Vaughn Company manufactures equipment. Vaughn’s products range from simple automated machinery to complex systems containing numerous components. Unit selling prices range from $200,000 to $1,500,000 and are quoted inclusive of installation. The installation process does not involve changes to the features of the equipment and does not require proprietary information about the equipment in order for the installed equipment to perform to specifications. Vaughn has the following arrangement with Winkerbean Inc.
Winkerbean purchases equipment from Vaughn for a price of $920,000 and contracts with Vaughn to install the equipment. Vaughn charges the same price for the equipment irrespective of whether it does the installation or not. The cost of the equipment is $644,000.
Winkerbean is obligated to pay Vaughn the $920,000 upon the delivery and installation of the equipment. Vaughn delivers the equipment on June 1, 2020, and completes the installation of the equipment on September 30, 2020. The equipment has a useful life of 10 years. Assume that the equipment and the installation are two distinct performance obligations which should be accounted for separately.
Assuming Vaughn does not have market data with which to determine the standalone selling price of the installation services. As a result, an expected cost plus margin approach is used. The cost of installation is $35,700; Vaughn prices these services with a 30% margin relative to cost.
How should the transaction price of $920,000 be allocated among the service obligations?
Equipment $
Installation $

Answers

Answer 1

Answer: See explanation

Explanation:

The transaction price of $920,000 should be allocated among the service obligations as thus:

For Equipment:

= Fair value of equipment / Total fair value × Transaction price

= (920000 / (920000 + 276000) × 920000

= (920000 / 1196000) × 920000

= $707692

Installation:

= Fair value of installation / Total fair value × Transaction price

= 276000 / (920000 + 276000) × 920000

= (276000 / 1196000) × 920000

= $212308


Related Questions

The first step in conducting an STP analysis is

A)

dividing the marketplace into subgroups.

B)

repositioning existing segments.

C)

generating a sum of segments.

D)

targeting potential segments.

Answers

Conducting an STP begins with segmenting the market into subgroups. To categorize your clients into groups of people with similar traits and wants, utilize market segmentation. As a result, choice (A) is the right response.

What is STP?

A marketing strategy known as segmentation, targeting, and positioning (STP) rethinks how and to whom you should advertise your goods. It improves the emphasis, relevance, and personalization of your marketing communications for your target audience.

When designing marketing communications plans, the STP model is helpful since it enables marketers to prioritize ideas before developing and delivering individualized and pertinent messages to engage with various audiences. Market segmentation, market targeting, and positioning strategy make up the three steps of the funnel.

Hence, Option (A) is accurate.

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Alex wrote the sentence: The big dog was really fat. He ate a lot. Why does Alex need a thesaurus? a. The sentences begin with the same word c. The sentences lack creativity b. Many words are repeated d. None of these

Answers

Answer:C

Explanation:

The sentences lack creativity does Alex need a thesaurus. Hence, option C is correct.

What is lack creativity?

The main causes of a lack of creativity are typically overwhelm, the wrong approach, or overwhelming input. It's a straightforward problem to fix. Years ago, I struggled with writer's block. I wanted to create a book, but I was at a loss for good topics.

A lack of creativity or imagination as a trait. dullness, lack of creativity, unoriginality, and commonplaceness.

One of the reasons people don't feel motivated is because they believe innovation is a zero-sum game. They believe, "Never could I accomplish it! That is something I could never come up with as great! "when they notice somebody like Steve Jobs in the news or Einstein in the history books.

Thus, option C is correct.

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1. Deirdre has one hour this afternoon in which she can either practice the piano for the upcoming school concert, work at
the library for $7 per hour, or babysit her neighbor's son for $10 per hour. Deirdre chooses to practice the piano, but
if she hadn't chosen to practice the piano, she would have chosen to babysit over working at the library. What is the
opportunity cost of Deirdre's decisions
A. The value gained from practicing the piano for an hour.
B. The value of babysitting her neighbor's son for an hour.
C. The value of working at the library for an hour.
D. The value of babysitting her neighbor's son and working at the library for an hour.

