Fanning Modems can make an informed decision about the profitability and viability of entering the security token market by considering the total costs, including unit-level manufacturing costs, sales commissions, and allocated facility-level costs.
Fanning Modems is considering producing and selling security tokens alongside its existing product, modems. To assess the feasibility of this venture, the company has estimated the unit-level manufacturing costs and sales commissions for the security tokens.
The manufacturing cost per unit is projected to be $25.00, while the sales commission will be set at $1.50 per unit.
However, the facility-level costs, which include depreciation on manufacturing equipment, rent on the manufacturing facility, depreciation on administrative equipment, and other fixed administrative expenses, will not be affected by the production of security tokens. These costs amount to $194,250 ($62,500 + $52,500 + $14,500 + $64,750).
To allocate these facility-level costs between the existing product and the new product, Fanning Modems has decided to base the allocation on the number of units produced.
With 5,000 modems and 1,000 security tokens, the existing product accounts for 83.3% of the total production (5,000 / (5,000 + 1,000)) while the new product accounts for 16.7% (1,000 / (5,000 + 1,000)).
Given this allocation, 83.3% of the facility-level costs will be assigned to modems ($161,433.33) and 16.7% to security tokens ($32,816.67).
This cost allocation approach enables Fanning Modems to consider the total costs involved in producing and selling security tokens, which includes unit-level manufacturing costs, sales commissions, and a share of the facility-level costs.
By evaluating these costs against potential revenues from the sale of security tokens, the company can make an informed decision regarding the profitability and viability of entering the security token market.
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You are offered a 30-year annuity of $30,000 annual payments. However, the annuity begins in 5 years (you will not receive any payments for 5 years, but will then receive $30,000 at the end of each year for 30 years with the first payment arriving exactly 5 years from today). If the discount rate is 5 percent per year (compounded annually), what is the current value of the annuity? (10 points, rounded to 2 decimals. Please do not enter the dollar sign "\$.")
The current value of the 30-year annuity with $30,000 annual payments starting in 5 years is $40,681.80.
The current value of the annuity can be calculated using the formula for the present value of an annuity. The formula is:
PV = PMT × (1 -\((1 + r)^-^n\)) / r
Where:
- PV is the present value of the annuity
- PMT is the annual payment amount ($30,000 in this case)
- r is the discount rate (5% or 0.05 in this case)
- n is the number of years (30 years in this case)
To calculate the present value, plug in the values into the formula:
PV = 30000 × (1 - \((1 + 0.05)^-^3^0\)) / 0.05
Simplifying the equation:
PV = 30000 × (1 - \(1.05^-^3^0\)) / 0.05
PV = 30000 × (1 - 0.32197) / 0.05
PV = 30000 × 0.67803 / 0.05
PV = 40681.80
Therefore, the current value of the annuity is $40,681.80.
In summary, using the formula for the present value of an annuity, we find that the current value of the 30-year annuity with $30,000 annual payments starting in 5 years is $40,681.80.
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Mc qu. 36 qingyi works for a large technology. Qingyi works for a large technology company as an engineer. As an employee, why should he look at his company's financial statements?
Although not directly involved in finance, understanding the financial statements can benefit Qingyi by providing job security, insight into company strategy, and making him a more well-rounded employee.
As an engineer working for a large technology company, Qingyi may not necessarily be directly involved in the financial aspects of the business. However, it is still important for him to have a basic understanding of the company's financial statements for several reasons.
Firstly, understanding the company's financial health can give Qingyi a sense of job security. If the company is struggling financially, it may be at risk of layoffs or other cost-cutting measures that could impact its role or department. By keeping an eye on the financial statements, Qingyi can be better prepared for any potential changes or shifts in the company's priorities.
Additionally, being familiar with the financial statements can help Qingyi understand the company's overall strategy and direction. For example, if the company is investing heavily in research and development, he may have a better understanding of the types of projects his team will be working on in the future.
Finally, having a basic understanding of financial statements can make Qingyi a more well-rounded employee. He may be better equipped to collaborate with colleagues in other departments, such as finance or accounting, and be able to contribute to discussions about the company's overall performance and goals.
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preston toy co. has warrants outstanding that allow the holder to purchase a share of stock for $20 (exercise price). the common stock is currently selling for $26, while the warrant is selling for $9.45 per share. a. what is the intrinsic (minimum) value of this warrant?
The intrinsic (minimum) value of this warrant is $6 per share.
