Suppose the exchange rate between the U.S. dollar and the Japanese yen is initially ¥90/$. According to purchasing-power parity, if the price of traded goods rises by 5 percent in the United States and by 15 percent in Japan, what will be the expected exchange rate?
|
¥99/$ |
||
|
¥72/$ |
||
|
¥81/$ |
||
|
¥90/$ |
||
|
¥108/$ |
If Mexico dollarizes its currency, it essentially
|
Ensures that Mexico's business cycle is identical to that of the U.S. |
||
|
Allows the U.S. Federal Reserve Bank to be Mexico's lender of last resort |
||
|
Accepts the monetary policy of the U.S. Federal Reserve Bank |
||
|
Wants the U.S. Treasury be in charge of its tax collections |
||
|
Abandons its ability to run governmental balanced budgets |
__________ is a currency basket, defined by the International Monetary Fund, to which some nations peg their currencies
|
Primary Reserve Assets |
||
|
Bread Basket |
||
|
Special Drawing Rights |
||
|
Swap facility |
||
|
IMF tranche |
If Japan has floating rate, a depreciation in the value of Japanese yen over time will result in Japanese
|
Both exports and imports rising |
||
|
Both exports and imports falling |
||
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Exports rising, imports falling |
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Imports rising, exports falling |
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|
Both Japanese imports and exports will remain unchanged |
In: Economics
Operating Budget, Comprehensive Analysis
Allison Manufacturing produces a subassembly used in the production of jet aircraft engines. The assembly is sold to engine manufacturers and aircraft maintenance facilities. Projected sales in units for the coming 5 months follow:
| January | 40,000 | ||
| February | 50,000 | ||
| March | 60,000 | ||
| April | 60,000 | ||
| May | 62,000 |
The following data pertain to production policies and manufacturing specifications followed by Allison Manufacturing:
| Direct Material | Per-Unit Usage | DM Unit Cost ($) | |
| Metal | 10 lbs. | 8 | |
| Components | 6 | 5 | |
| Fixed-Cost Component ($) |
Variable-Cost Component ($) |
||
| Supplies | — | 1.00 | |
| Power | — | 0.50 | |
| Maintenance | 30,000 | 0.40 | |
| Supervision | 16,000 | — | |
| Depreciation | 200,000 | — | |
| Taxes | 12,000 | — | |
| Other | 80,000 | 0.50 | |
| Fixed Costs ($) |
Variable Costs ($) |
||
| Salaries | 50,000 | — | |
| Commissions | — | 2.00 | |
| Depreciation | 40,000 | — | |
| Shipping | — | 1.00 | |
| Other | 20,000 | 0.60 | |
Required:
1. Prepare a monthly operating budget for the first quarter with the following schedules. (Note: Assume that there is no change in work-in-process inventories.)
a. Schedule 1: Sales Budget. Do not include a multiplication symbol as part of your answer.
| Allison Manufacturing | ||||
| Sales Budget | ||||
| For the Quarter Ended March 31 | ||||
| January | February | March | Total | |
| Units | ||||
| Selling price | $ | $ | $ | $ |
| Sales | $ | $ | $ | $ |
Feedback
Correct
b. Schedule 2: Production Budget.
| Allison Manufacturing | ||||
| Production Budget | ||||
| For the Quarter Ended March 31 | ||||
| January | February | March | Total | |
| Sales | ||||
| Desired ending inventory | ||||
| Total needs | ||||
| Less: Beginning inventory | ||||
| Units to be produced | ||||
Feedback
Partially correct
c. Schedule 3: Direct Materials Purchases Budget. Do not include a multiplication symbol as part of your answer.
| Allison Manufacturing | ||||||||
| Direct Materials Purchases Budget | ||||||||
| For the Quarter Ended March 31 | ||||||||
| January Metal | January Components | February Metal | February Components | March Metal | March Components | Total Metal | Total Components | |
| Units to be produced | ||||||||
| Direct materials per unit | ||||||||
| Production needs | ||||||||
| Desired ending inventory | ||||||||
| Total needs | ||||||||
| Less: Beginning inventory | ||||||||
| Direct materials to be purchased | ||||||||
| Cost per unit | $ | $ | $ | $ | $ | $ | $ | $ |
| Total cost | $ | $ | $ | $ | $ | $ | $ | $ |
Feedback
Correct
d. Schedule 4: Direct Labor Budget. If required, round amounts to the nearest cent. Do not include a multiplication symbol as part of your answer.