Answers

Answer:

The correct answer is B) The value of taking care of her neighbours son for 60 minutes.

Explanation:

Opportunity Cost belongs more in the parlance of microeconomics and is used to describe the idea that one cannot have everything all the time. There are alternative ends competing for limited means. In order words, when we decide to take a course of action, in the hope of achieving a thing or getting a reward, there is always another benefit forgone.

So knowing that there is an opportunity that was foregone helps the microeconomist to think carefully about what they want to achieve using the limited resources at their disposal.

Further simplified, if I have $5 dollars to spend, and that amount can purchase either a cupcake or a cup of ice cream, the one I chose to buy becomes the opportunity taken, whilst the alternative forgone is the opportunity cost.

Therefore, the cost of an item is not just the amount of money for which it was purchased, but all other alternatives with which the same amount could have been purchased.

In the question above, Deidre would have chosen to babysit her neighbor's son. That to her is the next best use of her time, and therefore the opportunity cost. According to the question, she wouldn't have worked in the library even if she had nothing else to do. Hence, that does not pass as opportunity cost.

Opportunity cost must be an alternative choice and is very subjective.

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pls help!!! will give brainly!!!!

Carlita studied mechanics in school and has a background in sales. What company in the Transportation and Logistics cluster might be interested in hiring Carlita?
a large port looking for a logistical engineer
a company that makes and sells railway cars looking for a representative
a government agency in need of a safety inspector
a shipping company looking for a warehouse manager

Answers

Answer:

Warehouse manager

Explanation:

Answer:

A company that makes and sells railway cars looking for a representative

Explanation:

Carlita has a background for sales, and she also studies mechanics. The company makes and sells railway cars, just like Carlita.

Question 1 of 10
A. is a measure of change in the prices of goods from one period to
another
A. sanction
B. quota
оо O
C. price index
D. subsidy
SUBMIT

Answers

Price index is a measure of change in the prices of goods from one period to another. Thus, the correct option is C). price index

What is the significance of price index?

Price Index refers to the index number that expresses the different level of price of the product in respect to the level of the prices of the same commodities during a base period that is chosen casually and specify the prices level in different period of time.

Price index is used to indicate changes in the level of prices from one period to another. It is a corresponding average of price relatives for a given category of goods or services in a given range, during a given period of time.

The percentage change in the price index and level from one period to another is determined by the inflation.

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A student receives a subsidized student loan for $10,000 with a 10-year repayment term and interest compounded monthly. Six months after she graduates from college, she will have to begin making payments. Find her monthly payment and total interest paid if the interest rate is 5.5%.

Answers

The monthly payment and total interest paid if the interest rate is 5.5% would be $2.439

Given,

A subsidized student loan - $10,000

Repayment term - 10 year

Interest rate - 5.5%

Firstly, we have to calculate the future value (FV) of the loan in 6 months as follows:

FV in 6 months = Loan amount * (1 + Interest rate)^6 = $10,000 * (1 + 0.055)^6 = $2.7680

Secondly, the monthly payment is calculated by using the formula for calculating the future value:

M = FV in 6 months / ((((1 + r)^n) – 1) / r) ....................... (1)

Substitute all relevant values into equation (1), we have:

M = $2.7680 / ((((1 + 0.00466666666666667)^144) – 1) / 0.00466666666666667)

M = $2.439

Hence, the monthly payment and total interest paid if the interest rate is 5.5% would be $2.439

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In which of these do homeowners own BOTH the home and the
land it sits on?

cooperative
timeshare
condominium
townhouse

Answers

Answer:

time share is the answer or townhous

Ethiopia's incomes and expenditures are as follows (in billion bire) in 2009
Wages

at what approach 100

Social security contributions
7
Interest income
5
Personal taxes
20
Consumption expenditure by households
60
Government purchases of goods and services
150
50
Transfer payments
100
Corporate profit
30
Investment expenditures by business
20
Corporate Income taxes
50
Indirect business taxes
Undistributed corporate profit
90
Consumption of fixed capital( depreciation)
40
Non income charges
65
Expenditures by foreigners
25
Net foreign factor income earned domestically
25


a. Using expenditure approach, what is GDP?

