Answer:
Cost of goods manufactured 429000
Explanation:
The computation of the cost of goods manufactured is shown below:
Particulars Amount (in $)
Sales 505000
Less: Gross Margin 63000
Cost of goods sold 442000
Add: Ending Finished Goods Inventory 71000
Less: Opening Finished Goods Inventory 84000
Cost of goods manufactured 429000
one markeitng action that can be taken to sell a single product or service to muylpele market segments is to
Answer: C. develop separate promotional campaigns.
Explanation:
Different market segments will have different norms and values that companies will have to take advantage of in order to sell their goods or services.
They will therefore need to develop separate promotional campaigns that are aimed at taking advantage of these norms and values in order to appeal to the people in the different segments.
Sheffield Corp. has a materials price standard of $2.00 per pound. 4900 pounds of materials were purchased at $2.20 a pound. The actual quantity of materials used was 4900 pounds, although the standard quantity allowed for the output was 4000 pounds. Sheffield Corp.'s materials quantity variance is:_____.
a. $1980 U.
b. $1800 F.
c. $1800 U.
d. $1980 F.
Answer:
a. $1,980 U
Explanation:
We will compute the direct materials quantity variance using the formula below.
Direct materials quantity variance =
(Standard quantity allowed - Actual quantity of materials) × Materials price standard
Fixing in the values, we'll have;
Direct materials quantity variance
= (4,000 pounds - 4,900 pounds) × $2.20 per pound
= -900 pounds × $2.20 per pound
= -$1,980
= $1,980 U
Robot uses competitive analysis processs to collect data on what their competitors are doing. Which of the following is not a test does the company puts each competitor's robot through?
A. Drop.
B. Lab.
C. Edge.
D. Straight line.
E. Box.
Answer:
Drop
Explanation:
Competitive Analysis
This is commonly refered to as a form of research review and final evaluation of one's competitors. It is beneficial due to the fact that the information you obtained/known can help you to be based on your competitor weaknesses
When starting this analysis, always you set up expectations that can be achieved so that one's team has enough time to fully research, analyze, and share their findings.
Competitive analysis, as a part of your business planning, is a means by which an individual believes that their business will survive and thrive competitively in the market because the individual has full attachment to current competitors and one's potential competition too. Putting the robot through a drop test is not correct as it may destroy it.
The Molding Division of Cotwold Company manufactures a plastic casing used by the Assembly Division. This casing is also sold to external customers for $39 per unit. Variable costs for the casing are $12 per unit and fixed cost is $6 per unit. Cotwold executives would like for the Molding Division to transfer 22,000 units to the Assembly Division at a price of $33 per unit. Assume that the Molding Division has excess capacity, but the Assembly Division requires the casing to be made from a specific blend of plastics. This would raise the variable cost per unit to $37.
Answer:
1. No, the Molding Division accept the $33 transfer price proposed by management.
2. The minimum transfer price that the Molding Division will accept is $37.
3. Mutually beneficial transfer price = $38.00
Explanation:
Note: This question is not complete as the requirements are missing. The requirements are therefore provided to complete the question before answering it as follows:
Required:
1. Should the Molding Division accept the $33 transfer price proposed by management?
2. Determine the minimum transfer price that it will accept.
3. Determine the mutually beneficial transfer price so that the two divisions equally split the profits from the transfer. (Round your answer to 2 decimal places.)
The explanation of the answers is now provided as follows:
Note: Since it is assumed that the Molding Division has excess capacity, the relevant cost to consider whether or not to accept is the variable cost per unit. The fixed cost per unit is not relevant as it will be incurred whether or not the transfer is accepted.
We can now proceed as follows:
1. Should the Molding Division accept the $33 transfer price proposed by management?
No, the Molding Division accept the $33 transfer price proposed by management. This is because it is lower than the variable cost per unit of $37 for casing from a specific blend of plastics required by the Assembly Division.
