Assume that in 2018 the nominal GDP was $8,000 billion and in 2019 the nominal GDP was $8,500 billion. Based on this information can we make any meaningful comparison of the economy’s performance?
Would the value of automobile production in 2019 in the U.S. by a Korean auto company be counted in the U.S.’s GDP for the Year 2019? Briefly explain.
If you purchased $10,000 of Google stock in 2019, would that purchase be included in GDP statistics for 2019?
As a result of covid-19 pandemic the U.S. economy declined by a historical amount in the 2nd quarter of this year. The revised second quarter GDP data was announced on 2nd October 2020. What was the annual rate of decline for the 2nd quarter U.S. GDP growth?
In: Economics
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The Molson Company had budgeted production for the year as follows:
| Quarter | 1 | 2 | 3 | 4 |
| Production in units | 11,700 | 13,700 | 19,600 | 15,700 |
Four pounds of raw materials are required for each unit produced. Raw materials on hand at the start of the year total 5,700 lbs. The raw materials inventory at the end of each quarter should equal 10% of the next quarter's production needs in materials. Budgeted purchases of raw materials in the second quarter would be:
In: Accounting
Calculating Manufacturing Cycle Efficiency
Indy Company has the following data for one of its manufacturing plants:
Maximum units produced in a quarter (3-month period): 250,000
units
Actual units produced in a quarter (3-month period): 210,000
units
Productive hours in one quarter: 25,000 hours
The actual cycle time for Indy Company is 7.14 minutes, and the theoretical cycle time is 6 minutes.
Required:
1. Calculate the amount of processing time and the amount of nonprocessing time. If required, round your answers to two decimal places.
| Processing time | minutes |
| Nonprocessing time | minutes |
2. Calculate the MCE. If required, round your
answer to nearest whole number.
%
In: Accounting
|
Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The standard cost for one pool is as follows: |
| Standard Quantity or Hours | Standard Price or Rate |
Standard Cost |
|||||
| Direct materials | 1.20 | kilograms | $4.00 | per kilogram | $ | 4.80 | |
| Direct labour | 0.80 | hours | $6.00 | per hour | 4.80 | ||
| Variable manufacturing overhead | 0.40 | machine-hours | $4.00 | per machine-hour | 1.60 | ||
| Total standard cost | $ | 11.20 | |||||
|
The plant has been experiencing problems for some time, as is shown by its June income statement when it made and sold 15,200 pools; the normal volume is 15,350 pools per month. Fixed costs are allocated using machine-hours. |
| Flexible Budgeted | Actual | |||
| Sales (15,200 pools) | $ | 456,000 | $ | 456,000 |
| Less: Variable expenses: | ||||
| Variable cost of goods sold* | 170,240 | 195,002 | ||
| Variable selling expenses | 20,300 | 20,300 | ||
| Total variable expenses | 190,540 | 215,302 | ||
| Contribution margin | 265,460 | 240,698 | ||
| Less: Fixed expenses: | ||||
| Manufacturing overhead | 132,000 | 132,000 | ||
| Selling and administrative | 85,120 | 85,120 | ||
| Total fixed expenses | 217,120 | 217,120 | ||
| Net income | $ | 48,340 | $ | 23,578 |
| *Contains direct materials, direct labour, and variable manufacturing overhead. |
|
Janet Dunn, the general manager of the Westwood Plant, wants to get things under control. She needs information about the operations in June since the income statement signalled that the problem could be due to the variable cost of goods sold. Dunn learns the following about operations and costs in June: |
| a. | 30,700 kilograms of materials were purchased at a cost of $3.70 per kilogram. |
| b. |
24,600 kilograms of materials were used in production. (Finished goods and work-in-process inventories are insignificant and can be ignored.) |
| c. | 11,600 direct labour-hours were worked at a cost of $7 per hour. |
| d. |
Variable manufacturing overhead cost totalling $24,612 for the month was incurred. A total of 5,860 machine-hours was recorded. |
| It is the company’s policy to close all variances to cost of goods sold on a monthly basis. | |
| Required: |
| 1. | Compute the following variances for June: |
| a. |
Direct materials price and quantity variances. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) |
| b. |
Direct labour rate and efficiency variances. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) |
|
||||||||||
| c. |
Variable overhead spending and efficiency variances. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) |
|
||||||||||
| 2-a. |
Summarize the variances you computed in part (1) by showing the net overall favourable or unfavourable variance for the month. (Indicate the effect of variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) |
|
In: Accounting
1) In this example, how might this new surcharge effect supply and demand?