Answers

The GDP of Ethiopia using the expenditure approach in 2009 was 205 billion bire.

What is Ethiopia's GDP?

By adding up all of the expenditures on finished goods and services produced domestically, we may compute the GDP using the expenditure method. The following formula is used to determine GDP when utilizing the spending method:

GDP = C + I + G + (X - M)

where:

C = Consumption expenditure by households

I = Investment expenditures by business

G = Government purchases of goods and services

X = Expenditures by foreigners on domestically produced goods and services

M = Expenditures by domestic residents on foreign-produced goods and services

Using the given values for Ethiopia's incomes and expenditures in 2009, we can further input the values to calculate the GDP as;

GDP = C + I + G + (X - M)

= 60 + 20 + 150 + (25 - 25)

= 205 billion bire

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(01.06 LC)
When price increases, quantity supplied (5 points)
stays the same
decreases
increases
becomes zero?

Answers

Depends on inflation but usually they stay the same

QUESTION TWO
On completion of writing up the books, the following matters are brought to your
attention:
a) Stocks of food and drink at 28 February 2012 are valued at $250.
b) Mr. Shah owes a waiter $20 in respect of overtime worked in week 4.
c) The rates payments cover the period 1 February to 30 April
d) Electricity consumed in the month is estimated to be. $100.
e) Being a prudent man, Mr. shah instructs you to create a provision for doubtful
debts of 4% of debtors.
f) It is decided to write off fixtures and fittings by equal installments over 10 years.
You are required to:
1) Adjust the books for the above
2) Prepare the restaurant's trading and profit and loss account for the first month
and a balance sheet as at 28 February 2001

Answers

Explanation:

it's tedious. I need help on this question. it looks like an incomplete question

Why is it important to understand the advantages and disadvantages of different ways to pay for
expenses? Give specific examples.
Entry (350-500 words)*

Answers

The essay on understanding the advantages and disadvantages of different ways to pay for expenses is given below.

What benefits and loss do payment methods offer?

It streamlines the payment process, boosts security and convenience, happens in real-time, is incredibly handy for everyone, gives the firm a more modern appearance, spans boundaries, enhances the likelihood that budgets will be converted into sales, swiftly digitizes any business,

Accepting a paperless system with electronic payments, however, is comparatively easy. The advantages of digital payment systems include speed, safety, ease of collection, and lower costs for the company.

Making money is the entire reason a firm is established. And only if your company allows clients to make payments is the entire concept of profitability viable. Online payments have grown in importance as a result of recent technology breakthroughs in the e-commerce sector.

Offering consumers a variety of payment alternatives is advantageous for the business as well because customers are more likely to pay quickly and fully given the simplicity of payment than they would be if they only had a few options.

Lastly, Some Problems with  Payments are:

Technical difficulties.password dangers.The cost of fraud.Security worries.technological ignorance.time and resource restrictions.contested transactions

