Answer:
d.For each $2,500 payment received in the first year, Todd must include $1,000 in gross income
Explanation:
The computation is shown below:
As we know that
Exclusion Ratio is
= Cost ÷ Benefit
= $150,000 ÷ ($2,500 × 100)
= 0.6
Now
= 0.6 × $2,500
= $1,500 Excludible
So, the involved amount is
= $2,500 - $1,500
= $1,000 Includible
Hence, the correct option is d. and the same is to be considered
The other options are wrong
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Answer:
a) EOQ = √[(2 x S x D) / H]
- S = order cost = $21
- D = annual demand = 930 x 12 = 11,160
- H = annual holding cost = $35 x 28% = $9.80
EOQ = √[(2 x $21 x 11,160) / $9.80] = 218.7 ≈ 219 shoes
b) total ordering costs = (11,160 / 219) x $21 = $1,070.14
total holding costs = $9.80 x (219 / 2) = $1,073.10
total purchases = $35 x 11,160 = $390,600
total inventory costs = $392,743.24
c) The EOQ model faces two main problems:
- first, it assumes that the demand is constant and can be predicted with 100% accuracy and that is not usually the case. Also, demand might be seasonal which makes the EOQ model useless.
- second, it assumes costs are constant and they are generally not, e.g. the price of shoes might change
Answer:
Ownership utility
Explanation:
Based on the information provided within the question it can be said that in this scenario Spalkyn most likely provides Ownership utility. This term refers to when a company allows for the orderly transfer of their goods or services to the buyer. Which is what Spalkyn does by giving their customers various different options when purchasing their goods, so that they can choose whichever option is easiest for them.