United Parcel Service Inc. is adding “peak” surcharges for companies that have been inundating its delivery network with many more packages and oversize items during the coronavirus pandemic, an unprecedented move to manage a summer flood of shipments and higher costs. UPS typically imposes extra fees on merchants during the busy Christmas shopping season, but—for the first time in the e-commerce era—will add such surcharges starting May 31. The fees would apply to large online sellers like Amazon. com Inc. as well as traditional retailers like Target Corp. and Best Buy Co. that have shifted heavily to e-commerce as many stores have closed temporarily. Retailers will have to calculate whether to raise prices, absorb the added cost or a combination of the two. They can also try workarounds to avoid the fee by closely monitoring the amount and sizes of packages they ship with UPS, using another carrier or nudging customers to pick up online orders in stores. Delivery companies like FedEx Corp., UPS and the U.S. Postal Service are struggling with an unexpected increase in online shopping over the past 2½ months as consumers buy online everything from canned foods and toilet paper to office chairs and backyard pools. Digital sales at Target and Best Buy more than doubled in the most recent quarter. The added volumes are testing the limits of these delivery networks, which have been operating seven days a week. For FedEx and UPS, residential deliveries are also less profitable than bulk shipments to businesses, which have dried up as many offices and nonessential companies remain closed. UPS has said it recently has been delivering 70% of packages to homes, versus about 54% during all of 2019. It has taken on more of Amazon’s package volumes after FedEx cut ties with the online giant last year. FedEx recently limited the number of packages that about two dozen customers including Bed Bath & Beyond Inc., Nordstrom Inc. and Kohl’s Corp. could ship from their stores. Those companies had repurposed stores into fulfillment centers after they were forced to shut down temporarily. FedEx and UPS both have also imposed surcharges on international packages as a decline in passenger jets has cut into air cargo capacity. FedEx hasn’t added such fees on domestic shipments. Starting May 31, UPS is adding surcharges on customers whose weekly volume of shipments using its lower-priced service has blown through what they were shipping in February. The surcharge adds 30 cents on each package shipped under UPS Ground and SurePost, the service in which UPS drops packages at the Postal Service for delivery to homes. The added fee kicks in only on shippers that topped their average weekly volume in February by more than 25,000 packages. The average revenue per domestic package was $6.44 at UPS in the first quarter. Another surcharge adds $31.45 onto each large package shipped, which could hit items like desks, patio umbrellas and trampolines that have been popular online purchases during lockdowns across the U.S. as millions of people work from home, redecorate and try to entertain their children. That fee would apply to shippers after they ship more than 500 large packages in a week. Both surcharges will be in effect until further notice. A UPS spokesman said the company routinely adjusts prices to take into account changing market conditions and added costs. “The peak surcharges reflect the current dynamic market conditions and uncertainties caused by the coronavirus, which is impacting available capacity and market demand,” the spokesman said. The fees are likely to hit large shippers the most, rather than smaller business or occasional shippers. Target, for instance, said last week that its online order volume more than tripled in April compared with last year. It rose 141% during the three months that ended May 2. Amazon’s revenue rose 26% in the March quarter from a year ago, while its world-wide shipping costs rose 49%. Amazon is slowly returning to normal operations after the coronavirus-driven surge in demand upended its operations, prompting the company to limit shipments of nonessential items and slowed its shipping speeds. On Thursday, the Seattle company said it plans to keep most of the U.S. jobs it added to meet demand during March and April. “All of the large e-commerce shippers are going to get hit with this,” John Haber, CEO of supply-chain consulting firm Spend Management Experts. “A lot of them will try to negotiate it out, but there hasn’t been a lot of flexibility about not paying these peak surcharges.” Representatives for Amazon, Target and Best Buy didn’t immediately respond to requests for comment on the UPS surcharges.