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For each of the following situations listed below, match the following information quality characteristic that either most accurately applies to the situation, or would be the best characteristic to improve the information. More than one characteristic could apply to each situation but choose the most appropriate one.
Characteristics: Accessibility, Completeness, Comparability, Confirmatory value, Faithful representation, Predictive value, Relevance, Timeliness, Understandability, Verifiability.
1. At the beginning of the COVID-19 pandemic, the United States was behind many other countries in testing people for the coronavirus. News reports said that people with symptoms struggled for access to tests, often in vain. The lack of testing availability resulted in reports of COVID cases that bore no resemblance to the reality of how much the virus had really spread. Consequently, there was fear and uncertainty. 2. This characteristic strongly factors into the reason for reporting land and buildings at historical cost in a company's Balance Sheet, even though this value may bear no resemblance to the fair market value of the asset. 3. In the income statement of a company, sales transactions included in the revenue amount are only those that reflect revenue earned during the reporting period-no more and no less. 4. In the management decision to replace a long-haul transportation truck used for the past 10 years, inclusion of information about the original cost of the truck in a report has no (fill in the characteristic). 5. Disney World provides guests with Magic Bands, which are wrist bands that collect data on who the guests are, where they are, what rides they go on, and what they buy. Disney characters greet children wearing the bands by name. Magic Bands provide Disney with an incredible amount of data about guest profiles and preferences. Information like this can help Disney improve decision making for optimal management of its resorts. 6. Alicia's Accessories is developing a proprietary big data system called Just-in-Time. The intention of the systemis to continuously monitor and improve operations, products, marketing, sales, and employee training and to improve competitive advantage. The data comes from the company's point-of-sale systems, inventory systems, promotions, customer feedback and surveys, and loyalty programs. Justin-Time provides information every 30 minutes at headquarters for immediate decision making. Operational glitches get immediate attention. 7. According to the magazine Fost Company, not making the content of business websites available to people with disabilities means potentially losing around
$500 million in spending power. This amount does not include losses from lawsuits. Fast Company provides examples of businesses that have been sued for failing to offer ADA-compliant websites, including Domino's and Beyoncés Parkwood Entertainment. 8. Oil and gas companies consistently apply the same industry-specific accounting standards to their financial statements, and so there should be a high level of (fill in the characteristic) within that industry. 9. A company with information about a probable and material lawsuit must report it in the notes to its financial statements. An attempt to withhold this information indicates bias and not (fill in characteristic). 10. Financial statements include information on cash flows so that financial analysts and investors can evaluate the accuracy of their past predictions. 11. Financial analysts and investors use past financial statements as a basis to chart performance trends and make predictions about future performance, including profitability and cash flow, for business valuation purposes.

Answers

Matching the given statements includes statement A with option 5: Quality of information that permits users to identify similarities in and differences between two is comparability.

The given statements can be matched as per following:

Comparability - (a) Quality of information that permits users to identify similarities in and differences between two sets of economic phenomena.

Timeliness - (b) Having information available to users before it loses its capacity to influence decisions.

Predictive value - (c) Information about an economic phenomenon that has value as an input to the processes used by capital providers to form their own expectations about the future.

Relevance - (d) Information that is capable of making a difference in the decisions of users in their capacity as capital providers.

Neutrality - (e) Absence of bias intended to attain a predetermined result or to induce a particular behavior.

The usability of financial information is addressed by the accounting information quality of comparability. Relevance includes both confirmatory and predictive value. In addition to being natural, free from substantial error, complete, and judicious, reliability also includes faithful representation. Comparability includes transparency and uniformity.

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Correct question is:

Match the qualitative characteristics below with the following statements.

1. Relevance

2. Faithful representation

3. Predictive value

4. Confirmatory value

5. Comparability

6. Completeness

7. Neutrality

8. Timeliness

(a) Quality of information that permits users to identify similarities in and differences between two

sets of economic phenomena.

(b) Having information available to users before it loses its capacity to influence decisions.

(c) Information about an economic phenomenon that has value as an input to the processes used

by capital providers to form their own expectations about the future.

(d) Information that is capable of making a difference in the decisions of users in their capacity as

capital providers.

(e) Absence of bias intended to attain a predetermined result or to induce a particular behavior.

When $20 does not buy as
much as it once did in stores,
inflation has occurred. Which
of the following does this
represent?

Answers

Can you please show a picture?!!!

Q.No. 1 Assume yourself as a Marketing Specialist of a Company and Determine the New Product Development Process by manufacturing a New Product for your company. Max Marks 10
Max : 200words

Answers

Answer:

New products suffer through five development stages throughout the product lifecycle.

Explanation:

Manufacturing a new product isn't easy for any company. There is always uncertainty whether that product will run successfully as per customer needs.  

Stage 1: Idea

Every product development starts with an idea you need to get an idea about the market and about the customer needs. you need to find out what market requires the most. As soon as you got the idea you can jump to the next step.

Stage 2: Research

In this step, the company conducts market surveys about the product idea. The company has to provide samples to market to check their product is working perfectly or whether it requires some changes and how customers are responding. The company has to collect reviews from customers.

