In the previous chapters, we considered different allocation methods and considered which one might be “better.” Why might a manager have a different opinion about the “best” allocation system after he or she moves to another business unit? Is this ethical?
The simulation output from Example 11.7 indicates that an investment heavy in stocks produces the best results. Would it be better to invest entirely in stocks? Answer this by rerunning the simulation. Is there any apparent downside to this strategy?
Example 11.7
Attorney Sally Evans has just begun her career. At age 25, she has 40 years until retirement, but she realizes that now is the time to start investing. She plans to invest $1000 at the beginning of each of the next 40 years. Each year, she plans to put fixed percentages—the same each year—of this $1000 into stocks, Treasury bonds (T-bonds), and Treasury bills (T-bills). However, she is not sure which percentages to use. (We call these percentages investment weights.) She does have historical annual returns from stocks, T-bonds, and T-bills from 1946 to 2007. These are listed in the file Retirement Planning.xlsx. This file also includes inflation rates for these years. For example, for 1993 the annual returns for stocks, T-bonds, and T-bills were 9.99%, 18.24%, and 2.90%, respectively, and the inflation rate was 2.75%. Sally would like to use simulation to help decide what investment weights to use, with the objective of achieving a large investment value, in today’s dollars, at the end of 40 years.
Objective To use simulation to estimate the value of Sally’s future investments, in today’s dollars, from several investment strategies in T-bills, T-bonds, and stocks.
If a cost object such as a product or customer has a positive yellow margin, then:
A) its green margin will be positive.
B) its green margin may be positive, negative, or zero.
C) its green margin will be negative.
D) its green margin will be zero.
BE18-6 Determine the missing amounts.
Unit Selling
Price
Unit Variable
Costs
Contribution
Margin per Unit
Contribution
Margin Ratio
1.
$640
$384
(a)
(b)
2.
$300
(c)
$90
(d)
3.
(e)
(f)
$320
25%
Anton Blair is the manager of a medium-sized company. A few years ago, Blair persuaded the owner to base a part of his compensation on the net income the company earns each year. Each December he estimates year-end financial figures in anticipation of the bonus he will receive. If the bonus is not as high as he would like, he offers several recommendations to the accountant for year-end adjustments. One of his favorite recommendation is for the controller to reduce the estimate of doubtful accounts.What effect does lowering the estimate for doubtful accounts ihave on the income statement and balance sheet?Do you believe Blair’s recommendation to adjust the allowance for doubtful accounts is within his rights as manager, or do you believe this action is an ethics violation? Justify your response.
i need a bibliography for the sources i have that i will be using for my next essay. a paragraph is included per each source stating main idea of source, opinion of writer, position of writer and thesis and claim and a works cited. the total of the bibliography should be aroudn 5 pages, more if neededPosted: 4 years agoDue: 10/11/2015Budget: $20
Last year, variable expenses were 60% of total sales and fixed expenses were 10% of total sales. If the company increases its selling prices by 10%, but if fixed expenses, variable costs per unit, and
Ledger Cards for Materials. Records of the Summit Company show the following purchases and issues of materials during October:
October I. Beginning balance: 2,800 units @ $12.00 per unit.
4. Issued 1,200 units.
6. Received 1,000 units @ $13.30 per unit.
8. Issued 1,000 units.
14. Received 400 units @ $ I 4.00 per unit.
17. Issued 800 units.
20. Received 500 units @ $14.16 per unit.
25. Issued 900 units.
27. Received 1,200 units @ $13.00 per unit.
Required: (1) A materials ledger card using fifo costing. (2) A materials ledger card using lifo costing.
(3) A materials ledger card using average costing.
(4) Cost of materials issued during October for the three methods. (5) Cost of ending inventories.
(6) The October 31 inventory if the market price of the materials on that date is $11per unit.
Inventory data for a manufacturing firm for the month of January follows. One set of figures is based on variable costing and the other set is based on absorption costing. REQUIRED A. Which balance sheets is based on the absorption costing method? Explain. B. During January, was production equal to, greater than, or less than sales for the month? Explain. C. Calculate the dollar difference between variable costing income and absorption costing income forJanuary.
Lagerfeld Company reported the following results from the sale of 5,000 hammers in May: sales $200,000, variable costs $120,000, fixed costs $60,000, and net income $20,000. Assume that Lagerfeld increases the selling price of hammers by 10% on June 1. How many hammers will have to be sold in June to maintain the same level of net income?
a. 4,000.
b. 4,300.
c. 4,500.
d. 5,000.
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