What is the intrinsic (minimum) value?The intrinsic value of a warrant refers to the difference between the exercise price and the current stock price.
Given that:
The exercise price is $20
The stock price is $26.
So, the intrinsic value of the warrant will be:
= Exercise price - Current stock price
= $26 - $20
= $6 per share
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which statement best summarizes the economic theories of adam smith
Answer: Economies work best when government leave businesses alone.
Explanation:
The local alpaca rancher begins year 1 with 80 animals. She acquires 4 additional animals each year, and each year 10% (rounded to the nearest integer) of the alpacas present at the beginning of the year are stolen by rustlers. For example, in a year where there are 73 animals at the beginning of the year, 7 would be abducted at the end of the year. The rancher needs to know how many alpacas she will have at the end of year 10. The spreadsheet she employs can be found below. In cell E6 the first cell address referred to was cell C6. If the formula is entered in cell E6 and is copied down through E7:E15, what completes the formula
The correct answer to the following question will be "B9:B18-ROUND(0.1*B9:B18,0) +C9:C18".
What is spreadsheet?A spreadsheet is a software program for organizing, calculating, and storing data in tabular form. Spreadsheets were created as digital counterparts to traditional paper accounting spreadsheets. Data entered into table cells is what the application uses to operate. Each cell may include text, numeric data, or formula results that calculate and display values according to the contents of neighboring cells. One such electronic record may also be referred to as a spreadsheet. Users of spreadsheets can change any fixed amount and watch the changes in calculated values. This enables quick investigation of numerous scenarios without the need for manual recalculation, making the spreadsheet helpful for "what-if" study. Multiple sheets can interact in modern spreadsheet software, which can also show data as text or numbers.
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"B9:B18-ROUND(0.1*B9:B18,0) +C9:C18" will be the right response to the following query.
What is a spreadsheet?A spreadsheet is a piece of software used for tabular data organization, calculation, and storage. Spreadsheets were developed as electronic replacements for the old-fashioned paper accounting spreadsheets. The programme runs on data entered into table cells. Text, numerical information, or formula results that compute and display values based on the contents of nearby cells may all be included in a cell. An example of one such electronic record is a spreadsheet. Spreadsheet users may alter any fixed quantity and observe how the computed numbers change. The spreadsheet is useful for "what-if" analysis since it permits speedy exploration of several situations without the need for manual recalculation.
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The owner of a successful restaurant has gotten bored with his business. He
decides to sell it and use the money to start a food truck in a new city.
This situation is an example of which characteristic of the U.S. economy?
O A. Limiting the role of government
O B. Motivating businesses to maximize profits
O C. Prioritizing individual freedom
O D. Promoting competition
Answer:
my best guess would be C.
The owner of a successful restaurant has gotten bored with his business. He decides to sell it and use the money to start a food truck in a new city.
This situation is an example of the characteristic of the U.S. economy that motivates businesses to maximize profits. (B)
What is a business?
Business is the activity of making one's living or making money by producing or buying and selling products
What is the U.S. economy?The U.S. has a mixed economy, exhibiting characteristics of both capitalism and socialism. Such a mixed economy embraces the free market when it comes to capital use, but it also allows for government intervention for the public good.
What is a profit?Profit, in accounting, is an income distributed to the owner in a profitable market production process.
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What aspect of marketing contains, protects, displays, increases the utility, and promotes a product, as well as conveying the product and brand messages?.
Packaging is a subset of advertising the place a manufacturer designs and develops the wrapper or container to aid its transport, handling, delivery, and communicate the manufacturer and product records by making it seem to be attractive.
To facilitate safety and resource product storage and transportation.
What is the significance of packaging in marketing?Packaging is so an awful lot extra than simply protecting a product. It's an necessary advertising tool, which helps branding, emphasizes the product's great aspects and creates an unforgettable experience for the customer. It's a gateway that can increase your product – and enterprise – to the subsequent level.
With the increasing demand for packaging, many businesses have started discovering methods and methods to sell their products thru higher designing and packaging.
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https://brainly.com/question/27992495#SPJ4If you work for a company and have a 401(k) retirement account, the account contains money you contributed to your retirement and money contributed by your employer. When you retire, which of the following will these payments be?
A. Welfare payments
B. Pension
C. Transfer payments
D. None of the above
Who can provide me some examples of businesses?
Answer:
hi!
Explanation:
you should plan out your bisnuse ! and get your invitory try making cards hope this helps!