2. Determine the minimum transfer price that it will accept.
The minimum transfer price that the Molding Division will accept is $37. This is equal to the variable cost per unit of $37 for casing from a specific blend of plastics required by the Assembly Division.
3. Determine the mutually beneficial transfer price so that the two divisions equally split the profits from the transfer. (Round your answer to 2 decimal places.)
This can be determined as follows:
Profit per unit from selling to external customers = Selling price per unit to external customers - Variable cost per unit for casing from a specific blend of plastics required by the Assembly Division = $39 - $37 = $2.00
Mutually beneficial transfer price = Variable cost per unit for casing from a specific blend of plastics required by the Assembly Division + (Profit per unit from selling to external customers / 2) = $37 + ($2 / 2) = $38.00
Casey Motors recently reported net income of $55 million. The firm's tax rate was 40.0% and interest expense was $19 million. The company's after-tax cost of capital is 9.0% and the firm's total investor supplied operating capital employed equals $385 million. What is the company's EVA
Answer:
$31.76 million
Explanation:
Economic Value Added is the residual wealth left for shareholders after having accounted for the financing needs of the company as shown by the formula below:
EVA=NOPAT-(WACC*invested capital)
NOPAT is the net operating profit after tax =operating profit(EBIT)*(1-tax rate)
Net income=Earnings before tax*(1-tax rate)
net income= $55 million
EBT=unknown
tax rate=40.0%
$55=EBT*(1-40.0%)
$55=EBT*0.60
EBT=$55/0.60
EBT=$91.67
EBIT=EBT+interest
EBIT=$91.67+$19
EBIT=$110.67
NOPAT=$110.67*(1-40%)
NOPAT=$66.41
WACC=9.0%
perating capital employed=$385
EVA=$66.41-(9.0%*$385)
EVA=$31.76 million
operating capital em
As an economy recovers from a recession, the observed level of labor productivity tends to decline. Why?
A. The marginal product of labor declines as new workers enter the expanding work force.
B. The total product increases during the recovery, but the number of workers declines.
C. The marginal product of labor increases at a slower rate than the decline in employment.
D. The total product remains the same during the recovery, but the number of workers declines.
Answer:
Answer is C. The marginal product of labor increases at a slower rate than the decline in employment.
Explanation:
As an economy recovers from a recession, the observed level of labor productivity tends to decline, Why? Because the marginal product of labor increases at a slower rate than the decline in employment.
As an economy recovers from a recession, the observed level of labor productivity tends to decline because the marginal product of labor increases at a slower rate than the decline in employment. Thus option(C) is correct.
What is recession?A recession can be defined as a sustained period of weak or negative growth in real Gross Domestic Product that is accompanied by a significant rise in the unemployment rate.
A recession is a significant, widespread and prolonged downturn in economic activity. A common rule of thumb is that two consecutive quarters of negative Gross Domestic Product (GDP) grwoth mean recession,
A recession is a significant, pervasive and persistent decline in economic activity. Economists measure a recession's length from the prior expansion's peak to the downturn's trough.
The unemployment remains at high during the recession. The nation uses fiscal and monetary policies to limit the risks of a recession.
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For each of the below, indicate where each item should be presented in the statement of cash flows (using the indirect method) using the legend below. Also, indicate how cash flows are affected. Legend for BLANK 1: A - operating activities B - investing activities C - financing activities D - significant noncash investing and financing activities Legend for BLANK 2: I - Increase D - Decrease N - No effect
Answer:
Blank 1 Blank 2
i. Depreciation expense A I
ii. Purchase of office equipment B D
iii. Decrease in accounts receivable A I
iv. Payment of cash dividends C D
v. Conversion of bonds into common stock D N
vi. Sold land and warehouse used in the corp. B I
vii. Gain on sale of land and warehouse in part vi. A D
viii. Issued common stock for cash C I
ix. Decrease in accounts payable A D
x. Increase in inventory A D
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question. See the attached pdf for the complete question.
How each of the item will appear in the the statement of cash flows (using the indirect method) is also provided below:
XYZ Company
Statement of Cash Flows (Indirect Method Format)
For the year...