Stage 3: Marketing

Once the company got the customer reviews and they are positive then its time to tell the world about the product but the company has to analyze the 4 Ps that are price, place, promotion, and product. The company has to consider these Ps in marketing stage.  

Stage 4: Business Analysis

This is a very important step where a company finds out about the factors about the product such as the product's profitability. Whether the product is profitable enough to carry on marketing activities.

Step 5 Commercilisation

After performing every stage properly its time to launch the product. In this stage, the company produces the product in large quantity and supplies it to market to cover all the cost it took to launch and make the company more profitable

Mandy is going to a four year universily and is completing classes When she graduates, she is planning on starting a job in the Energy career cluster. Which job will Mandy most likely be applying for?

A) Power Line Repairer
B) Nuclear Power Reacter Operater
C) Electrician
D) Petroleum Enginner​

Answers

Answer:

D) Petroleum Engineer

Explanation:

A power line repairer only needs an associates degree (2 years of college). Nuclear Power Reactor Operator only needs a high school degree (more or less) An Electrician only needs a high school degree (more or less) And Petroleum Engineers have a Bachelors degree aka 4 years of college.

Sorry if I was to late to answer your question but I hope it can at least help someone else :)

Answer:

D

Explanation:

i took the unit test

management accounting is accounting for effective management. Explain this statement.​

Answers

Explanation:

Management is the process of organizing, commanding, coordinating and controlling administrative resources. When we talk about management accounting, we relate to a company's financial resources, which are essential for profitability, payments, investments, etc., that is, so that the business can flow effectively.

Therefore, it is correct to say that managerial accounting is the accounting for effective management because accounting is an instrument of control and management for organizing financial accounts and indexes, these being essential instruments in helping to better decision making in a period of time, giving subsidies for managers to adapt and anticipate negative financial situations for example.

"Gold is preferred to cigarettes when used as money.” Give TWO reasons to explain this
argument.

Answers

Explanation:

the answer is in the image above

"Gold is preferred to cigarettes when used as money. Give TWO reasons to explain thisargument.

The actuarial gains or losses that result from changes in the projected benefit obligation are called Group of answer choices Liability Gains & Losses None of the above Asset or Liability Gains & Losses Asset Gains & Losses

Answers

Answer: Liability Gains & Losses

Explanation:

The Projected Benefit Obligation refers to the present value of the amount that a company owes its employees as pension if its employees retire with the company so this is a liability to the company.

If this PBO is to change therefore and actuarial gains or losses are recorded from this change, they would affect the liabilities of the company and would therefore have to be referred to as liability gains and losses.

Which statement is true regarding monopolistic competition?

Answers

Answer:

AR>MR

--------------------------------------

WHERE ARE THE OPTIONS.

After luke tries to understand wang-li's family situation, wang-li shares his concerns about his ability to complete his work responsibilities. Then luke asks questions and listens carefully to further understand wang-li's worries about the work. Luke learns that wang-li is especially worried because his family has invested so much into his career success. Which element of eq is most displayed in this case?

Answers

The element of eq that is most displayed in this case is: Empathy.

What is Empathy?

Empathy is the quality of putting ourselves in the shoes of others. An empathetic person seeks to understand the situation of others.

Luke displayed empathy when he tried to understand Wang-li's family situation. An empathetic person listens and understands.

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trolling is always considered a joke and is acceptable behavior. True or false?

Answers

true

Explanation:

for me personally it literally just trolling why get mad over it while it's all just a big joke. well not unless if you troll over a serious topic like making a joke out of a girl that died than that's not an acceptable behavior. honestly trolls should be taken as a joke without any commotion..

The worst crash rate involving fatalities is in the age group of drivers ...
A. ages 21 to 25.
B. ages 19 years old and younger.
C. ages 75 and older.

Answers

Answer:

The age group with the most fatal crashes is drivers between the ages of 25 and 34. There are nearly 1,000 more deaths per year among 25- to 34-year-olds than drivers under 25.