In: Economics
Monopoly is a market structure characterized by a single seller, selling a unique product in the market. In a monopoly market, the seller faces no competition, as he is the sole seller of goods with no close substitute. Monopoly typically has an unfair advantage since they are either the only provider of a product or control most of the market share or customers for the product. Although monopolies might differ from industry-to-industry, they tend to share similar characteristics. Discuss at least three (3) of these characteristics in your own
In: Finance
The balance of Landy Corporation's accounts payable at the beginning of the most recent year was $ 50,000. At the end of the year, the accounts payable balance was $ 54,000. Landy's sales revenue for the year was $ 3,105,000, while its cost of goods sold for the year was $ 1,508,000. Calculate Landy's days' payable outstanding (DPO) for the year. Assume inventory levels are constant throughout the year. If the credit terms from Landy's suppliers are n/30, how would you interpret Landy's DPO?
In: Finance
Match each statement below with the appropriate inventory costing method.
1. This inventory costing method shows cost of goods sold on the income statement at the most current inventory costs during a period of deflation
2. This inventory costing method results in the highest amount of income tax expense reported on the income statement during a period of deflation
3. This inventory costing method results in the highest amount paid to purchase inventory during a period of inflation
In: Accounting
A house owner wants to maintain his house. What is the economic term for this desire? What enables a baker to obtain new shoes from a cobbler who doesn't need any baked goods?
Equilibrium prices will spontaneously establish themselves in a competitive market and will persist until things changes?
Which describes a price mechanism through which the government may correct a failing market?
Which is most likely to increase the supply of soldiers for an all-volunteer army?
In: Economics
Transactions in the month of January Make the daily entries Trial balance, T accounts and prepare financial statements for the first quarter to March 31, 2020 |
||||
| 01/01/2020 | ||||
| 1. Portes Café Invested 39,000 to start new business. | ||||
| 2. First Month sales were 65,000 | ||||
| 3. Purchase new equipment on account by 120,000 in 36 Monthly Payments. | ||||
| 4. Billed 5,000 in bread distributions. | ||||
| 5. Paid 3,000 in salaries | ||||
| 6. Borrowed 85,000 on a note in 65 monthly Payments. | ||||
| 7. Paid Utilities by 2,500 | ||||
| 8. Prepaid Insurance to the year is 3,900 | ||||
| 9. Paid Prepaid Rent to the year is 4,000 | ||||
| 02/01/2020 | ||||
| 10. Second Month Sales were 90,000 | ||||
| 11. Paid Salaries by 3,600 | ||||
| 12. Paid Utilities by 3,150 | ||||
| 13. Collected total Amount billed of the month of jannuary. | ||||
| 14. Paid first amount of a note payable. | ||||
| 15. Paid First amount of the accounts payable Equipment | ||||
| 03/01/2020 | ||||
| 16. Third Month sales were 150,000 | ||||
| 17. Paid Salaries by 10,550 | ||||
| 18. Paid Utilities by 4,560 | ||||
| 19. Paid Second amount of a note payable | ||||
| 20. Paid Second amount of the accounts payable Equipment | ||||
| 21. Billed to customers 20,000 in bread distributions | ||||
| 22. Paid 8% Income Tax of the total sales | ||||
| 23. Depreciation of the equipment is to 5 years. First quarterly is $6,000 | ||||
| 24. Collected 50,000 in unearned sales in bread distributions |
In: Accounting