| Allison Manufacturing | ||||
| Direct Labor Budget | ||||
| For the Quarter Ended March 31 | ||||
| January | February | March | Total | |
| Units to be produced | ||||
| Direct labor time per unit (hours) | ||||
| Total hours needed | ||||
| Cost per hour | $ | $ | $ | $ |
| Total cost | $ | $ | $ | $ |
Feedback
Correct
e. Schedule 5: Overhead Budget. If required, round amounts to the nearest cent. Do not include a multiplication symbol as part of your answer.
| Allison Manufacturing | ||||
| Overhead Budget | ||||
| For the Quarter Ended March 31 | ||||
| January | February | March | Total | |
| Budgeted direct labor hours | ||||
| Variable overhead rate | $ | $ | $ | $ |
| Budgeted variable overhead | $ | $ | $ | $ |
| Budgeted fixed overhead | ||||
| Total overhead | $ | $ | $ | $ |
Feedback
Correct
f. Schedule 6: Selling and Administrative Expenses Budget. If required, round amounts to the nearest cent. Do not include a multiplication symbol as part of your answer.
| Allison Manufacturing | ||||
| Selling and Administrative Expenses Budget | ||||
| For the Quarter Ended March 31 | ||||
| January | February | March | Total | |
| Planned sales | ||||
| Variable selling and administrative expenses per unit | $ | $ | $ | $ |
| Total variable expense | $ | $ | $ | $ |
| Fixed selling and administrative expenses: | ||||
| Salaries | $ | $ | $ | $ |
| Depreciation | ||||
| Other | ||||
| Total fixed expenses | $ | $ | $ | $ |
| Total selling and administrative expenses | $ | $ | $ | $ |
Feedback
Correct
g. Schedule 7: Ending Finished Goods Inventory Budget. If required, round amounts to the nearest cent.
| Allison Manufacturing | ||
| Ending Finished Goods Inventory Budget | ||
| For the Quarter Ended March 31 | ||
| Unit cost computation: | ||
| Direct materials: | ||
| Metal | $ | |
| Components | $ | |
| Direct labor | ||
| Overhead: | ||
| Variable | ||
| Fixed | ||
| Total unit cost | $ | |
| Finished goods inventory | $ | |
Feedback
Partially correct
h. Schedule 8: Cost of Goods Sold Budget.
| Allison Manufacturing | ||
| Cost of Goods Sold Budget | ||
| For the Quarter Ended March 31 | ||
| Direct materials | ||
| Metal | $ | |
| Components | $ | |
| Direct labor used | ||
| Overhead | ||
| Budgeted manufacturing costs | $ | |
| Add: Beginning finished goods | ||
| Cost of goods available for sale | $ | |
| Less: Ending finished goods | ||
| Budgeted cost of goods sold | $ | |
Feedback
Partially correct
i. Schedule 9: Budgeted Income Statement. Use a minus sign to indicate a negative amount.
| Allison Manufacturing | |
| Budgeted Income Statement | |
| For the Quarter Ended March 31 | |
| Sales | $ |
| Less: Cost of goods sold | |
| Gross margin | $ |
| Less: Selling and administrative expenses | |
| Income before taxes | $ |
Feedback
Partially correct
j. Schedule 10: Cash Budget. If an amount is zero, enter "0". Use a minus sign to enter a negative amount.
| Allison Manufacturing | ||||
| Cash Budget | ||||
| For the Quarter Ended March 31 | ||||
| January | February | March | Total | |
| Beginning balance | $ | $ | $ | $ |
| Cash receipts | ||||
| Cash available | $ | $ | $ | $ |
| Less Disbursements: | ||||
| Purchases | $ | $ | $ | $ |
| Direct labor | ||||
| Overhead | ||||
| Selling & admin. | ||||
| Total | $ | $ | $ | $ |
| Tentative ending balance | $ | $ | $ | $ |
| Borrowed/repaid | ||||
| Interest paid | ||||
| Ending balance | $ | $ | $ | $ |
In: Accounting
Operating Budget, Comprehensive Analysis
Allison Manufacturing produces a subassembly used in the production of jet aircraft engines. The assembly is sold to engine manufacturers and aircraft maintenance facilities. Projected sales in units for the coming 5 months follow:
| January | 40,000 | ||
| February | 50,000 | ||
| March | 60,000 | ||
| April | 60,000 | ||
| May | 62,000 |
The following data pertain to production policies and manufacturing specifications followed by Allison Manufacturing:
| Direct Material | Per-Unit Usage | DM Unit Cost ($) | |
| Metal | 10 lbs. | 8 | |
| Components | 6 | 5 | |
| Fixed-Cost Component ($) |
Variable-Cost Component ($) |
||
| Supplies | — | 1.00 | |
| Power | — | 0.50 | |
| Maintenance | 30,000 | 0.40 | |
| Supervision | 16,000 | — | |
| Depreciation | 200,000 | — | |
| Taxes | 12,000 | — | |
| Other | 80,000 | 0.50 | |
| Fixed Costs ($) |
Variable Costs ($) |
||
| Salaries | 50,000 | — | |
| Commissions | — | 2.00 | |
| Depreciation | 40,000 | — | |
| Shipping | — | 1.00 | |
| Other | 20,000 | 0.60 | |
Required:
1. Prepare a monthly operating budget for the first quarter with the following schedules. (Note: Assume that there is no change in work-in-process inventories.)