Details $ $
Operating activities:
Net profit xxx
Adjustment to reconcile net income:
i. Depreciation expense xx
iii. Decrease in accounts receivable xx
vii. Gain on sale of land and warehouse in part vi. (xx)
ix. Decrease in accounts payable (xx)
x. Increase in inventory (xx)
Net cash flows from operating activities xxx
Investing activities:
ii. Purchase of office equipment (xx)
vi. Sold land and warehouse used in the corporation xx
Net cash flows from investing activities xxx
Financing activities:
iv. Payment of cash dividends (xx)
viii. Issued common stock for cash xx
Net cash flows from investing activities xxx
Net cash flow for the year xxx
Beginning cash balance xxx
Ending cash balance xxx
Note: The does not affect the cash flows statement:
v. Conversion of bonds into common stock
The phase of the business cycle with the highest level of GDP and the lowest unemployment rate is called an?
Answer:
Expansion phase
Explanation:
Expansion is an economic cycle phase in which real gross domestic product rises for two or more months in a succession, going from a trough to a high. Expansion is often known as an improving economy since it is usually followed by an decrease in unemployment, consumer sentiment, and commodity prices.
Answer:
peak
Explanation:
XYZ is considering two alternatives: repairing a damaged van or selling it as is and buying a comparable used van. Information related to this decision is provided below: Initial cost of the damaged van $30,000 Accumulated depreciation to date on van $18,000 Salvage value of the damaged van $ 1,000 Cost to repair damaged van $ 5,000 Cost of a comparable used van $10,000 Based on the information above, XYZ would be financially better off: Group of answer choices
Answer:
d. $4.000 by repairing the damaged van.
Explanation:
Options are "a. $1,000 by buying the comparable van. b. $2,000 by buying the comparable van c. $2.000 by repairing the damaged van. d. $4.000 by repairing the damaged van."
Details Amount
Cost of comparable used Van $10,000
Less: Repair cost $5,000
Less: Salvage value before repair after crash $1,000
Benefit from repairing damaged van $4,000
The Molding Department of Boswell Company has the following production data: beginning work process 40,000 units (60% complete), started into production 730,000 units, completed and transferred out 690,000 units, and ending work in process 80,000 units (40% complete). Assuming conversion costs are incurred uniformly during the process, the equivalent units for conversion costs are:
Answer: 770,000 units
Explanation:
The Equivalent units for Conversion cost is calculated as:
= Total units completed and transferred out + Equivalent units of closing work in process
As the conversion costs were incurred uniformly during the process, the entire closing work in process would have already incurred conversion cost. Conversion cost closing equivalent units are therefore 80,000 units.
Equivalent units for Conversion cost = 690,000 + 80,000
= 770,000 units
All of the following questions are open-ended problems. You must compute an answer for every problem. For percentage answers, calculate your answer as a percent rounded to 2 decimal places. For example, you would record ROA = .1263974 as 12.64% (note that on D2L you will enter 12.64 without the percent sign). For dollar answers, round to the nearest dollar. For example, you would record $12,345.83943 as $12,346 (note that on D2L you will enter 12346 without a comma and without the dollar sign).13. Felton Farm Supplies, Inc. has an ROA (return on assets) of 12 percent, total assets of $1,000,000 and a net profit margin of 4.25 percent. What are Felton Farm Supplies annual sales?14. Krisle and Kringle's debt ratio = 72.0%. What is the company’s debt-to-equity ratio? (Enter answer as a ratio rounded to 2 decimal places – that is, do not convert to a percent; for example, enter 80/35 = 2.2857 as 2.29).15. Philips, Inc has a debt ratio of 42.5% and ROE = 15%. What is Phillips’ ROA? (Enter answer as a percent).16. A firm has an ROA of 16% and a debt/equity ratio of 1.45. The firm's ROE is _________. (Enter answer as a percent).17. Assume that XYZ, Inc. has:Debt ratio = 70% Net profit margin = 15% Return on assets (ROA) = 7.5% Find XYZ’s Total Asset Turnover ratio. (Enter answer as a ratio – that is, do not convert to a percent).