Final answer:

The age group with the worst crash rate involving fatalities is generally the 19 years and younger group. This is largely due to factors like inexperience and risk-taking behavior. However, statistics can vary and elderly drivers can also have higher crash rates.

Explanation:

Based on statistical data, the age group with the worst crash rate involving fatalities is typically B. ages 19 years old and younger. This is often due to a combination of inexperience, risk-taking behavior, and lack of maturity. However, it's important to note that numbers can vary slightly depending on the region and the specific year being considered. It's also worth mentioning that older drivers, specifically those ages 75 and older, can also have higher crash rates due to factors such as declining health conditions and slower reaction times.

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What type of information is NOT found on a consumer's credit report?
A)
bankruptcies or tax liens
B)
employment history
C)
current and past addresses
D)
personal medical information

Answers

i think the answer is D. i’m not really sure but i’m sorry if it is wrong

The goal of a subsidy is to __________. a.) discourage consumption of a good b.) raise revenue for the government c.) encourage production of a good d.) avoid deadweight loss

Answers

The goal of a subsidy is to encourage production of a good.

A subsidy can be described as when the government reduces the cost of production or the cost of a good or service to consumers. It is a form of transfer of wealth from the government to consumers or producers.

The purpose of subsidies is to reduce the price of goods and services. This encourages production or consumption. Subsidies reduces the revenue of the government.

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Which of the following is not an intangible you should be sensitive to as a team leader?
O honesty
O quality
O loyalty
O legality

Answers

Legality is not an intangible that you as a team leader should pay attention to.

Who or what controls a group of people?

A team leader is someone who directs, teaches, and mentors a group of people who are working as a team. According to this description, a team leader must be able to supervise the work of others, communicate clearly, and deal with any problems that may arise as a project progresses.

In order to carry out their numerous vital responsibilities, the team leader must make sure that all team members have access to the necessary information, remove obstacles to productivity, motivate team members, and provide support to the group.

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3. Some scholars and practitioners compared the failure rate for small businesses with the divorce rate in marriage and the student failure rate in college. Are these fair comparisons? Why/why not? Discuss in the view of “Goal setting, preparation, perspiration and dedication.

Answers

Answer:Whether the comparison of the failure rate of small businesses to the divorce rate or the student failure rate in college is fair depends on the perspective.

From one perspective, comparing the failure rate of small businesses to the divorce rate may be fair because both involve ending a committed relationship or endeavor and are influenced by similar factors such as unrealistic expectations, lack of preparation, and inadequate resources.

However, from another perspective, these comparisons may not be fair because small businesses and marriages or college education involve different levels of investment, risk, and complexity. For example, starting a small business requires much more financial and personal investment than getting married or attending college, and the consequences of failure in each situation can be very different.

In terms of "Goal setting, preparation, perspiration, and dedication," all three situations (starting a small business, getting married, and attending college) require a clear goal, preparation, hard work, and a commitment to success. However, the specific goals, preparations, and level of dedication needed may vary greatly.

Therefore, while these comparisons may provide some insights, it's important to consider the unique challenges and complexities of each situation before drawing broad conclusions.

Explanation:

a. At the beginning of the year, Addison Company's assets are $176,000 and its equity is $132,000. During the year, assets
increase $80,000 and liabilities increase $59,000. What is the equity at year-end?
b. Office Store Company has assets equal to $224,000 and liabilities equal to $194,000 at year-end. What is the equity for
Office Store Company at year-end?
c. At the beginning of the year, Quaker Company's liabilities equal $69,000. During the year, assets increase by $60,000,
and at year-end assets equal $190,000. Liabilities decrease $18,000 during the year. What are the beginning and ending
amounts of equity?

Answers

At the beginning of the year, Addison Company's assets will be:

a. The equity at year-end will be $197,000.

b. The equity for Office Store Company at year-end will be $30,000.

c. The beginning and ending amounts of equity will be $103

What is assets?