a. Schedule 1: Sales Budget. Do not include a multiplication symbol as part of your answer.
| Allison Manufacturing | ||||
| Sales Budget | ||||
| For the Quarter Ended March 31 | ||||
| January | February | March | Total | |
| Units | ||||
| Selling price | $ | $ | $ | $ |
| Sales | $ | $ | $ | $ |
b. Schedule 2: Production Budget.
| Allison Manufacturing | ||||
| Production Budget | ||||
| For the Quarter Ended March 31 | ||||
| January | February | March | Total | |
| Sales | ||||
| Desired ending inventory | ||||
| Total needs | ||||
| Less: Beginning inventory | ||||
| Units to be produced | ||||
c. Schedule 3: Direct Materials Purchases Budget. Do not include a multiplication symbol as part of your answer.
| Allison Manufacturing | ||||||||
| Direct Materials Purchases Budget | ||||||||
| For the Quarter Ended March 31 | ||||||||
| January Metal | January Components | February Metal | February Components | March Metal | March Components | Total Metal | Total Components | |
| Units to be produced | ||||||||
| Direct materials per unit | ||||||||
| Production needs | ||||||||
| Desired ending inventory | ||||||||
| Total needs | ||||||||
| Less: Beginning inventory | ||||||||
| Direct materials to be purchased | ||||||||
| Cost per unit | $ | $ | $ | $ | $ | $ | $ | $ |
| Total cost | $ | $ | $ | $ | $ | $ | $ | $ |
d. Schedule 4: Direct Labor Budget. If required, round amounts to the nearest cent. Do not include a multiplication symbol as part of your answer.
| Allison Manufacturing | ||||
| Direct Labor Budget | ||||
| For the Quarter Ended March 31 | ||||
| January | February | March | Total | |
| Units to be produced | ||||
| Direct labor time per unit (hours) | ||||
| Total hours needed | ||||
| Cost per hour | $ | $ | $ | $ |
| Total cost | $ | $ | $ | $ |
e. Schedule 5: Overhead Budget. If required, round amounts to the nearest cent. Do not include a multiplication symbol as part of your answer.
| Allison Manufacturing | ||||
| Overhead Budget | ||||
| For the Quarter Ended March 31 | ||||
| January | February | March | Total | |
| Budgeted direct labor hours | ||||
| Variable overhead rate | $ | $ | $ | $ |
| Budgeted variable overhead | $ | $ | $ | $ |
| Budgeted fixed overhead | ||||
| Total overhead | $ | $ | $ | $ |
f. Schedule 6: Selling and Administrative Expenses Budget. If required, round amounts to the nearest cent. Do not include a multiplication symbol as part of your answer.
| Allison Manufacturing | ||||
| Selling and Administrative Expenses Budget | ||||
| For the Quarter Ended March 31 | ||||
| January | February | March | Total | |
| Planned sales | ||||
| Variable selling and administrative expenses per unit | $ | $ | $ | $ |
| Total variable expense | $ | $ | $ | $ |
| Fixed selling and administrative expenses: | ||||
| Salaries | $ | $ | $ | $ |
| Depreciation | ||||
| Other | ||||
| Total fixed expenses | $ | $ | $ | $ |
| Total selling and administrative expenses | $ | $ | $ | $ |
g. Schedule 7: Ending Finished Goods Inventory Budget. If required, round amounts to the nearest cent.
| Allison Manufacturing | ||
| Ending Finished Goods Inventory Budget | ||
| For the Quarter Ended March 31 | ||
| Unit cost computation: | ||
| Direct materials: | ||
| Metal | $ | |
| Components | $ | |
| Direct labor | ||
| Overhead: | ||
| Variable | ||
| Fixed | ||
| Total unit cost | $ | |
| Finished goods inventory | $ | |
h. Schedule 8: Cost of Goods Sold Budget.