Solution :
13. Net income = total assets x ROA
= $ 1,000,000 x 12%
= $ 120,000
Net Income for company is $120,000.
Net Profit margin = 4.25%
Total sales = net income / net profit margin
= $ 120,000 / 4.25%
= $ 2,823,529
Total sales for company is $ 2,823,529
14. Debt ratio = 72%
So weight of debt = 72%
Weight of equity = 1 - 72%
= 28%
Debt equity ratio [tex]$=\frac{72 \%}{28 \%}$[/tex]
= 2.57
Debt equity ratio is 2.57
15. Debt ratio = 42.50%
So, weight of debt = 42.50%
Weight of equity = 1 - 42.50%
= 57.50%
Weight of equity is 57.50%.
Return on equity = 15%.
Return on assets = 57.50% × 15%
= 8.625%
Return on assets is 8.625%.
16.
Debt Equity ratio = 1.45
Weight of debt = 59.18%
Weight of equity = 40.82%
Return on assets = 16%
Return on equity = 16% / 40.82%
= 39.20%
Return on equity is 39.20%.
17.
Total Assets turnover = Sales / Total Assets
= (Net Income / Total Assets) / (Net Income / Sales)
= ROA / Net Profit margin
= 7.50% / 15%
= 0.50
Total Assets turnover is 0.50.
The quantity demanded x for a product is inversely proportional to the cube of the price p for p > 1. When the price is $10 per unit, the quantity demanded is 64 units. The initial cost is $140 and the cost per unit is $4. What price will yield a maximum profit? (Round your answer to two decimal places.)
$______
Answer:
$6.00
Explanation:
Given data
quantity demanded ( x ) ∝ 1 / p^3 for p > 1
when p = $10/unit , x = 64
initial cost = $140, cost per unit = $4
Determine the price that will yield a maximum profit
x = k/p^3 ----- ( 1 ). when x = 64 , p = $10 , k = constant
64 = k/10^3
k = 64 * ( 10^3 )
= 64000
back to equation 1
x = 64000 / p^3
∴ p = 40 / ∛x
next calculate the value of revenue generated
Revenue(Rx) = P(price ) * x ( quantity )
= 40 / ∛x * x = 40 x^2/3
next calculate Total cost of product
C(x) = 140 + 4x
Maximum Profit generated = R(x) - C(x) = 0
= 40x^2/3 - 140 + 4x = 0
= 40(2/3) x^(2/3 -1) - 0 - 4 = 0
∴ ∛x = 20/3 ∴ x = (20/3 ) ^3 = 296
profit is maximum at x(quantity demanded ) = 296 units
hence the price that will yield a maximum profit
P = 40 / ∛x
= ( 40 / (20/3) ) = $6
The privately-owned school system in Smalltown has a virtually unlimited capacity. It accepts all applicants and operates on both tuition and private donations. Although every resident places value on having an educated community, the school's revenues have suffered lately due to a large decline in private donations from the elderly population. Since the benefit that each citizen receives from having an educated community is a public good, which of the following would not be correct?
a. The free-rider problem causes the private market to undersupply education to the community
b. The govemment can potentially help the market reach a socially optimal level of education.
c. A tax increase to pay for education could potentially make the community better off.
d. The private market is the best way to supply education.
Answer:
A
Explanation:
The privately-owned school system in Smalltown generates positive externality to members of SmalltownA good has positive externality if the benefits to third parties not involved in production is greater than the cost. an example of an activity that generates positive externality is research and development. Due to the high cost of R & D, they are usually under-produced. Government can encourage the production of activities that generate positive externality by granting subsidies.
The free rider problem is a form of market failure. It occurs when people benefit from a good or service of communal nature and do not pay to enjoy these services.
