What are cost drivers? How do cost drivers relate to cost pools? What are some cost pools? Name two or three different cost drivers for each of these cost pools.
What are value-added processes? How do you determine if a process adds value? How does identifying value-added processes help a company run more efficiently and effectively?
In: Accounting
1. On January 1, 2016, TXU Europe Corporation purchased 40% of the outstanding stock of Alberta Power Pool Corporation for $800,000. Net income reported by Alberta Power Pool Corporation for 2016 and 2017 was, respectively, $100,000 and $125,000. Dividends paid by Alberta Power Pool Corporation during 2016 and 2017 were, respectively, $60,000 and $75,000. The long−term investment will appear on TXU Europe Corporation's December 31, 2017, balance sheet at:
A.$864,000
B.$836,000
C.$746,000
D.$890,000
2.Retail Energy Corporation paid $1,300,000 on January 1, 2017, to purchase 32% of the outstanding shares of Natural Gas Limited. In 2017 Natural Gas Limited reported $450,000 of net income and paid $100,000 in dividends. If this investment is accounted for using the equity method of accounting, what will be the impact on the books of Retail Energy Corporation?
A.the Investment account will be increased by $144,000
B.income of $144,000 will be recorded
C.the Investment account will be decreased by $144,000
D.income of $32,000 will be recorded
3.Under the equity method of accounting for investments, dividends paid by the investee are recorded by the investor as:
A.a credit to the Investment account of the investor company
B.no entry is made to record dividends in this accounting situation
C.a debit to the Investment account of the investor company
D.a credit to Dividend Revenue of the investor company
4.Corporations invest in ashort−term investment:
A.to sell it for more than its cost
B.to generate a higher profile
C.to invest excess cash temporarily and to increase income
D.to park cash temporarily
In: Accounting
86
High-end stores like Nordstrom’s and Dillard’s charge higher prices versus stores like J.C. Penny, Sears and Macy’s. The more expensive stores often try to offer better customer service and they encourage their sales people to start conversations with customers to find out what they would like.
What kind of microeconomic strategy is this?
Multiple Choice
An elastic demand curve counter-strategy
. None of the above
A non-price strategy
A cost reduction strategy
87
At the equilibrium point of the demand and supply curves, most buyers and sellers will be satisfied with the prices and quantities being offered.
True or False
88
A monopoly creates a situation whereby society must suffer and pay higher prices for less output versus the lower prices and higher output we would have if we had a free market. This situation of loss is known as what?
Multiple Choice
Inefficiency Loss
All of the statements are false
Welfare Loss to Society
Total Product Loss
89
Net Profit means the exact same thing as Economic Profit.
True or False
90
A negative externality is something outside the free market system. Which item or items below represent a negative externality?
Multiple Choice
When the state government gives grant money to a city to build a new bridge
A 9.8 earthquake that destroys a city
The K-12 school system inside a city
When the government opens up a new and beautiful city park
In: Economics
2. Airbiz Food Products produces a wide variety of food and related products. The? company's tomato-canning operation relies partly on tomatoes grown on Airbiz?'s own farms and partly on tomatoes bought from other growers. Airbiz?'s tomato farm is on the edge of? Sharpestown, a? fast-growing, medium-sized city. It produces 14 million pounds of tomatoes a year and employs 58 persons. The annual costs of tomatoes grown on this farm are as? follows:
Variable production costs $605,000
Fixed production costs 1,250,000
Shipping costs (all variable) 230,000
Total costs $2,085,000
Fixed production costs include depreciation on machinery and? equipment, but not on land because land should not be depreciated. Airbiz owns the? land, which was purchased for $600,000 many years ago. A recent appraisal placed the value of the land at $30 million because it is a prime site for an industrial park and shopping center. Airbiz could purchase all the tomatoes it needs on the market for $0.30 per pound delivered to its factory. If it did? this, it would sell the farmland and shut down the operations in Sharpestown. If the farm were? sold, $325,000 of the annual fixed costs would be saved. Airbiz can invest excess cash and earn an annual rate of 12%.
1. How much does it cost Airbiz annually for the land used by the tomato? farm?
2. How much would Airbiz save annually if it closed the tomato? farm? Is this more or less than would be paid to purchase the tomatoes on the? market?