| Allison Manufacturing | ||
| Cost of Goods Sold Budget | ||
| For the Quarter Ended March 31 | ||
| Direct materials | ||
| Metal | $ | |
| Components | $ | |
| Direct labor used | ||
| Overhead | ||
| Budgeted manufacturing costs | $ | |
| Add: Beginning finished goods | ||
| Cost of goods available for sale | $ | |
| Less: Ending finished goods | ||
| Budgeted cost of goods sold | $ | |
i. Schedule 9: Budgeted Income Statement. Use a minus sign to indicate a negative amount.
| Allison Manufacturing | |
| Budgeted Income Statement | |
| For the Quarter Ended March 31 | |
| Sales | $ |
| Less: Cost of goods sold | |
| Gross margin | $ |
| Less: Selling and administrative expenses | |
| Income before taxes | $ |
j. Schedule 10: Cash Budget. If an amount is zero, enter "0". Use a minus sign to enter a negative amount.
| Allison Manufacturing | ||||
| Cash Budget | ||||
| For the Quarter Ended March 31 | ||||
| January | February | March | Total | |
| Beginning balance | $ | $ | $ | $ |
| Cash receipts | ||||
| Cash available | $ | $ | $ | $ |
| Less Disbursements: | ||||
| Purchases | $ | $ | $ | $ |
| Direct labor | ||||
| Overhead | ||||
| Selling & admin. | ||||
| Total | $ | $ | $ | $ |
| Tentative ending balance | $ | $ | $ | $ |
| Borrowed/repaid | ||||
| Interest paid | ||||
| Ending balance | $ | $ | $ | $ |
In: Finance
If marginal productivity of labor is falling, by hiring another unit of labor (all else held the same) we know that:
A
Average productivity must be falling.
B
Marginal cost must be falling.
C
Marginal cost must be rising.
D
Average cost must be falling.
In: Economics
In: Economics
The production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:
| 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | |
| Units to be produced | 9,000 | 12,000 | 11,000 | 10,000 |
In addition, 15,750 grams of raw materials inventory is on hand at the start of the 1st Quarter and the beginning accounts payable for the 1st Quarter is $5,600.
Each unit requires 7 grams of raw material that costs $1.20 per gram. Management desires to end each quarter with an inventory of raw materials equal to 25% of the following quarter’s production needs. The desired ending inventory for the 4th Quarter is 8,000 grams. Management plans to pay for 60% of raw material purchases in the quarter acquired and 40% in the following quarter. Each unit requires 0.20 direct labor-hours and direct laborers are paid $15.50 per hour.
Required:
1-a. Prepare the company’s direct materials budget for the upcoming fiscal year. (Round "Unit cost of raw materials" answers to 2 decimal places.) Please also insert the year column after Quarter 4
| Required production in units of finished goods | Quarter 1 | Quarter 2 | Quarter 3 | Quarter4 |
| Units of Raw Materials Needed to meet production | ||||
| Units of Raw Materials needed per unit finished goods | ||||
| Add desired Units of ending raw material | ||||
| Total Units of raw material needed | ||||
| ? | ||||
| Units of raw material to be purchased | ||||
| Unit cost of raw material | ||||
| Cost of raw material to be purchased | ||||
*The chart ends after cost of raw materials to be purchased*
1-b. Prepare a schedule of expected cash disbursements for purchases of materials for the upcoming fiscal year.
| Beg. Balance Account Payable | Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | Year | |
| 1st Quarter Purchases | ||||||
| 2nd Quarter Purchases | ||||||
| 3rd Quarter Purchases | ||||||
| 4th Quarter Purchases | ||||||
| Total cash disbursement |
2. Prepare the company’s direct labor budget for the upcoming
fiscal year, assuming that the direct labor workforce is adjusted
each quarter to match the number of hours required to produce the
forecasted number of units produced. (Round "Direct
labor-hours per unit" and "Direct labor cost per hour" answers to 2
decimal places.) Please also add the year column next to
it. Thank you!
| Required Production in units | Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 |
| Direct Labor Hours per unit | ||||
| Total Direct Labor cost per hour | ||||
| Direct Labor Cost per hour | ||||
| Total Direct Labor Cost |
In: Accounting
Exercise 8-3 (Algo) Direct Materials Budget [LO8-4]
Two grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western Siberia. The cost of the musk oil is $2.10 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3:
| Year 2 | Year 3 | ||||||
| First | Second | Third | Fourth | First | |||
| Budgeted production, in bottles | 84,000 | 114,000 | 174,000 | 124,000 | 94,000 | ||
The inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter’s production needs. Some 33,600 grams of musk oil will be on hand to start the first quarter of Year 2.
