Consider the following table that contains an economy’s aggregate demand (AD) and short run aggregate supply (SAS) schedules.
|
Price level |
AD ($billion) |
SAS ($billion) |
|
100 |
1000 |
850 |
|
110 |
950 |
950 |
|
120 |
900 |
1050 |
|
130 |
850 |
1200 |
|
140 |
800 |
1250 |
A)State the short run macroeconomic equilibrium and explain why this is an equilibrium. If potential GDP for this economy is $1,050 billion, is there an inflationary or recessionary gap, and how large is it?
B)
Say real GDP supplied falls by $150 billion at every price level. Determine the new SAS schedule and identify the new short run macroeconomic equilibrium. Name one possible reason for SAS falling.
In: Economics
For each of the following questions, you need to include the information from both the primary and secondary surveys BUT you need to include/address what is unique for each of these three separate situations.
Case Study 2
Situation for Assessment
Donald D. is a 32 year-old man who just arrived to your ED after falling from a roof into a rock garden. His femur is protruding through his skin. The paramedics report that he was found in a large pool of blood. He presents unresponsive, BP 60/42, HR 168.
What potential life-threatening injuries does he have?
What is the priority of care?
What interventions are needed immediately?
In: Nursing
Oxbrayne info from previous question
(Consider the neighborhood, Oxbrayne, with 1933 residents where 50 % fall in the A-class.)
2. Sticking with Oxbrayne as describe above. Consider a sample size (with replacement) of 25 used to estimate the proportion of its residents falling in to A-class.
(a) What is the probability that an estimate of ˆp exactly coincides with the true proportion?
(b) Now what if the sample size was effectively infinite, and sampling was with replacement. What would your answer be now?
(c) How would you describe ˆp given the original sample size of 25 ? Be sure to specify all that you are capable of specifying.
(d) Calculate the probability that the ˆp estimate obtained in a sample would exceed a value of 59.1 %
In: Statistics and Probability
12. Problem 3.12 (Statement of Cash Flows)
| eBook
Hampton Industries had $70,000 in cash at year-end 2018 and $28,000 in cash at year-end 2019. The firm invested in property, plant, and equipment totaling $300,000 — the majority having a useful life greater than 20 years and falling under the alternative depreciation system. Cash flow from financing activities totaled +$210,000. Round your answers to the nearest dollar, if necessary.
|
In: Finance
Bob is driving down the street. He is not very attentive and crashes into the car in front of him, driven by Fred, a licensed blaster. Unknown to Bob, the car has dynamite in the trunk and explodes. The Fred is killed instantly. Jane is a pedestrian on the sidewalk next to the explosion. She is struck by flying chunks of the exploding car and seriously injured. The blast is so severe, that windows shatter as far a five blocks away. Ted is struck by falling glass from an office building five blocks from the explosion. Bob is uninjured. He is sued by Jane, Ted, and Fred's estate. How would he defend himself against these actions? Would his defenses likely be successful in any of the cases? Why or why not?
In: Psychology
The Brick Company had cash sales of $227,900 for Year 1, its
first year of operation. On April 2, the company purchased 214
units of inventory at $225 per unit. On September 1, an additional
161 units were purchased for $248 per unit. The company had 66
units on hand at the end of the year. The company’s income tax rate
is 40 percent. All transactions are cash transactions.
a. The preceding paragraph describes five
accounting events: (1) a sales transaction, (2) the first purchase
of inventory, (3) a second purchase of inventory, (4) the
recognition of cost of goods sold expense, and (5) the payment of
income tax expense. Show the amounts of each event in horizontal
statements models like the following ones, assuming first a FIFO
and then a LIFO cost flow.
b. Compute net income using FIFO.
c. Compute net income using LIFO.
e. Which method, FIFO or LIFO, produced the larger
amount of assets on the balance sheet
In: Accounting
Mastery Problem: Variable Costing for Management Analysis
Absorption vs. Variable
Operating income is one of the most important items reported by a company. Depending on the decision-making needs of management, operating income can be determined using absorption costing or variable costing.
Select whether the following characteristics are most often associated with absorption costing or variable costing.
| Required under generally accepted accounting principles (GAAP) | |
| Often used for internal use in decision making | |
| Cost of goods manufactured includes only variable manufacturing costs | |
| Used in reports prepared for external users | |
| Fixed factory overhead costs are not part of cost of goods manufactured | |
| Both fixed and variable factory costs are included in cost of goods sold and inventory |
Absorption Statement
Absorption costing does not distinguish between variable and fixed costs. All manufacturing costs are included in the cost of goods sold.
| Saxon, Inc. Absorption Costing Income Statement For the Year Ended December 31 |
||
| Sales | $1,280,000 | |
| Cost of goods sold: | ||
| Cost of goods manufactured | $840,000 | |
| Ending inventory | (168,000) | |
| Total cost of goods sold | (672,000) | |
| Gross profit | $608,000 | |
| Selling and administrative expenses | (305,000) | |
| Operating income | $303,000 | |
Variable Statement
Under variable costing, the cost of goods manufactured includes only variable manufacturing costs. This type of income statement includes a computation of manufacturing margin.