The free rider has caused a decline in revenues and did not cause the private market to undersupply education to the community
John believes his sales team's performance is due to outside forces, like economic and market factors. Which of the following best describes is John's locus of control?
a. External
b. Market driven
c. Internal
d. Based on labor trends.
Answer:
a. External
Explanation:
There are only two types of locus of control and these are internal and external. In this scenario, John's locus of control would be external. This is because John is connecting various external forces that he cannot control, to the performance of the sales team. This indicates an external locus of control. If John where to instead attribute something such as hard work and training to his sales team's perfomance, then that would be considered an internal locus of control.
Which of the following is not a characteristic of a general partnership?
a) the partnership is created by a contract
b) mutual agency
c) partners share equally in net income or net losses unless an agreement states differently
d) dissolution occurs only when all partners agree
Among the following, dissolution occurs only when all partners agree is not a characteristic of a general partnership. Thus the correct option is D.
What is a partnership?When two or more two people come up with the objective to manage the operation of a business by making an alliance by sharing capital for investment and profit or loss of the organization. the collaboration is said to be a partnership.
Dissolution is the termination of a general partnership, whether by mutual consent or by the provisions of law. It is a provision of the partnership agreement that must be developed and accepted by the partners at the very beginning of the partnership.
In a general partnership, each partner is equally responsible for the debts and liabilities of the company, which can have major consequences for finances if the partnership is dissolved quickly and without thorough planning or thought.
Therefore, option D is appropriate.
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Piedmont Company segments its business into two regions - North and South.
The company prepared the contribution format segmented income statement shown below:
Total Company North South
Sales $800,000 $600,000 $200,000
Variable expenses 560,000 480,000 80,000
Contribution margin 240,000 120,000 120,000
Traceable fixed expenses 122,000 61,000 61,000
Segment margin $118,000 $59,000 $59,000
Common fixed expenses 52,000
Net operating income $66,000
Required:
1. Compute the company-wide break-even point in dollar sales.
2. Compute the break-even point in dollar sales for the North region.
3. Compute the break-even point in dollar sales for the South region.
Answer:
1. Company-wide break-even point in dollar sales:
Break even point in dollar sales = (Traceable fixed expenses + Common fixed expenses) / Contribution margin %
Contribution margin % = Contribution margin / Sales revenue * 100%
= 240,000 / 800,000 * 100%
= 30%
Break even point in dollar sales :
= (122,000 + 52,000) / 30%
= $580,000
2. Break-even point in dollar sales for the North region.
Break even point in dollar sales = Traceable fixed costs / Contribution margin %
Contribution margin % = Contribution margin / Sales revenue * 100%
= 120,000 / 600,000 * 100%
= 20%
Break even point in dollar sales :
= 61,000 / 20%
= $305,000
3. Break-even point in dollar sales for the South region.
Break even point in dollar sales = Traceable fixed costs / Contribution margin %
Contribution margin % = Contribution margin / Sales revenue * 100%
= 120,000 / 200,000 * 100%
= 60%
Break even point in dollar sales :
= 61,000 / 60%
= $101,666.67
The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system. April 30 May 31 Inventories Raw materials$35,000 $60,000 Work in process 9,000 20,900 Finished goods 67,000 34,300 Activities and information for May Raw materials purchases (paid with cash) 171,000 Factory payroll (paid with cash) 200,000 Factory overhead Indirect materials 8,000 Indirect labor 46,000 Other overhead costs 108,000 Sales (received in cash) 1,300,000 Predetermined overhead rate based on direct labor cost 55% Compute the following amounts for the month of May using T-accounts. Cost of direct materials used. Cost of direct labor used. Cost of goods manufactured. Cost of goods sold\.\* Gross profit. Overapplied or underapplied overhead. *Do not consider any underapplied or overapplied overhead.
