Craft Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to non-detectible materials defects. Inspection occurs when units are 50% converted. Spoiled units generally constitute 5% of the good units. Data for December 2012 are as follows: WIP, beginning inventory 12/1/12--------------20,000 units Direct materials (100% complete) Conversion costs (75% complete) Started during December----- --80,000 units Completed and transferred out 12/31/12----76,800 units WIP, ending inventory 12/31/12--------------16,000 units Direct materials (100%complete) Conversion costs (65% complete) Costs for December WIP, beginning inventory Direct materials Conversion costs------- Direct materials added--- Conversion costs added--- What is the number of total spoiled units? -100,000 ---60,000 --200,000 --280,000

Q: Explain CMO Mechanics?

A: Collateralized mortgage obligation: It is a financial instrument that raises funds by…

Q: How is ARR calculated?

A: ARR: Accounting Rate of Return (ARR) is the rate of return earned on the investment made in a…

Q: What is the purpose of EDI?

A: Transparency in electronic data exchange: Expanding EDI enables suppliers to get access to a buyer's…

Q: Define value chain.

A: Value Chain: Value Chain is the combination of activities including all the costs to do such…

Q: What are ADRs?

A: Answer: An American depositary receipt (ADR) is a negotiable asset that denotes a non-US company…

Q: What is Gordon model?

A: Intrinsic value of a stock is based on the internal information of an organization. That is, market…

Q: Describe the functions and powers of ASIC

A: Australian securities and investment commission is a commission made in 1998 of Australian…

Q: Explain NAREIT Index?

A: NAREIT Index Rate: It implies the compound dividend yield which is communicated as far as a yearly…

Q: Define correlation

A: Correlation: Correlation is a statistical method that can display whether and just how strongly…

Q: Describe the PW method?

A: There are different types of methods for comparing the worthiness of the projects. Some of the tem…

Q: What is Miller model?

A: It represents the impact of individual taxes or personal taxes into the valuation of a levered firm,…

Q: Define NRV method.

A: Definition:   Product costs: The costs incurred to acquire the merchandise, ship the stock, prepare…

Q: Consider REMICs?

A: A real estate mortgage investment conduit (REMIC) is a difficult puddle of mortgage securities…

Q: Define Volcker rule

A: Volcker Rule is a regulation that implies restrictions on the banks to involve in the stock market…

Q: What is MM Proposition I?

A: Modigliani and Miller’s approach is an element of economic theory and it forms the basis for modern…

Q: What is PNL?

A: The term PNL is used in accounting, finance, and business to refer profit and loss.

Q: What is alpha transfer?

A: The term ‘Alpha’ refers to the active return on investment. In other words, the excess return from…

Q: What is the LIFO conformity rule?

A: Last-in-First-Out (LIFO): In this method, items purchased recently are sold first. So, the value of…

Q: What is a CMO?

A: A collateralize mortgage obligation (CMO) refers to a type of mortgage-backed security that contains…

Loanable Funds Theory

The loanable funds theory is a neoclassical theory that determines the interest rate where the demand for loanable investments and supply of loanable funds intersect. To determine the interest rate, this theory employs linear regression and a demand curve. At the equilibrium point, demand for borrowings and demand for the issuance of borrowing funds are inextricably linked. This point of equilibrium should equalize demand and the supply of money available for borrowing.