Fill in the blank: The _________ can help you develop a mission statement that connects with your audience. persona creation process Golden Circle Inbound Methodology buyer's journey Next Feedback about Favorites
Answer:
Golden Circle
Explanation:
-Persona creation process is the process to generate a representation of a specific customer that will use your product.
-Golden Circle is a model that helps companies to find the best form to provide value to their customers and differentiate from the competition.
-Inbound Methodology is a process that organizations use to turn leads into customers.
-Buyer's journey is a process that includes all the stages that a customer pass through from realizing the need to making a purchasing.
According to this, the answer is that the Golden Circle can help you develop a mission statement that connects with your audience because it can help you to develop a message that would attract your target customer and get a position in their mind.
Kyle failed to make his payment by the first of this month. Kyle’s monthly payment is currently $1,200. If Kyle decides to split the missing payment into two parts and pay it over the next two months, which of the following statements is false? a. Kyle will be reported to a credit agency. B. Kyle will be charged a $75 late fee for the missing payment. C. Kyle has one business week to inform his bank of the late payment. D. Kyle’s monthly payments for the next two months will remain $1,200.
Based on the fact that he missed his monthly payment, it is false to say that D. Kyle’s monthly payments for the next two months will remain $1,200.
What happens when Kyle misses payment?He will be reported for this default to a credit agency. He will incur penalties which will be added to future payments.This means that his payments in the next two months will not be the same as the current month of $1,200 but will rather increase based on the penalty charged.
In conclusion, option D is correct.
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Answer:
D
Explanation:
What are the eight differences between personal selling (direct contact) and non-personal selling (indirect contact, such as Internet sales)?
Answer:
see below
Explanation:
Personal selling is popularly known as a face to face selling or direct selling. In personal selling, the salesperson engages a potential customer in a conversation to persuade them to buy. This type of selling requires the physical presence of a salesperson engaging in a one-on-one conversation with the clients. Its success largely depends on the selling skills of the salesperson.
Non-personal selling is the use of advertisements to persuade customers to buy. There is no direct meeting between the seller and buyer; hence the term indirect, impersonal, or non-personal selling. Non-personal selling uses print media, broadcast media, and digital platforms to reach out to customers.
Describe the use of testing and training samples to validate models. What is the logic for this approach – why is out-of-sample fit so important? What specific measure(s) can a business analyst use to assess out-of-sample fit?
The use of testing and training samples is crucial to validate models. Training samples are used to train the model, while testing samples are used to evaluate its performance.
Out-of-sample fit is important because it assesses how well the model generalizes to unseen data, indicating its ability to make accurate predictions in the real world. The logic behind this approach is that a model that performs well on training data but fails to generalize to new, unseen data may suffer from overfitting, where it has learned the specific patterns of the training data too well and cannot adapt to new situations. Out-of-sample fit helps detect such issues and ensures that the model's performance is not biased towards the training data. To assess out-of-sample fit, business analysts can use various measures such as accuracy, precision, recall, F1 score, or area under the receiver operating characteristic curve (AUC-ROC). These metrics provide insights into the model's predictive power and its ability to correctly classify or estimate outcomes on new, unseen data, which is crucial for effective decision-making and real-world application.
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does anyone know any good spells
Answer:
abra cadabra
Explanation:
Why does this occur?
This has to be asked in context.
there is a price ceiling below the equilibrium price. the new equilibrium quantity sold in this market is:
The new equilibrium quantity sold with a price ceiling below the equilibrium price will be lower than the original equilibrium quantity.
How price ceiling below the equilibrium price in a market affect the quantity demanded and supplied?If there is a price ceiling below the equilibrium price in a market, it means that the government has mandated a maximum price that sellers can charge for the good or service, and this price is below the market-clearing equilibrium price.
At the price ceiling, the quantity demanded by buyers will exceed the quantity supplied by sellers, leading to excess demand or a shortage. Buyers will want to buy more of the good or service than sellers are willing to sell at that price.
In the short term, this shortage may be resolved through non-price mechanisms such as rationing or queuing. However, in the long run, sellers may be discouraged from producing and selling the good or service due to the lower price they can charge, leading to a decrease in the quantity supplied and a further shortage.
The exact magnitude of the decrease in quantity sold will depend on the specifics of the market and the extent of the price ceiling.