Answer:
Lock-Tite Company
Cost of direct materials used = $138,000
Cost of direct labor used = $154,000
Cost of goods manufactured = $364,800
Cost of goods sold = $397,500
Gross profit = $902,500
Overapplied or underapplied overhead = $77,300
Explanation:
a) Data and Calculations:
April 30 May 31
Inventories
Raw materials $35,000 $60,000
Work in process 9,000 20,900
Finished goods 67,000 34,300
Activities and information for May
Raw materials purchases (paid with cash) 171,000
Factory payroll (paid with cash) 200,000
Factory overhead
Indirect materials 8,000
Indirect labor 46,000
Other overhead costs 108,000
Sales (received in cash) 1,300,000
Predetermined overhead rate based on direct labor cost 55%
T-accounts:
Raw materials
Date Account Titles Debit Credit
April 30 Beginning balance $35,000
May Cash 171,000
May Work in Process $138,000
May Manufacturing overhead 8,000
May 31 Closing balance $60,000
Payroll Expenses
Date Account Titles Debit Credit
May Cash $200,000
May Manufacturing overhead $46,000
May Work in Process $154,000
Work in process
Date Account Titles Debit Credit
April 30 Beginning balance $9,000
May Raw materials 138,000
May Payroll expenses 154,000
May Overhead 84,700
May Finished goods $364,800
May 31 Closing balance $20,900
Finished goods
Date Account Titles Debit Credit
April 30 Beginning balance $67,000
May Work in process 364,800
May Cost of goods sold $397,500
May 31 Closing balance $34,300
Income Summary
Date Account Titles Debit Credit
May 31 Sales revenue $1,300,000
May 31 Cost of goods sold $397,500
May 31 Gross profit $902,500
Manufacturing Overhead
Date Account Titles Debit Credit
May Raw materials $8,000
May Payroll expenses 46,000
May Other overhead 108,000
May Work in Process $84,700 ($154,000 * 55%)
May Underapplied overhead 77,300
Calculate the annual coupon payment if the semi-annual coupon paying bond price is $920, the yield for the bond is 6%, the bond's face value is $1,000 and matures in 9 years.
The annual coupon payment is $48.40.
Annual coupon paymentYield = 6%
Rate = Yield/2 = 6%/2 = 3%
YTM = 9
Nper = YTM×2 = 9×2 = 18
Face value = $1,000
Price(PV) = $920
Monthly payment = PMT(0.03, 18, -920, 1000)
Monthly payment = $24.1833
Coupon rate = (PMT/Face value) ×2
Coupon rate = (24.1833/1000) × 2
Coupon rate = 0.0241833 × 2
Coupon rate = 0.0483666×100
Coupon rate = 4.84%
Annual coupon payment = Face value ×Coupon rate
Annual coupon payment = $1000 ×4.84%
Annual coupon payment = $48.40
Inconclusion the annual coupon payment is $48.40.
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A firm just paid its annual dividend of $1.80 and expects to increase that dividend each year. The discount rate is 11 percent. Which one of these correctly identifies an error when computing the current value of this firm's stock?
a. Po = $1.80/(0.11 -0.03): The growth rate exceeds its limitation.
b. Po = ($1.80 x 1.12(0.11 -0.03); The growth rate in the denominator should be 12 percent to match the growth rate in the numerator.
c. Po = ($1.80 x (1 +.09)[0.11 -.09); The growth rate exceeds it limitation for using this formula
d. Po = $1.80/(0.11 -0.025); The value of Dt, is incorrect as $1.80 equals Do.
Answer:
d. Po = $1.80/(0.11 -0.025); The value of D1, is incorrect as $1.80 equals Do.
Explanation:
Calculation to correctly identifies which one of these is an error when computing the current value of this firm's stock
P0 = $1.80/(0.11 - 0.025)
P0 = $1.80/0.085
P0=$9.76
Therefore Based on the information given Po = $1.80/(0.11 -0.025); because The value of D1, is INCORRECT as $1.80 equals Do.
Describe about comparative cost and absolute advantages of international trade
Answer:
Here's what I know.
Explanation:
Comparative cost talks about the difference or similarities in cost between two or more prices of good or services.
The advantages of international trade are...
