Jay farrar company is a manufacturing company that specializes in writing instruments. the past year was a difficult one for the company, as it sought to retain its share in a market in which the largest competitors were also rapid innovators. jay farrar introduced a new product late in the year, even though testing was not complete. it was a pen designed with two cartridges: one supplying ink and the other correction fluid. a person could then switch easily between writing and correcting errors. it was priced fairly high, and was never heavily advertised. even so, the correct-o-pen, as the product was named, was an overwhelming success. the success of the product has josh ritter, the manager of the new products division, worried, however. he was concerned that quality problems would begin occurring, since the longevity of the pen and stability of the correction fluid formulation had not been tested. he did not want sales personnel to get the bonuses that appeared to be indicated, since they might aggressively promote a product that would fail in use. he preferred to complete testing of the pen first, so that more confidence could be placed in the results. top management, however, declined the tests. mr. ritter then instructed you, the accountant, not to prorate payroll taxes or rent expense for the rest of the year, but to show them as current expenses in total. in this way, the new product would appear to be only slightly profitable. required: 1. describe the alternatives that you as an accountant would have in this situation.2. indicate which alternative is best.

Choose the statement that is incorrect. a. search activity occurs only in markets where there is a shortage. b. when a price is regulated and there is a shortage, search activity increases. c. the time spent looking for someone with whom to do business is called search activity. d. the opportunity cost of a good is equal to its price plus the value of the search time spent finding the good.

Cardinal company is considering a project that would require a $2,725,000 investment in equipment with a useful life of five years. at the end of five years, the project would terminate and the equipment would be sold for its salvage value of $400,000. the company’s discount rate is 14%. the project would provide net operating income each year as follows: sales $2,867,000 variable expenses 1,125,000 contribution margin 1,742,000 fixed expenses: advertising, salaries, and other fixed out-of-pocket costs $706,000 depreciation 465,000 total fixed expenses 1,171,000 net operating income $571,000 1. which item(s) in the income statement shown above will not affect cash flows? (you may select more than one answer. single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. any boxes left with a question mark will be automatically graded as incorrect.) (a)sales (b)variable expenses (c) advertising, salaries, and other fixed out-of-pocket costs expenses (d) depreciation expense 2. what are the project’s annual net cash inflows? 3.what is the present value of the project’s annual net cash inflows? (use the appropriate table to determine the discount factor(s) and final answer to the nearest dollar amount.) 4.what is the present value of the equipment’s salvage value at the end of five years? (use the appropriate table to determine the discount factor(s) and final answer to the nearest dollar amount.) 5.what is the project’s net present value? (use the appropriate table to determine the discount factor(s) and final answer to the nearest dollar amount.)

Kubin company’s relevant range of production is 18,000 to 22,000 units. when it produces and sells 20,000 units, its average costs per unit are as follows: average cost per unit direct materials $ 7.00 direct labor $ 4.00 variable manufacturing overhead $ 1.50 fixed manufacturing overhead $ 5.00 fixed selling expense $ 3.50 fixed administrative expense $ 2.50 sales commissions $ 1.00 variable administrative expense $ 0.50 required: 1. for financial accounting purposes, what is the total amount of product costs incurred to make 20,000 units? 2. for financial accounting purposes, what is the total amount of period costs incurred to sell 20,000 units? 3. for financial accounting purposes, what is the total amount of product costs incurred to make 22,000 units? 4. for financial accounting purposes, what is the total amount of period costs incurred to sell 18,000 units?