3. What ethical issues are involved with the decision to shut down the tomato? farm?
In: Finance
| Dorothy Goldman's Star Inn has ahcieved moderate success for the past 5 yeatd, as it | ||||||
| had an ADR in five of $60 ADR and paid occupancy of 75%. Yet she wonders if her rooms- | ||||||
| only lodging facility with 100 rooms might do even better if it was part of a franchised | ||||||
| system. Willie Hernandez from the Quintinilla Loding Chain (QLC) suggests that her hotel | ||||||
| would benefit from a francisee with QLC. | ||||||
| Through careful study, Dorothy has gathered the following informatiom: | ||||||
| 1. The initial fee with QLC of $50,000 will be paid at the signing of the franchise agreement. | ||||||
| For tax purposes, the intial fee would be amoritized over a 5-year period at $10,000 a year. | ||||||
| 2. The paid occupancy percentage is expected to increase by 2 percentage points, and ADR | ||||||
| is expected to increase $2 per room due to this association. | ||||||
| 3. Advertising fees to be paid to QLC would be 2% of total gross room sales, while the | ||||||
| royalty fee would be 3% of total gross room sales. | ||||||
| 4. The reservation fee is $5 per room per month for all 100 rooms. | ||||||
| 5. Assume the variable costs other than those mentioned above are 50% of gross room | ||||||
| sales, and that fixed costs would be unchanged. | ||||||
| 6. Assume and average tax rate of 30% for the Star Inn. | ||||||
| 7. Assume the Star's Inn cost of capital is 12% | ||||||
| REQUIRED: | ||||||
| Based on the above information, should Dorothy Goldman sign on with QLC? | ||||||
In: Finance
TEXplor has purchased a 2-year lease on land adjacent
to the land leased by
Clampett. The land leased by TEXplor lies above the same crude oil
deposit. Assume
Management of AG Travel and Tour has identified two groups of
individuals that
would be interested in the vacation package consisting of room and
board and/or
entertainment. The maximum amount that group 1 is willing to pay
for room and
board is GHC 2500 and for entertainment is GHC 500. For group 2,
the maximum
amount they are willing to pay for room and board is GHC 1800 and
for
entertainment is GHC 750. Although AG Travel and Tour is not able
to identify
members of either group, it does know that each group values the
components of
the package differently. Assuming there are an equal number of
members in each
group and that the total membership in each group is a single
individual. If the
marginal cost of providing the service (room and board and/or
entertainment) to
each group is GHC 1000.
i. How much will the hotel charge members of each group for the
vacation
package if it could identify the members in each group?
ii. How much will the profit for AG Travel and Tour be?
iii. Since AG Travel and Tour is not able to identify members of
each group,
what price should it charge for each product?
iv. What will be the profit for AG Travel and Tour in the case of
(iii) above?
v. If AG Travel and Tour wants to charge a package price, what is
the highest
price it can charge?
vi. What profit will AG Travel and Tour make if it charges the
package price
found in (v) above? (3 mark
In: Economics
In: Economics
When customers have an unpleasant customer experience, the company no longer has to worry about them telling a few friends and family; the company now has to worry about them telling everyone. Internet service providers are giving frustrated consumers another means of fighting back. Free or low-cost computer space for Internet websites is empowering consumers to tell not only their friends but also the world about the way they have been treated. A few examples of disgruntled customer stories from the Internet include:
■ A bike-riding tourist requires stitches after being bitten on the leg by a dog. The tourism company is banned from renting bikes and in turn bars the tourist from taking any future tours.
■ A customer leaving Best Buy refuses to show the receipt voluntarily to the guard at the door. The Best Buy employees try to seize the customer’s cart and then decide to park a car behind the customer’s vehicle.
■ Enterprise Rent-A-Car operates a high-stress business, and frequently its customers find that the company did not honor reservations, did not have cars ready for reservations, rented cars with empty tanks of gas, and charged higher rates to corporate account holders.
The pervasive nature of the Internet is increasing customer power and changing business from product-focused to customer-focused. Explain the difference between product-focused business and customer-focused business and why CRM is more important than ever before.
In: Operations Management
20.An examination of the capital cost allowance schedule for 2020 provided the following opening balances for the undepreciated capital cost for each class of EASI's assets:
|
Class 1 |
Bbuilding........................................................... |
$188,383 |
|
Class 8 |
Office furniture and equipment..................... |
60,000 |
|
Class 10 |
Trucks for transportation of goods |
80,000 |
|
Class 12 |
Ssmall tools....................................................... |
5,000 |
|
Class 13 |
Lleasehold improvements............................... |
187,500 |
|
Class 44 |
Patent and rights limited life.......................... |
90,000 |
The following additional information was found in the 2020 fixed asset schedules working paper files.