Required:
Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2.
In: Accounting
The following information relates to Tea Limited, a company that will commence business on 1 January 2021. The company is preparing its budget for 2021 and will detail the projected activities for each quarter of the year.
Information:
1. Cash at bank on 1 January 2021 amounted to R150 000.
2. Projected sales per quarter for 2021:
First quarter R750 000
Second quarter R825 000
Third quarter R930 000
Fourth quarter R980 000
Fifty percent (50%) of the sales are for cash and fifty percent (50%) are on credit. Cash customers are entitled to a 5% cash discount.
3. Collection of credit sales:
60% of the credit sales are collected in the quarter of the sale.
30% is collected in the following quarter and the balance is written off as a bad debt.
4. Purchases for each quarter are expected to be as follows:
First quarter R100 000
Second quarter R120 000
Third quarter R140 000
Fourth quarter R180 000
All purchases are on credit. 75% of the purchases will be paid for in the quarter of purchase and the remaining 25% in the following quarter.
5. Fixed overheads total R200 000 per year and are paid for equally each quarter.
6. Administrative expenses are paid for in the quarter in which they are incurred and are estimated at a total of R20 000 per quarter.
7. An investment of R150 000 matures on 30 June 2021, and interest of R15 000 will also be received on this date.
Required:
2.1 Prepare the Debtors Collection Schedule for the four quarters of 2021.
2.2 Prepare the Cash Budget for the four quarters of 2021.
In: Accounting
The following information relates to Tea Limited, a company that will commence business on 1 January 2021.
The company is preparing its budget for 2021 and will detail the projected activities for each quarter of the year.
Information:
1. Cash at bank on 1 January 2021 amounted to R150 000.
2. Projected sales per quarter for 2021:
First quarter R750 000
Second quarter R825 000
Third quarter R930 000
Fourth quarter R980 000
Fifty percent (50%) of the sales are for cash and fifty percent (50%) are on credit. Cash customers are entitled to a 5% cash discount.
3. Collection of credit sales:
60% of the credit sales are collected in the quarter of the sale.
30% is collected in the following quarter and the balance is written off as a bad debt.
4. Purchases for each quarter are expected to be as follows:
First quarter R100 000
Second quarter R120 000
Third quarter R140 000
Fourth quarter R180 000
All purchases are on credit. 75% of the purchases will be paid for in the quarter of purchase and the remaining 25% in the following quarter.
5. Fixed overheads total R200 000 per year and are paid for equally each quarter.
6. Administrative expenses are paid for in the quarter in which they are incurred and are estimated at a total of R20 000 per quarter.
7. An investment of R150 000 matures on 30 June 2021, and interest of R15 000 will also be received on this date.
Required:
2.1 Prepare the Debtors Collection Schedule for the four quarters of 2021.
2.2 Prepare the Cash Budget for the four quarters of 2021.
In: Accounting
Nash Company sells on credits goods that cost $310,000 to Ricard
Company for $409,500 on January 2, 2020. The sales price includes
an installation fee, which has a standalone selling price of
$42,500. The standalone selling price of the goods is $367,000. The
installation is considered a separate performance obligation and is
expected to take 6 months to complete.
(a) Prepare the journal entries (if any) to record
the sale on January 2, 2020. (Credit account titles are
automatically indented when amount is entered. Do not indent
manually. If no entry is required, select "No entry" for the
account titles and enter 0 for the
amounts.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
Jan. 2, 2020 |
enter an account title to record the transaction on January 2, 2017 |
enter a debit amount |
enter a credit amount |
|
enter an account title to record the transaction on January 2, 2017 |
enter a debit amount |
enter a credit amount |
|
|
enter an account title to record the transaction on January 2, 2017 |
enter a debit amount |
enter a credit amount |
|
| (To record sales on account) | |||
|
Jan. 2, 2020 |
enter an account title to record the transaction on January 2, 2017 |
enter a debit amount |
enter a credit amount |
|
enter an account title to record the transaction on January 2, 2017 |
enter a debit amount |
enter a credit amount |
|
| (To record cost of goods aold) | |||
(b) Nash prepares an income statement for the
first quarter of 2020, ending on March 31, 2020 (installation was
completed on June 18, 2020). How much revenue should Nash recognize
related to its sale to Ricard?
| First Quarter | |||
|---|---|---|---|
|
Sales Revenue |
$enter a dollar amount |
||
|
Cost of Goods Sold |
enter a dollar amount |
||
|
Gross Profit |
$enter a total amount for this statement |
show work and explain
In: Accounting