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Betsy owned a speedboat that was not operating correctly. She hired Gail, a mechanic, to determine what needed to be repaired or replaced on the boat. Gail concluded that the boat needed over $5,000 of work to run safely. Upset by the news, Betsy decided to get a second opinion from Kathy, another mechanic. Kathy advised Betsy that the boat only needed a new fuel pump, which cost considerably less than $5,000. Betsy decides to sell her boat instead of repairing it. When a prospective buyer asks Betsy whether the boat has been inspected by a mechanic, she will:_________.
Answer:
Betsy should simply tell the truth: that the boat was actually inspected by two mechanics, but not only it was not repaired, but both mechanics had a very different diagnosis about what was wrong with the boat.
She should also warn the buyer that the boat likely needs at least a new fuel pump, and in case the diagnostic of the first mechanic (Gail) is true, the boat then would likely need an expensive repair.
to maximize economic surplus, keep increasing output as long as
Answer:Therefore, total surplus is maximized when the price equals the market equilibrium price. In competitive markets, only the most efficient producers will be able to produce a product for less than the market price. Hence, only those sellers will produce a product
Explanation: i no it
For augment economic surplus, continue to increment yield insofar as total surplus is expanded when the cost rises to the market harmony cost.
What is Economic Surplus?Economic surplus is determined by consolidating the surplus advantage that is capable by the two purchasers and makers in an economic exchange.
Surplus relates to products as well as to monetary components, like benefit, income, and capital. Albeit this probably won't give off an impression of being an issue, something like benefit surpluses prompts expanded charge rates, and that additional duty cash might have been contributed somewhere else.
A surplus of capital focuses to the way that the financial backer, entrepreneur, or pioneer put a lot of cash into the organization or task, considering squandered money to be a normal outcome. In economics, the idea of surplus is generally found in the term spending plan surplus. This ordinarily alludes to situations where state run administrations have supported all their set projects and have cash left over subsequently.
Therefore economies actually take a stab at an economic surplus because of the conviction that overflow is superior to shortage.
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HELP ASAP! PLEASE!
1.Why were Madame C. J. Walker’s accomplishments so impressive?
2.What is the advantage of having a mentor?
3.Why might it be better to wait until you have your license to purchase cosmetology supplies?
4.What factor should be the first priority in storing chemicals that cosmetologists use when performing services?
5.List three elements that should be part of a marketing plan.
Answer:
1. Walkers acomplishments were very impressive because of the ineqaulity she had during her time off work.
2. Having a mentor can mean that you have somone who made mistakes that can better you into not making the same mistakes.
3. It would be better to have your license so you can prove that you are legally qaulified to work at a salon.
4. Somewhere that the consumers can see the products.
5. Budget, advertisement, positioning
Explanation:
Madame C. J. Walker’s accomplishments so impressive as the inequity she experienced during her time off work, Walker's accomplishments were particularly outstanding.
What is a marketing plan?A marketing plan is defined as the company's strategy for selling its product or service through advertising.
The marketing plan will aid in determining who the target market is, how to best contact them, what price point the product or service should be sold at, and how the organization will track its progress.
The Madame C. J. Walker’s accomplishments so impressive because of the inequity she experienced during her time off work, Walker's accomplishments were particularly outstanding.Having a mentor can mean having someone who has made mistakes and can help you avoid making the same ones.Having the license will allow the person to demonstrate that the person is legally qualified to work in a salon.The factor should be the first priority in storing chemicals that cosmetologists use when performing services is a location where customers may see the merchandise.The three elements that should be part of a marketing plan are the Budget, promotion, and positioning.Learn more about the marketing plan, refer to:
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what is barry’s and melissas gross earnings ?
Answer:
Barry earns $315.00
Melisa earns $120.00
Explanation:
Barry earns $9 per hour.
He works for 35 hours this week.
Gross income will be
=number of hours worked x hourly pay
=35 x $9
=$315
Barry earns $315
Melisa earns a 5% on sales
Sales for last week were $2400
Her earnings will be
=5% of $2400
=5/100 x 2400
=0.05 x 2400
=$120.00
Melisa earns $120.00
Write any 4 points regarding the nature of target customers, which in the present times has led to the growing importance of ‘Persuasive function of Promotion'? MARKETING
Answer:
A target customer profile is simply a specific group of customers most likely to respond positively to your promotions, products, and services. 4 points regarding the nature of target customers:
What kind of people we’re looking?Where to find them?What our customers want from our brand, to adapt our value proposition so that our brand is relevant to a specific need or problem?How they compare and choose products to adjust marketing campaigns to make our offering seem the most compelling?Digital marketing has led to the growing importance of ‘Persuasive function of Promotion' because customers can learn about promotions from home and even compare the campaigns.
