Which of the following statements is true?
A) Inventories allow manufacturers to operate different work centers at the same output.
B) Inventories allow manufacturing to reduce production runs, reducing unit cost.
C) Inventories allow manufacturing to level out production and to satisfy peak demand.
D) All of the above are true.
E) None of the above is true.
C
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In the context of operations management, a _____ is defined as a set of related activities that transform inputs into outputs, thus adding value.
A. divestment B. poka-yoke C. process D. portfolio
Chang Corp. has $375,000 of assets, and it uses only common equity capital (zero debt). Its sales for the last year were $550,000, and its net income was $25,000. Stockholders recently voted in a new management team that has promised to lower costs and get the return on equity up to 15%. What profit margin would the firm need in order to achieve the 15% ROE, holding everything else constant? Do not round your intermediate calculations.
A. 10.13% B. 8.59% C. 10.23% D. 10.64% E. 9.92%
Perry Company acquires 100% of the stock of Hurley Corporation on January 1, 2017, for $3,800 cash. As of that date Hurley has the following trial balance: Debit CreditCash$500 Accounts receivable 600 Inventory 800 Buildings (net) (5 year life) 1,500 Equipment (net) (2 year life) 1,000 Land 900 Accounts payable $400 Long-term liabilities (due 12/31/20) 1,800 Common stock 1,000 Additional paid-in capital 600 Retained earnings 1,500 Total$5,300 $5,300 ??Net income and dividends reported by Hurley for 2017 and 2018 follow:? 20172018Net income$100 $120 Dividents 30 40 ??The fair value of Hurley's net assets that differ from their book values are listed
below:? Fair ValueBuildings$1,200 Equipment 1,250 Land 1,300 Long-term liabilities 1,700 ? ?Any excess of consideration transferred over fair value of net assets acquired is considered goodwill with an indefinite life .?Compute the amount of Hurley's equipment that would be reported in a December 31, 2018, consolidated balance sheet. A. $1,125. B. $0. C. $1,250. D. $1,000. E. $1,200.
You form a partnership with your best friend. You have contributed 65% of the capital and can claim 65% of the net income. At the end of the first year, you discover that your partner has run up $40,000 in debt using the business' credit card. The maximum you could be liable for is:
A. $26,000. B. $20,000. C. $0. D. $40,000.