| Saxon, Inc. Variable Costing Income Statement For the Year Ended December 31 |
|||
| Sales | $1,280,000 | ||
| Variable cost of goods sold: | |||
| Variable cost of goods manufactured | $600,000 | ||
| Ending inventory | (120,000) | ||
| Total variable cost of goods sold | (480,000) | ||
| Manufacturing margin | $800,000 | ||
| Variable selling and administrative expenses | (240,000) | ||
| Contribution margin | $560,000 | ||
| Fixed costs: | |||
| Fixed manufacturing costs | $240,000 | ||
| Fixed selling and administrative expenses | 65,000 | ||
| Total fixed costs | (305,000) | ||
| Operating income | $255,000 | ||
Method Comparison
Review the income statements on the Absorption Statement and Variable Statement, then complete the following table. The company’s sales price per unit is $80, and the number of units in ending inventory is 4,000. There was no beginning inventory.
| Item | Amount |
| Number of units sold | |
| Variable sales and administrative cost per unit | $ |
| Number of units manufactured | |
| Variable cost of goods manufactured per unit | $ |
| Fixed manufacturing cost per unit | $ |
Manufacturing Decisions
Whenever the units manufactured differ from the units sold, finished goods inventory is affected. In analyzing operating income, such increases and decreases could be misinterpreted as operating efficiencies or inefficiencies. Each decision-making situation should be carefully analyzed in deciding whether absorption or variable costing reporting would be more useful.
All costs are controllable in the long run by someone within a business. For a given level of management, costs may be controllable costs or noncontrollable costs.
The production manager for Saxon, Inc. is worried because the company is not showing a high enough profit. Looking at the income statements on the Absorption Statement and the Variable Statement, he notices that the operating income is higher on the absorption cost income statement. He is considering manufacturing another 10,000 units, up to the company’s capacity for manufacturing, in the coming year. He reasons that this will boost operating income and satisfy the company’s owner that the company is sufficiently profitable. Although the total units manufactured changes, assume that total fixed costs, unit variable costs, unit sales price, and the sales levels are the same. Complete questions (1)-(4) that follow. If the answer is zero, enter "0".
1. Use the income statements on the Absorption Statement and Variable Statement to complete the following table for the original production level. Then prepare similar income statements at a production level 10,000 units higher and add that information to the table. Assume that total fixed costs, unit variable costs, unit sales price, and the sales levels are the same at both production levels.
| Operating Income | |||
| Original Production Level-Absorption |
Original Production Level-Variable |
Additional 10,000 Units-Absorption |
Additional 10,000 Units-Variable |
| $ | $ | $ | $ |
2. What is the change in operating income from producing 10,000 additional units under absorption costing?
$
3. What is the change in operating income from producing 10,000 additional units under variable costing?
$
4. What would be your recommendation to the production manager?
a. Do not produce the extra 10,000 units. The increase in operating income under absorption costing is due to fixed manufacturing costs being held in inventory, and the additional inventory will lead to higher handling, storage, financing, and obsolescence costs.
b. Produce the extra 10,000 units. Operating income will be increased, and the production manager will receive praise for creating higher profits.
c. Do not produce the extra 10,000 units. Operating income does not change under absorption costing when the additional units are produced.
d. Produce the extra 10,000 units. It's always a good idea to have extra units on hand and keep the factory operating at capacity, even if all the units are not sold.
In: Accounting
Mastery Problem: Variable Costing for Management Analysis
Absorption vs. Variable
Operating income is one of the most important items reported by a company. Depending on the decision-making needs of management, operating income can be determined using absorption costing or variable costing.
Select whether the following characteristics are most often associated with absorption costing or variable costing.
| Required under generally accepted accounting principles (GAAP) | |
| Often used for internal use in decision making | |
| Cost of goods manufactured includes only variable manufacturing costs | |
| Used in reports prepared for external users | |
| Fixed factory overhead costs are not part of cost of goods manufactured | |
| Both fixed and variable factory costs are included in cost of goods sold and inventory |
Absorption Statement
Absorption costing does not distinguish between variable and fixed costs. All manufacturing costs are included in the cost of goods sold.
| Saxon, Inc. Absorption Costing Income Statement For the Year Ended December 31 |
||
| Sales | $1,360,000 | |
| Cost of goods sold: | ||
| Cost of goods manufactured | $800,000 | |
| Ending inventory | (120,000) | |
| Total cost of goods sold | (680,000) | |
| Gross profit | $680,000 | |
| Selling and administrative expenses | (286,000) | |
| Operating income | $394,000 | |
Variable Statement
Under variable costing, the cost of goods manufactured includes only variable manufacturing costs. This type of income statement includes a computation of manufacturing margin.
