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3 years ago

A favorable materials price variance coupled with an unfavorable material usage variance would most likely result from:

1 answer:

3 0

The purchase of low-quality materials would most likely the result of a favorable materials price variance coupled with an unfavorable material usage variance. Material price variance is the difference between the cost and the budgeted and actual cost to obtain an object or materials, multiply to the total amount of the product purchased. They are what you called positive value of direct material price and negative value of direct material price. A positive value of direct material price variance is the one that is favorable and it means that the direct material was purchased for a lesser price than the standard price. A negative value of direct material price variance is the one that is unfavorable and it means that more than the expected price per unit is paid.

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AgCo sells corn in a perfectly competitive market. Say the current market price for a bushel of corn is $4.00. If AgCo prices at

nordsb [41]

Answer:

b. AgCo will sell no bushels of corn.

Explanation:

A perfectly competitive market refers to market has many buyers and sellers will all the market selling the undifferentiated product without any difference.

Some of the others attributes of a perfectly competitive market are that buyers and sellers have perfect information about the price of a good, no barriers to entry and exit, similar products are being sold, there are free entry and exit to the market, and all sellers are price takers.

All sellers are price takers implies that the price of good is determined or given by the market. Therefore, any attempt to increase the price beyond the price given by the market will result into a zero sale because the buyers will immediately switch to another seller selling at the market price which lower.

Based on the above explanation, AgCo will sell no bushels of corn because its prices at $4.10 per bushel for its corn is higher than the current market price for a bushel of corn of $4.00.

6 0

3 years ago

Dan plans to fund his individual retirement account (IRA) with the maximum contribution of $2,000 at the end of each year for th

slamgirl [31]

Answer:

$31,874

Explanation:

In this question, we are asked to calculate how much Dan would have at the end of the 10th year if he contributes a maximum of $2000 at the end of each year for the next 10 years and earns 10% on his contribution.

This kind of problem can be solved using the annuity formula I.e the annuity formula can be used to calculate the accumulated value at the end of the 10th year.

Annuity refers to a series of payment that is made at equal time intervals

Mathematically, the future value of an annuity =

Annuity payment * [(1 + r)^n - 1]/r

Where r is the discount rate and n is the number of years.

In this question, we have identified the following to be used in the formula.

Annuity payment = the maximum payable contribution per year = $2000

Number of years = 10 years

The discount rate = 10% = 10/100 = 0.1

We plug these values in the formula:

Future accumulated value = 2,000 * [(1+0.1)^10 - 1]/0.1 = 2,000 * [(1+0.1)^10 - 1)]/0.1

= 2,000 * (2.5937-1)/0.1 = 2,000 * (1.5937)/0.1 = 2,000 * 15.937 = $31,874

The accumulated value of the annuity payment is $31,874

8 0

3 years ago

n 2007, an unseasonably dry spring led to a sharp decline in the quantity harvested of black morels, a wild mushroom found thr

Alexeev081 [22]

Answer:

Increase; fall

Explanation:

Due to the slightly above normal rainfall levels which led to a large black morel harvest, <em>the supply of the commodity will increase</em>.

However, since demand for the commodity is expected to remain the same as it was in 2007 despite the increase in supply, <em>the equilibrium price is expected to fall</em> as supply exceeds demand.

4 0

3 years ago

Because your mother is about to retire, she wants to buy an annuity that will provide her with $75,000 of income a year for 20 y

siniylev [52]

The calculated present value of the annuity is $915,166.70.

Explanation and Solution:

Annuity is a collection of fixed payments made or earned either at the close or at the beginning of any term such that a significant initial payment or receipt may be turned into a set of comparatively minor payments or receipts. An annuity that lasts indefinitely is called perpetuity.

The formula for the present value of the annuity is given by:

$P = \frac{1- (1+i)^{-n} }{i} * R$

Where;

R = annual payment = $75,000

i = interest rate = 5.25%

P = Present value of annuity

n = number of years = 20 years

P = $\frac{1- (1+5.25)^{-20} }{5.25} * 75,000$

P = $915,166.70

5 0

3 years ago

Match each of the following terms with their definition - Before-tax cost of debt - Cost of preferred stock - Cost of Common Sto

fomenos

Answer:

Before-tax cost of debt ⇒ A. The interest rate the firm must pay on new long-term borrowing.

This refers to the interest rate that a firm will pay on long term borrowing as compensation to the lenders for lending the company some funds.

Cost of preferred stock ⇒ C. rate of return investors require based on the preferred stock dividend.

The cost of the preferred stock is the rate of the preferred dividend that investors require they are paid every year if dividends can be paid and sometimes even when it cannot.

Cost of Common Stock ⇒ B. the rate of return on retained earnings, and adjusted for flotation costs .

Commons stock costs is the required return on the retained earnings of a company.

WACC ⇒ D. the average cost of raising new financing.

Weighted Average Cost of Capital (WACC) represents the total cost of raising capital for the company as it incorporates the costs of debt, preferred stock and common stock.

3 0

3 years ago