Explanation:
Persuading function of Promotion is to motivate customers to buy products under promotion due to intense competition among different industries producing similar types of products.
Gwen Osterhaus and Portia Juarez have formed a partnership to open a garden coffee cafe in Central Park. Gwen invest $23,000 and Portia invests $31,000. They get a micro loan from the Small Business Administration for $18,500. They have $9,000 of credit from the Bean Machine Company that sold them some of their equipment. Calculate the total amount of start-up financing available to the partnership. Make a pie chart that shows the percentage of total financing that is provided from each source. How much of the financing is owner supplied and how much is borrowed?
Based on the information given, the financing that's owner supplied will be $54000 while the ones that's borrowed will be $27500.
The total amount of start-up financing that's available to the partnership will be:
Amount invested by Gwen = $23,000
Amount invested by Portia = $31,000.
Micro loan from the Small Business Administration = $18,500
Credit from the Bean Machine = $9,000
Total amount = $81500
The percentage provided by each source will be:
Gwen = 23,000 / 81500 = 28.22%
Portia = 31,000 / 81500 = 38.04%
Micro loan from the Small Business Administration = 18,500 / 81500 = 22.70%
Bean Machine = 9,000/ 81500 = 11.04%
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Using the information from question 15 along with the following: The employer payroll taxes for Cowboy Company include FICA taxes, federal unemployment taxes of 0.6% of the first $7,000 paid each employee, and state unemployment taxes of 5.4% of the first $7,000 paid to each employee. Prepare the journal entry to record the employer's payroll taxes at January 31 for Cowboy Company. (Assume that none of the employees have reached the unemployment limit of $7,000.) Prepare the journal entry to record the employer's payroll taxes at January 31 for Cowboy Company. (Assume that none of the employees have reached the unemployment limit of $7,000.)
The journal entry would include debiting Payroll Tax Expense and crediting FICA Taxes Payable, Federal Unemployment Taxes Payable, and State Unemployment Taxes Payable accounts, with specific amounts depending on the applicable payroll and tax rates.
What is the journal entry to record the employer's payroll taxes at January 31 for Cowboy Company?To record the employer's payroll taxes at January 31 for Cowboy Company, the following journal entry would be prepared:
Date: January 31
Account Debit Credit
Payroll Tax Expense - X
FICA Taxes Payable X -
Federal Unemployment Taxes Payable X -
State Unemployment Taxes Payable X -
1. Payroll Tax Expense (debit): This account is debited with the total amount of employer's payroll taxes, including FICA taxes, federal unemployment taxes, and state unemployment taxes.
The specific amounts will vary based on the payroll and tax rates applicable.
2. FICA Taxes Payable (credit): This account is credited with the amount of FICA taxes owed by the employer based on the employees' wages and the FICA tax rate.
3. Federal Unemployment Taxes Payable (credit): This account is credited with the amount of federal unemployment taxes owed by the employer, calculated as 0.6% of the first $7,000 paid to each employee.
4. State Unemployment Taxes Payable (credit): This account is credited with the amount of state unemployment taxes owed by the employer, calculated as 5.4% of the first $7,000 paid to each employee.
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8. Many people consider knowledge to be a fifth factor of production.
While land, labor, capital, and entrepreneurship are traditionally considered the four factors of production, some economists argue that knowledge should be added as a fifth factor.
Knowledge plays a crucial role in the modern economy, particularly in sectors such as technology, healthcare, and education. It enables individuals and organizations to innovate, adapt, and improve their productivity and efficiency.
Therefore, investing in knowledge creation and dissemination can lead to significant economic growth and development.The concept of knowledge as a factor of production was first proposed by economist Fritz Machlup in the 1960s. Machlup argued that knowledge is a non-rival and non-excludable resource that can be used by multiple individuals and organizations simultaneously. He believed that the production and distribution of knowledge should be treated as a distinct economic activity and emphasized the importance of investing in education and research to promote economic growth.
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Francis has an internship at a law firm, takes an art class, and researches colleges that offer majors in veterinary science. Which of these actions increases Francis's human capital?
A.
both the internship and the research
B.
only the internship
C.
both the internship and the art class
D.
only the research
Answer: C. both the internship and the art class
Explanation:
Human capital simply means the economic value of the skills and the experience of a worker. Human capital includes the training, health, skills, education, of workers.