Assets are items of value owned by an individual or an organization. Assets are divided into two categories: tangible and intangible. Tangible assets are physical in nature, such as cash, land, buildings, equipment, inventory, and investments. Intangible assets are non-physical, such as intellectual property, goodwill, copyrights, and trademarks. Assets can be used to measure the value of a business and its performance.

a. Equity at year-end = $176,000 + $80,000 - $59,000 = $197,000

b. Equity for Office Store Company at year-end = $224,000 - $194,000 = $30,000

c. Beginning equity = $69,000; Ending equity = $190,000 - $69,000 - $18,000 = $103

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What are some of the reasons businesses fail?

Answers

Answer:

The most common reasons businesses fail include a lack of capital or funding, retaining an inadequate management team, a faulty infrastructure or business model, and unsuccessful marketing initiatives.

Some of the reasons businesses fail are lack of knowledge, lack of planning, lack of management of resources effectively.

What is business?

An economic activity that involves the exchange of goods and services with the help of buying and selling with the objective to gain some profit is called Business.

A business can possibly fail when there is no planning of things like what to do and how to do it. For a business, to be effective, there should be a plan or roadmap which needs to be followed step by step in order to succeed.

A business will fail when it is unable to manage the capital as well as the workforce effectively and make optimum utilization of it in order to produce and achieve productivity in abundance.

When a business does not have expertise or knowledge about the field as well as current market trends and competitors it will go to fail as it is unable to cope with the trend

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Desperado Corporation's relevant range of activity is 2,000 units to 7,000 units. When it produces and sells 5,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 6.60 Direct labor $ 3.65 Variable manufacturing overhead $ 1.45 Fixed manufacturing overhead $ 2.80 Fixed selling expense $ 0.70 Fixed administrative expense $ 0.40 Sales commissions $ 0.50 Variable administrative expense $ 0.45 If 4,000 units are sold, the total variable cost is closest to:

Answers

Answer:

Total variable cost= $50,600

Explanation:

Giving the following information:

5,000 units:

Direct materials $ 6.60

Direct labor $ 3.65

Variable manufacturing overhead $ 1.45

Sales commissions $ 0.50

Variable administrative expense $ 0.45

Total unitary variable cost= $12.65

Now, for 4,000 units:

Total variable cost= 12.65*4,000

Total variable cost= $50,600

Cooper Grant is the president of Acme Brush of Brazil the wholly owned Brazilian subsidiary of U.S.-based Acme Brush Inc. Cooper Grant’s compensation package consists of a combination of salary and bonus. His annual bonus is calculated as a predetermined percentage of the pretax annual income earned by Acme Brush of Brazil. A condensed income statement for Acme Brush of Brazil for the most recent year is as follows (amounts in thousands of Brazilian real [BRL]):
Sales . . . . . . . . . . . . . . . . . . . . . . . . Expenses . . . . . . . . . . . . . . . . . . . . . Pretax income . . . . . . . . . . . . . . . . .
BRL10,000 9,500 BRL 500
After translating the Brazilian real income statement into U.S. dollars, the condensed income statement for Acme Brush of Brazil appears as follows (amounts in thousands of U.S. dollars [US$]):
Sales . . . . . . . . . . . . . . . . . . . . . . . . Expenses . . . . . . . . . . . . . . . . . . . . . Pretax income (loss) . . . . . . . . . . . . .
US$3,000 3,300
US$ (300
Required:
a) Explain how Acme Brush of Brazil’s pretax income (in BRL) became a U.S.-dollar pretax loss.
The Acme Brush of Brazil pre tax income in BRL became a United States dollar pretax loss because the dollar if financially stronger as compared to the BRL; this is the reason as to why it became a United States dollar pretax loss.
b) Discuss whether Cooper Grant should be paid a bonus or not.
Cooper Grant ought to be paid a bonus mostly due to the simple fact that as the wholly owned Brazilian subsidiary of the United States based Acme Brush and as such they ought to be paid a compensation which consists of both a bonus as well as a salary. Another factor is that they also tend to incur a pretax loss as a result of translating the Brazilian Real each time they are compensated without the bonus (Saudagaran, 2009).

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