A metal works fabricator is about to release a new model of his firm's copper sculpture and fountain
The operations manager estimates that this product is subject to a 90 percent learning curve on labor only–the material bill is not affected by experience. The firm prices its work based on cost–the sum of materials plus 30 percent and labor plus 50 percent. (This allows the firm to practice a form of "demand management" for its very popular works.) The first item has already been finished; the material bill was $800 and labor totaled 40 hours. The firm pays its metalworking artisans an average of $18 per hour. What should be the asking price of the first unit? The second?
Based on the pricing formula, the first unit should be priced at $800 ? 1.30 + 40 ? $18 ? 1.50 = $1,040 + $1,080 = $2,120. The second unit will be cheaper because of the learning effect: $800 ? 1.30 + 36 ? $18 ? 1.50 = $1,040 + 972 = $2,012.
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The building used in Terry's business was condemned by the city of St. Louis. Terry received a condemnation award of $125,000. He paid $1,200 in lawyer's fees and $800 for an appraisal of the property. Terry's adjusted basis in the building was $60,000. Terry reinvests in similar property costing $110,000, and Terry makes the proper election regarding the property. What is the amount of Terry's recognized gain on the condemnation?
A. $50,000 B. $13,000 C. $15,000 D. $63,000
Distributed data processing reduces the risk of operational inefficiencies
Indicate whether the statement is true or false
Campus Carriers Co manufactures and sells backpacks to college students. The company operates a factory in Small Town and two stores in College Town and University City. Classify the following costs incurred by Campus Carriers as Direct Materials, Direct Labor, Factory Overhead or Selling and Administrative Expense
a. Rent paid to lease the store in College Town. b. Canvas fabric. c. Wages paid to students distributing advertising fliers in University City. d. Sewing machine operator's wages. e. Building depreciation on the factory building. f. Thread. g. The cost of transporting the backpacks from the factory in Small Town to the University City store. h. Depreciation of the cash register at the College Town Store. i. Factory manager's salary. j. Security guard at the factory. k. Store manager's salary. l. Electricity to power sewing machines. m. Electricity to light the College Town store.
When performing vertical analysis of a balance sheet, the base amount is ________
A) total assets B) total cash and cash equivalents C) net income D) gross profit