1. It creates harmony between countries.
2. It encourages countries to manufacture their own products.
3. It is a source or income/revenue to the producing countries.
4. It is a good employment opportunity.
5. It improves a country's standard of living.
Hope these help... ♥
Suppose that you can sell as much of a product (in integer units) as you like at $68 per unit. Your marginal cost (MC) for producing the qth unit is given by: MC = 9q. This means that each unit costs more to produce than the previous one (e.g., the first unit costs 9*1, the second unit (by itself) costs 9*2, etc.). If fixed costs are $60, what is the optimal output level?
Answer:
8 units
Explanation:
P = $68 per unit
MC = 9q
Fixed cost = $60
It is noted that seller can sell as much as a product at $68 per unit. This means that the firm is price taken, hence, it is case of perfect competition.
For a perfectly competitive firm, the optimal output is at: P = MC
i.e. 68 = 9q
=> q = 68/9
=> q = 7.556
> q = 8
So, the optimal output level is 8 units.
In the month of March, Wildhorse Salon services 620 clients at an average price of $130. During the month, fixed costs were $16,380 and variable costs were 70% of sales
(a) Determine the total contribution margin in dollars, the per unit contribution margin, and the contribution margin ratio Contribution margin in dollars 5 Contribution margin per unit $ Contribution margin ratio %
Answer:
a) We have:
Total contribution margin in dollars = $24,180
Per unit contribution margin = $39
Contribution margin ratio = 30%
b) We have:
Break-even point in dollars = $54,600
Break-even point in in units = 420 units
Explanation:
Note: This question is not complete as its part b is missing. The part b of the question is therefore provided to complete it before answering it as follows:
b) Using the contribution margin technique, compute the break-even point in dollars and in units.
The explanation of the answer is now provided as follows:
a) Determine the total contribution margin in dollars, the per unit contribution margin, and the contribution margin ratio
Average price = $130
Variable costs = Average price * 70% = $130 * 70% = $91
Total sales = Number of clients * Average price = 620 * $130 = $80,600
Total variable cost = Total sales * 70% = $80,600 * 70% = $56,420
Therefore, we have:
Total contribution margin in dollars = Total sales - Total variable cost = $80,600 - $56,420 = $24,180
Per unit contribution margin = Average price - Variable costs = $130 - $91 = $39
Contribution margin ratio = (Total contribution margin in dollars / Total sales) * 100 = ($24,180 / $80,600) * 100 = 30%
b) Using the contribution margin technique, compute the break-even point in dollars and in units.
Break-even point in dollars = Fixed cost / Contribution margin ratio = $16,380 / 30% = $54,600
Break-even point in in units = Fixed cost / Per unit contribution margin = $16,380 / $39 = 420 units
Juniper Design Ltd. of Manchester, England, is a company specializing in providing design services to residential developers. Last year the company had net operating income of $430,000 on sales of $1,300,000. The companyâs average operating assets for the year were $1,500,000 and its minimum required rate of return was 10%.
Required:Compute the companyâs residual income for the year.Average Operating Assets-Net Operating Income-Minimum required return-Residual income-
Answer: $280,000
Explanation:
Residual income can be calculated by the formula:
= Net operating income - (Average operating asset * Minimum required rate)
= 430,000 - (1,500,000 * 10%)
= 430,000 - 150,000
= $280,000
Explain the term "marginal rate of technical substitution." (Assume a two-input production function.)
Answer:
La relación marginal técnica de sustitución (RMTS) expresa la proporción en que un factor productivo se puede sustituir por otro, manteniendo constante la producción total.
Esta relación técnica busca sistemáticamente obtener la cantidad de un factor de producción que hay que disminuir con el objetivo de aumentar en cierto nivel, otro factor productivo. En tal caso la curva de la producción se mantiene en la misma isocuanta de tal forma que tenemos: RMTS= Δ K / Δ L.
Explanation:
.