From the question, Francis human capital will be both the internship and the art class as they will provide him with the needed experiences. Therefore this is a form of human capital.
delta corporation has a bond issue outstanding with a 7% coupon, semiannual payments, and 4 years remaining until maturity. the par value of the bond is $1,000. determine the current value of the bond if present market conditions justify a 14% nominal annual required rate of return.
The current value of the bond if present market conditions justify the given rate of return is $760.81
How to find the current value of the bond ?To calculate the current value of the bond, we need to find the present value of the coupon payments and the present value of the par value.
First, let's find the present value of the coupon payments.
PV coupon = Coupon payment * (1 - (1 + r)^-n) / r
PV coupon = $35 x (1 - (1 + 0.07)^-8) / 0.07
PV coupon = $178.80
Next, we need to find the present value of the par value, which will be received at the end of the 8th period:
PV par = Par value / (1 + r)^n
PV par = $1,000 / (1 + 0.07)^8
PV par = $582.01
Finally, we can find the current value of the bond by adding the present values of the coupon payments and the par value:
Current value = PV coupon + PV par
Current value = $178.80 + $582.01
Current value = $760.81
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Match the job titles with career clusters executive secretary survey researcher Storage and distribution manager loan officer cargo and freight agent general manager
Answer:
Accountant - Finance
Survey Researcher - Science, Technology, Engineering and Mathematics
Loan Officer - Finance
Cargo and Freight Agent - Transportation, Distribution and Logistics
General Manager - Business Management and Administration
Executive Secretary - Business Management and Administration
Storage and Distribution Manager - Transportation Distribution and Logistics
Purchasing Agent - Manufacturing
Explanation: i took the test and got 100
Matching the job titles with career clusters are Executive Secretary in Business Management and Administration, Survey Researcher in Science, Technology, Engineering and Mathematics.
What are career clusters?Career Clusters provide students with a context for studying traditional academics and learning the skills specific to a career, and provide U.S. schools with a structure for organizing or restructuring curriculum offerings and focusing class make-up by a common theme such as interest.
In the U.S. Department of Education model, 17 Career Clusters link to 70+ more specific Career Pathways each having its knowledge and skills requirements. Within the 70+ career pathways, 1800 Career Specialties are defined. The structure has evolved and may vary by state. Matching more job titles with career clusters are Storage and Distribution Manager - Transportation Distribution and Logistics, Loan Officer Finance, and Cargo and Freight Agent - Transportation.
Further, Distribution and Logistics, General Manager - Business Management and Administration.
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which of these is not a social or economic goal of the US economy
What are the social or economic goals? Is there options?
Edit: The answer is A
Answer:
A
Explanation:
How should you dress for a phone interview? (Site 1)
online content
Answer:
You should at least have a nice top on because only the camera will see that. If you are a girl you could just wear a dress, probably a black one because that is what I wore to my interview yesterday because there is no pattern or anything it's just a plain black one, but that was in person. if you're a guy you need to wear a suit and tie,but you could probably just wear shorts because they won't see the bottom half of you
Explanation:
I hope this helps out a little bit :-)
An interview is a formal process by which an employee is assessed for his/her performance by the employer.
For a phone interview, one should be dressed properly as the interviewer can see you through the camera.
For a girl, you should be dressed nicely and no revealing or extra shiny clothes should be wore.
In the case of a man, one should be properly dressed in suits or formal shirts.
Try to wear dark black or blue coloured clothes and sit in a properly lighted area.
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If sales are $440,000, variable costs are 75% of sales, and operating income is $40,000, what is the operating leverage?
a. 2.500
b. 1.333
c. 1.875
d. 2.75
The operating leverage is 2.75 (option d).If sales are $440,000, variable costs are 75% of sales, and operating income is $40,000.
To calculate the operating leverage, we need to use the following formula:
Operating Leverage = Contribution Margin / Operating Income
First, we need to calculate the contribution margin, which is the sales revenue minus variable costs.
Contribution Margin = Sales - Variable Costs
Given:
Sales = $440,000
Variable Costs = 75% of Sales = 0.75 * $440,000
Contribution Margin = $440,000 - (0.75 * $440,000)
Contribution Margin = $440,000 - $330,000 = $110,000
Now, we can calculate the operating leverage using the formula:
Operating Leverage = Contribution Margin / Operating Income
Operating Leverage = $110,000 / $40,000
Operating Leverage = 2.75.
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