A prospective buyer pays a store owner $150 for the right to buy the store at any time within the next six (6) months at a price of $500,000. The store owner accepts the $150. Is this option valid?
A. Yes, because the $150 would be considered valuable consideration.
B. Yes, because the option must be at lease six months for the person to decide if they are purchasing.
C. No, because an option may not extend for more than 90 days.
D. No, because the option consideration must be at least 5% of the purchase price as stated in the option.
Answer: A. Yes, because the $150 would be considered valuable consideration.
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Which of the statements below is FALSE regarding interest rates in the period 1950-1999?
A) Inflation averaged 4.05%. B) The real rate averaged 1.18%. C) The default premium averaged 7.05%. D) The maturity premium averaged 1.28% (for twenty-year maturity differences).
Budgets for production and direct manufacturing labor
(CMA, adapted) Roletter Company makes and sells artistic frames for pictures of weddings, graduations, and other special events. Bob Anderson, the controller, is responsible for preparing Roletter's master budget and has accumulated the following information for 2015: In addition to wages, direct manufacturing labor-related costs include pension contributions of $0.50 per hour, worker's compensation insurance of $0.20 per hour, employee medical insurance of $0.30 per hour, and Social Security taxes. Assume that as of January 1, 2015, the Social Security tax rates are 7.5% for employers and 7.5% for employees. The cost of employee benefits paid by Roletter on its employees is treated as a direct manufacturing labor cost. Roletter has a labor contract that calls for a wage increase to $13 per hour on April 1, 2015. New labor- saving machinery has been installed and will be fully operational by March 1, 2015. Roletter expects to have 17,500 frames on hand at December 31, 2014, and it has a policy of carrying an end-of-month inventory of 100% of the following month's sales plus 50% of the second following month's sales. Required: 1. Prepare a production budget and a direct manufacturing labor budget for Roletter Company by month and for the first quarter of 2015. You may combine both budgets in one schedule. The direct manufacturing labor budget should include labor-hours and show the details for each labor cost category. 2. What actions has the budget process prompted Roletter's management to take? 3. How might Roletter's managers use the budget developed in requirement 1 to better manage the company?