A. The building which cost $997,426 in 1992 was sold for $150,000. It was the only building in Class 1 at the time of its sale. A new building was purchased (non used) in April 2020 for $750,000. Also, in February 2020 a lot adjacent to the new building, was purchased for $100,000 for use as a parking lot by employees and visitors. This lot was paved at a cost of $25,000. A fence was erected around an outside storage area near the new building at a cost of $40,000.
B New office furniture was purchased for $20,000. This purchase replaced old assets which were sold for $5,000. None of the old assets was sold for more than capital cost.
C Three small trucks purchased in 2015 for $12,000 each were traded in for three new trucks. Each new truck was priced at $15,000, but this was reduced by a trade-in credit of $2,500 for each old truck.
D. Some small tools were sold for a total of $7,000. All of these tools were sold at a price less than their capital cost.
E. Leasehold improvements had been made to a leased warehouse at a cost of $225,000 in October 2018. The remaining length of the lease in that year was six years with two successive renewal options of three years each. Further leasehold improvements were made to this warehouse in 2020 at a cost of $21,000.
F.During 2020, an unlimited life franchise was purchased for $48,000.
G.Accounting gains and losses on the above asset sales netted to nil.
Required:
Based on the foregoing information, Compute the income from business for tax purposes for Eldridge Asset Sales Inc. for its 2020 fiscal year.
|
Item # |
Description |
Amount |
Action(Add back/Deduct/No adjustment |
Amount for adjustment |
Reason for Adjustment |
ITA Reference |
State your assumptions if any information is not adequate for your calculation
In: Accounting
Total Product Offer
One of the American Marketing Association's definitions of marketing says it's "a set of processes for creating, communicating, and delivering value to customers." When consumers calculate the value of a product, they look at the benefits and then subtract the price to see whether the benefits exceed the costs, including the cost of driving to the store or shipping fees if they buy the product online. Whether consumers perceive a product as the best value depends on many factors, including the benefits they seek and the service they receive. To satisfy consumers, marketers must learn to listen better and constantly adapt to changing market demands. From a strategic marketing viewpoint, a product is more than just the physical good or service. A total product offer consists of everything consumers evaluate when deciding whether to buy something. The basic product or service may be a cell phone or a hotel room, but the total product offer includes other aspects of the good or service.
Read the case below and answer the questions that follow.
At the time the new iPhone 3GS was introduced, it was described on Apple's website in the following way:
Priced from $199 to $299, Apple promises that its new iPhone 3GS is the fastest, most powerful iPhone yet. The new version features video recording, Voice Control, and up to 32GB of storage. iPhone is more than just a phone. It combines three devices in one:
a revolutionary mobile phone, a widescreen iPod, and a breakthrough Internet device. All that and more makes it the best phone you'll ever use. The Apple iPhone is a revolutionary phone. With the Multi-Touch interface on iPhone, you can make a call simply by tapping a name or number in your contacts or favorites list, your call log, or just about anywhere. Visual Voicemail lets you select and listen to messages in whatever order you want—just like email. The Apple iPhone shows off your content—music, movies, TV shows, and more—on a beautiful 3.5-inch display. Add to your collection by downloading music and video wirelessly from the iTunes Store. Scroll through songs and playlists with the touch of a finger. Even browse your album artwork using Cover Flow. The Apple iPhone uses fast 3G and Wi-Fi wireless connections to deliver rich HTML email, Maps with GPS, and Safari—the most advanced web browser on a mobile device. It has Google and Yahoo! search built in. And since iPhone multitasks, you can make a phone call while emailing a photo or surfing the web over a Wi-Fi or 3G connection.
The Apple iPhone comes with some amazing applications. And you can choose from thousands more on the App Store and download them with a tap. Your iPhone gets even better with every new app. Play games. Be more productive. Keep yourself entertained. No matter what you want to do on iPhone, there's an app for that. With iPhone, Apple combined innovative hardware features with the world's most advanced mobile operating system to redefine what a mobile phone can do. Applications work together seamlessly and they sync with your computer—whether you're on a Mac or a PC. From its revolutionary Multi-Touch display to its intelligent keyboard to its smart sensors, iPhone is years ahead of any other mobile phone.
What is the total product offer for the Apple iPhone?
In: Operations Management