| Saxon, Inc. Variable Costing Income Statement For the Year Ended December 31 |
|||
| Sales | $1,360,000 | ||
| Variable cost of goods sold: | |||
| Variable cost of goods manufactured | $560,000 | ||
| Ending inventory | (84,000) | ||
| Total variable cost of goods sold | (476,000) | ||
| Manufacturing margin | $884,000 | ||
| Variable selling and administrative expenses | (221,000) | ||
| Contribution margin | $663,000 | ||
| Fixed costs: | |||
| Fixed manufacturing costs | $240,000 | ||
| Fixed selling and administrative expenses | 65,000 | ||
| Total fixed costs | (305,000) | ||
| Operating income | $358,000 | ||
Method Comparison
Review the income statements on the Absorption Statement and Variable Statement, then complete the following table. The company’s sales price per unit is $80, and the number of units in ending inventory is 3,000. There was no beginning inventory.
| Item | Amount |
| Number of units sold | |
| Variable sales and administrative cost per unit | $ |
| Number of units manufactured | |
| Variable cost of goods manufactured per unit | $ |
| Fixed manufacturing cost per unit | $ |
Manufacturing Decisions
Whenever the units manufactured differ from the units sold, finished goods inventory is affected. In analyzing operating income, such increases and decreases could be misinterpreted as operating efficiencies or inefficiencies. Each decision-making situation should be carefully analyzed in deciding whether absorption or variable costing reporting would be more useful.
All costs are controllable in the long run by someone within a business. For a given level of management, costs may be controllable costs or noncontrollable costs.
The production manager for Saxon, Inc. is worried because the company is not showing a high enough profit. Looking at the income statements on the Absorption Statement and the Variable Statement, he notices that the operating income is higher on the absorption cost income statement. He is considering manufacturing another 10,000 units, up to the company’s capacity for manufacturing, in the coming year. He reasons that this will boost operating income and satisfy the company’s owner that the company is sufficiently profitable. Although the total units manufactured changes, assume that total fixed costs, unit variable costs, unit sales price, and the sales levels are the same. Complete questions (1)-(4) that follow. If the answer is zero, enter "0".
1. Use the income statements on the Absorption Statement and Variable Statement to complete the following table for the original production level. Then prepare similar income statements at a production level 10,000 units higher and add that information to the table. Assume that total fixed costs, unit variable costs, unit sales price, and the sales levels are the same at both production levels.
| Operating Income | |||
| Original Production Level-Absorption |
Original Production Level-Variable |
Additional 10,000 Units-Absorption |
Additional 10,000 Units-Variable |
| $ | $ | $ | $ |
2. What is the change in operating income from producing 10,000 additional units under absorption costing?
$
3. What is the change in operating income from producing 10,000 additional units under variable costing?
$
4. What would be your recommendation to the production manager?
a. Do not produce the extra 10,000 units. The increase in operating income under absorption costing is due to fixed manufacturing costs being held in inventory, and the additional inventory will lead to higher handling, storage, financing, and obsolescence costs.
b. Produce the extra 10,000 units. Operating income will be increased, and the production manager will receive praise for creating higher profits.
c. Do not produce the extra 10,000 units. Operating income does not change under absorption costing when the additional units are produced.
d. Produce the extra 10,000 units. It's always a good idea to have extra units on hand and keep the factory operating at capacity, even if all the units are not sold.
In: Accounting
On Thursday night Dr. Jones was at home watching television and spending time with his family. The phone rang. The South Shore General Hospital ER physician asked him to see an urgent patient. Dr. Jones replied that he was not on call for the emergency room at South Shore General Hospital, and furthermore, the hospital was paying members of a competing group to cover the emergency room. The emergency room doctor said that he was aware of the arrangement with the competing group. However, the ER could not reach the on-call physi-cian and had tried for some time. Dr. Jones, who earlier had a glass of wine with dinner, responded, “You’ll have to keep trying. I’m not coming in.” The next day Dr. Jones called the Chief of Staff and the Chief Medical Officer (CMO) of South Shore General Hospital and informed them that neither he nor any members of his group would cover the ER unless they were compensated in a similar manner to the competing group and had an appropriate contractor arrangement with the hospital. Dr. Jones asked the Chief of Staff and CMO if they worked for free. Dead silence. “While you’re thinking about that question, let me say this to both of you. Doctors are working harder and longer hours and earning less money every year. Why should we give up our free time and work for nothing when you’re willing to pay the other group?”
1. If he had gone in and there had been an adverse patient outcome, how do you think the fact that he had consumed an alcoholic beverage that evening would play in a courtroom?
2. How should the ER physician have handled this matter? What is the best way to ensure emergency room coverage?
3. What steps should the administration of South Shore General Hospital take in the future to prevent this problem from occurring again? Provide your reflections and personal opinions as well as your recommendations and rationale for your responses.
Background Statement?
Major Problems and Secondary Issues?
Your Role?
Organizational Strengths and Weakness?
Alternatives and Recommended Solutions?
Evaluation?
In: Nursing
Firms often make decisions that involve spending money in the present and expecting to earn profits in the future. Firms often need raise the financial capital to meet various needs that include projects, equipment, staffing, expansion, and more.
In: Finance