost of Funds: A 6% return that you could have earned if you had made a particular investment.

g. Time value of money: A concept that maintains that the owner of a cash flow will value it differently, depending on when it occurs.

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Answer:

Absorption Costing Net Income 1008,000

Variable Costing Net Income 976,000

Explanation:

Kodiak Fridgeration Company

Units Produced = 80,000

Units Sold = 72,000

Ending Inventory = 8000

Per Units Cost

Direct materials $6,400,000/80,000 = $ 80

Direct labor 1,600,000 /80,000= $ 20

Variable manufacturing cost 1,280,000/80,000= $ 16

Fixed manufacturing cost 320,000 /80,000 = $ 4

Absorption Manufacturing Cost per unit= 9,600,000/80,000= $ 120

Variable Manufacturing Costs per unit = $ 116

Kodiak Fridgeration Company

Income Statement

Absorption Costing

Sales $10,800,000

Manufacturing costs:

Direct materials $6,400,000

Direct labor 1,600,000

Variable manufacturing cost 1,280,000

Fixed manufacturing cost 320,000 9,600,000

Less Ending Inventory (8000*120) (960,000)

Cost of Goods Sold 86,40,000

Gross Profit 2160,000

Selling and administrative expenses:

Variable $ 72,000* 13.5= 972,000

Fixed 180,000

Net Income 1008,000

Kodiak Fridgeration Company

Income Statement

Variable Costing

Sales $10,800,000

Variable manufacturing cost

(80,000*116) 9280,000

Less Ending Inventory ( 8000*116) 928,000

Cost of Goods Sold 83,52,000

Gross Contribution Margin 2448,000

Variable Selling and administrative expenses

(72000 * $1,080,000/80,000) 972,000

Contribution Margin 1476,000

Less Fixed Expenses

Fixed manufacturing cost 320,000

Fixed 180,000 500,000

Net Income 976,000

3. The difference in absorption and variable costing income is because in absorption costing the fixed costs are treated as unit cost and in variable costs the fixed costs are treated as period costs. Also the fixed costs of the ending units is deducted in absorption costing where it is not deducted in variable costing.

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Answer:

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c. Hold a series of town hall meetings to discuss the policy change and listen to employee concerns

d. Hold informal meetings with key managers, department heads, and staff employees to discuss the policy change to develop best practices for communicating the change to other employees

Explanation:

An Interactive leader is a leader who seeks the opinion of his or her followers regarding issues in order to achieve a desired goal.

Mary Barra can communicate a policy change that impacts all GM employees from executive-level managers to assembly line workers by creating task forces at different levels of the organization that communicate the benefits of the policy change. This will help in passing the message across to the workers effectively and quicker.

Holding a series of town hall meetings to discuss the policy change and listen to employee concerns is also vital as the purpose of the policy change can be discussed and the opinions of other with regards to the change can be known.

Lastly, holding of informal meetings with managers, department heads, and staff employees is also essential so that the information can be passed across to the employees in each department and the workers all work towards achieving a common goal.

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Answer:

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