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Karolina [17]
2 years ago
10

2. You are the human resources manager for a famous retailer and are trying to convince the president of the company to change t

he structure of employee compensation. Currently, the company’s retail sales staff is paid a flat hourly wage of $20 per hour for each eight-hour shift worked. You propose a new pay structure whereby each sales- person in a store would be compensated $10 per hour, plus 1 percent of that store’s daily profits. Assume that, when run efficiently, each store’s maximum daily profits are $25,000. Outline the arguments that support your proposed pla
Business
1 answer:
Colt1911 [192]2 years ago
4 0

The goal of any reasonable firm is to optimize its earnings. Providing incentives to the workers is one of the management methods to induce maximum effort from them in order to achieve the objective of the firm.In the present structure of employee settlement where the retail personnel is paid a fixed wage of $20 per hour, there's no reward for the retail sales staff to push more difficult for the sales and increase the profits. There is no penalty on them in case the sales go down and the profits are negatively affected.In the proposed worker compensation structure where each of the retail personnel is paid 1 percent of the shop's daily revenues over and above a fixed wage of $10 per hour, the staff is motivated to work harder to increase the sales and the profits of the firm. Each of the retail staff members then will be motivated by self-interest and devise methods to increase their productivity so that they can maximize their everyday compensation. Hence, by taking care of their self-interest, they will indirectly help in attaining the company's objective of maximizing its daily earnings to $25,000 per shop.

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Duerr Company makes a $69,000, 30-day, 10% cash loan to Ryan Company. The note and interest to be collected at maturity is: (Use
Dimas [21]

Answer:

the journal entry to record the loan:

E.g. January 1, 202x, loan made to Ryan Company

Dr Notes receivable 69,000

    Cr Cash 69,000

the journal entry to record the collection of the note:

E.g. January 31, 202x, note collected from Ryan Company

Dr Cash 69,575

    Cr Notes receivable 69,000

    Cr interest revenue 575

interest revenue = $69,000 x 10% x 30/360 = $575

4 0
3 years ago
Under a just-in-time inventory system, a company can reduce the amount of working capital it needs to finance inventory, freeing
Gennadij [26K]

Answer:

True.

Explanation:

Under a just-in-time inventory system, a company can reduce the amount of working capital it needs to finance inventory, freeing capital for other uses and/or lowering the total capital requirements of the enterprise.

In Business management, Just-in-time (JIT) is an inventory management method used by a company wherein goods, products, components, and labor are made available exactly when needed or just few hours before they are needed in the production process.

Basically, It is an inventory management system that companies use to reduce wastage to the barest minimum, thereby, freeing capital for other uses and/or lowering the total capital requirements of the enterprise.

<em>Hence, just-in-time when used judiciously can help a company reduce the amount of working capital it needs to finance inventory management. </em>

4 0
3 years ago
Waterway Corporation purchased a new machine for its assembly process on August 1, 2020. The cost of this machine was $162,900.
satela [25.4K]

Answer:

(a) Straight Line Depreciation for 2020 $  28,800

(b) Activity Method of Depreciation for 2020 $ 5,616

(c) Sum of the years Depreciation for 2021 $ 38,400

(d) Double declining balance depreciation for 2021 $ 39,096

Explanation:

Computation for requirement (a) - Straight Line Depreciation for 2020

Straight line method considers depreciation on adepreciable base after considering a salvage value and spreads it evenly over the life of the asset.

Cost of machine                                     $ 162,900

Estimated Salvage Value                       <u>$   18.900</u>

Depreciable Basis                                   $ 144,000

Estimated Life                                             5 years

Straight Line Depreciation for 2020 = $ 144,000/5 = $ 28,800      

Computation for requirement (b) - Activity Method  Depreciation for 2020

Activity method depreciation considers depreciation over the estimated usage of the asset and multiplies by the usage in a given period. The depreciable basis is after considering the salvage value.

Depreciable basis - same as SL depreciation                       $ 144,000

Usage Life of the machine                                                         20,000 hours

Machine usage for 2020                                                                  780 hours

Depreciation on a per hour basis      $ 144,000/ 20,000 = $ 7.2 per hour

Depreciation for 2020 on a usage of 780 hours = 780 * $7.20 = $ 5,616      

Computation for requirement (c) - Sum of the years digits for 2021    

In a sum of the years depreciation method, the sum of the life of the assets are added and considered as a depreciable life. The salvage value is considered in determining the depreciable basis.

Depreciable basis - same as SL depreciation                       $ 144,000            

Estimated life of the asset                                                      5 years

Sum of the years, (5+4+3+2+1)                                                  15

so the first year depreciation shall be 5/15, the next year 4/15 and so on,

We need to compute the depreciation for 2021 which is the second year, so the formula shall be:

4/15 (remaining useful life) * $ 144,000(depreciable basis) = $ 38,400

Computation for requirement (d) - Double declining balance  for 2021

In a double declining balance method the depreciation rate (%) is double that of a straight line method. The subsequent years depreciation is on a reduced balance. No salvage value is considered

The first year's depreciation is calculated

Cost of Machine* (2 * Straight Line depreciation %)

$ 162,900* (2 * 20 %) so the depreciation for 2020 would be

$ 162,900 * 40 % = $ 65,160.

For 2021, which is the requirement in our question, the cost would be the reduced value.

Original Cost of the machine                                    $ 162,900

Double Declining balance Depreciation  2020       <u>$  65,160</u>

Declining Cost basis for 2021 depreciation             <u>$   97,740</u>  

Depreciation @ 40 %                                                 $  39,096                                                    

6 0
3 years ago
You were asked to estimate the cost of capital for XYZ Inc. The firm is expected to have a target capital structure of 30% debt,
kap26 [50]

Answer:

8.30%

Explanation:

The weighted average cost of capital of the company is  computed using the WACC formula below:

WACC=(We*Ke)+(Wp*Kp)+(Wd*kd)

We=weight of common equity=50%

Ke=cost of retained earnings which is a proxy for the cost of equity=11.50%

Wp=weight of preferred stock=20%

Kp=cost of preferred stock=6.00%

Wd=weight of debt=30%

Kd=after-tax cost of debt=4.50%

WACC=(50%*11.50%)+(20%*6.00%)+(30%*4.50%)

WACC=8.30%

3 0
3 years ago
What limits specialization in the global economy?
abruzzese [7]
The answer is "trade barriers"
3 0
3 years ago
Read 2 more answers
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