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2 years ago

"An inflationary gap exists when AD and SRAS" :

Business

2 answers:

lozanna [386]2 years ago

8 0

Answer: The Answer IS A.

Explanation: fail to Intersect

svetoff [14.1K]2 years ago

8 0

Answer: b). Intersect to the right of Natural Real GDP.

Explanation: Inflation is a persistent increase in the general price level of goods and services in an economy over a given period of time.

Inflationary gap describes the difference between the current level of real gross domestic product and the anticipated GDP that would occur if an economy is at full employment.

An inflationary gap however exists when aggregate demand (AD) and short run aggregate supply (SRAS) intersect to the right of natural real GDP.

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Company XYZ has 2 fixed price contracts for 2 different clients. The company has enough capacity for both contracts but is uncer

frozen [14]

Answer:

The contract A yields a loss under ABC but Contract B yields a profit.

ABC Profit contract A $ (3000) contract B $ 11250

Under absorption costing both contract yield profits.

Absorption Profit contract A $ 3250 contract B $7500 

Management should make decisions using ABC and reject Contract A and accept Contract B.

Explanation:

Customer AAA BBB

Component Type A999 B999

Contract Value ($) $27,000 $100,000

Contract Quantity 1,000 unit 2,000 unit

Material cost/unit $15 $20

Molding time/batch 5 hours 7.5 hours

Batch size 100 units 50 units

Activity Based Rate= Cost per Unit of Cost Driver

Activity Cost driver Cost Rate

Molding 2,000 $150,000 $150,000 / 2,000 = 75

Inspection 150 $75,000 $75,000/150 = 500

Production 20 $125,000 $125,000/20= 6250

Total $ 350,000

Cost Drivers Consumed

Activity A999 B999

Molding time/batch 5 hours* 10 7.5 hours *40

50 300

Batch size 1,000 unit/ 100 units 2,000 unit/50 units

= 10 =40

ABC Profits for Each Contract

A999 B999

Selling Price $27,000 $100,000

Materials 15*1000 20 * 2000

= 15000 = 40,000

Molding 50 hours *75 300* 75

3750 22500

Inspection 10 batches *500 40 batches *500

$ 5000 $ 20000

Management Contracts $ 6250 $ 6250

Total $ 30,000 $ 88,750

Profit $ (3000) $ 11250

Overhead Rate Absorption Costing

Total Overheads= ( 150,000 + 125,000+ 75000) = $ 350000

Annual Molding Hours = 2000

Rate= $ 350,000/2000=$ 175 per molding hour

Absorption Costing

Profit For each Contract

A999 B999

Selling Price $27,000 $100,000

Materials 15*1000 20 * 2000

= 15000 = 40,000

Overheads 50 hours *175 300 Hours *175

= 8750 = 52,500

Total Cost 23750 92500

Profit 3250 7500

The contract A yields a loss under ABC but Contract B yields a profit.

Under absorption costing both contract yield profits.

Management should make decisions using ABC and reject Contract A and accept Contract B.

3 0

2 years ago

Records at Hal’s Accounting Services show the following costs for year 1. Direct materials and supplies $ 40,000 Employee costs

ruslelena [56]

Answer:

See answers below

Explanation:

a. Direct materials & supplies $40,000 = $40,000 × 110%

= $44,000 × 20,000/25,000

= $35,200

Employee costs = $2,900,000 × 105%

= $3,045,000 × 20,000/25,000

= $2,346,000

Variable overhead = $600,000 × 100%

= $600,000 × 20,000/25000

= $480,000

Fixed overhead = $700,000 × 105%

= $735,000

b. Total costs per unit year 2 =

$3,596,000 / 20,000

= $179.81

6 0

2 years ago

Mel’s Meals 2 Go purchases cookies that it includes in the 10,000 box lunches it prepares and sells annually. Mel’s kitchen and

Irina18 [472]

Answer:

Current Operation (purchase of cookies) - $0.60

Alternative - $0.2 materials

$0.15 direct labor

$0.45 without increasing capacity of which $0.3 is fixed - meaning it would still be incurred at current capacity

Mel's Meals Evaluation of Alternatives

Purchase Produce

$ $

Cost to Buy 0.6 -

Materials - 0.2

Direct Labor - 0.15

Overhead (Variable) - 0.15

Total Cost 0.6 0.5

Decision: Mel should not continue buying them as she would be saving $0.1 for every lunch meal.

Since there would not be an increase in the total fixed overhead if Mel's makes the cookies in-house, then the $0.3 fixed overhead is not significant in calculating the cost of producing.

Explanation:

The differential cost in this instance is $0.1 as Mel's saves that for every cookie made which multiplied by the number included in the box and by the total box prepared and sold gives = 0.1 * 2 * 10000 = $2,000 saved for making

5 0

2 years ago

Read 2 more answers

In 2019, if Lisa Monroe decides that the market uncertainty for Seymour Semiconductors has reduced considerably while the high t

faust18 [17]

The correct answer is C) grow.

Lisa Monroe's mandate that called for the company's future manufacturing plants to be built with the ability to add capacity at low cost gives Seymour Semiconductors the option to grow.

That is why Lisa Monroe, as the new CEO of the company, wants some innovative changes for the company to adapt to modern times, different consumers' necessities, and the fierce competition of other companies in the industry.

She made the decision to change the strategical approach of Seymour Semiconductors. She has decided to lay off 1,000 employees. She has opted to hire temporary workers. With those decisions, she considers that the company will be able to grow again.

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2 years ago

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Harrington makes all sales on account, subject to the following collection pattern: 30% are collected in the month of sale; 60%

GuDViN [60]

Answer:

Cash Collection is $122,000

Receivable as on August 31, is $97,000

Explanation:

Total budgeted cash collection in the month of August is $122,000 and total receivables as on August 31 is $97,000.

A schedule for the cash collection is made in MS Excel file, which is attached with this answer, please find it.

Download xlsx