Rudy's and Blackstone are all-equity firms. Rudy's has 1,200 shares outstanding at a market price of $36 a share. Blackstone has 2,500 shares outstanding at a price of $38 a share. Blackstone is acquiring Rudy's for $48,000 in cash. What is the merger premium per share
Answer:
$4
Explanation:
Calculation to determine the merger premium per share
Using this formula
Merger premium per share=(Cash/Shares outstanding)-Market price
Let plug in the formula
Merger premium per share = ($48,000 / 1,200) - $36
Merger premium per share=$40-$36
Merger premium per share=$4
Therefore the merger premium per share is $4
Ormand Organic Grocery has invested in a yogurt stand for its store. The investment cost the company $100,000. Variable materials, preparation, and marketing costs are expected to be $1.30 per unit and fixed costs are estimated at $7,400 a year. If actual sales were 21,400 servings, what would the ROI be using the sales price of $2.40
Answer:
15.4%
Explanation:
Calculation to determine what would the ROI be
ROI=[ ( $2.40 - $1.30) * 21,400 - $7,400]/100,000
ROI=($1.1 * 14,000)/100,000
ROI=$15,400/100,000
ROI=0.154*100
ROI=15.4%
Therefore the ROI would be 15.4%
(Advanced analysis) Answer the question on the basis of the following information for a mixed open economy. The letters Y, Ca, Ig, Xn, G, and T stand for GDP, consumption, gross investment, net exports, government purchases, and net taxes respectively. Figures are in billions of dollars. Refer to the information. If government desired to raise the equilibrium GDP to $650, it could:
Answer:
The correct option is c. raise G by $30 or reduce T by $40.
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question as follows:
(Advanced analysis) Answer the question on the basis of the following information for a mixed open economy. The letters Y, Ca, Ig, Xn, G, and T stand for GDP, consumption, gross investment, net exports, government purchases, and net taxes respectively. Figures are in billions of dollars.
Ca = 25 + 0.75(Y - T)
Ig = Ig0 = 50
Xn = Xn0 = 10
G = G0 = 70
T = T0 = 30
Refer to the information. If government desired to raise the equilibrium GDP to $650, it could:
a. raise G by $45 or reduce T by $10.
b. raise G by $40 and reduce T by $30.
c. raise G by $30 or reduce T by $40.
d. raise both and T by $40.
e. reduce G by $30 and increase T by $40.
The explanation of the answer is now provided as follows:
Equilibrium GDP (Y) can be obtained as follows:
Y = C + G + I + Xn …………………….. (1)
Substituting all the values in the question into equation (1) and solve for Y, we have:
Y = 25 + 0.75(Y - 30) + 70 + 50 + 10
Y = 0.75Y - 22.50 + 155
Y – 0.75Y = 132.50
0.25Y = 132.50
Y = 132.50 / 0.25
Y = 530
Therefore, we have:
Y = Current equilibrium GDP = $530
Amount of increase in equilibrium GDP required = Desired equilibrium GDP – Current equilibrium GDP = 650 - 530 = 120
From the question, we have:
Ca = 25 + 0.75(Y - T) ………………. (2)
The 0.75 in equation (2) is the marginal propensity to consume (MPC). Therefore, we have:
MPC = 0.75
Expenditure multiplier = 1 / (1 - 0.75) = 4
Tax multiplier = - MPC / (1 – MPC) = -0.75 / (1 – 0.75) = -3
Amount of increase in G or government expenditure required = Amount of increase in equilibrium GDP required / Expenditure multiplier = 120 / 4 = $30
Amount of tax cut or decrease in T required = Amount of increase in equilibrium GDP required / Tax multiplier = 120 / (-3) = -$40
Therefore, correct option is c. raise G by $30 or reduce T by $40.
If the government intervenes and corrects the externality in the situation described, we would expect Group of answer choices the demand for the output from the hydroelectric power plants to decrease. the demand for the output from the hydroelectric power plants to increase the supply of the output from the hydroelectric power plants to decrease the supply of the output from the hydroelectric power plants to increase.
Answer: the supply of the output from the hydroelectric power plants to increase.
Explanation:
The hydroelectric power operators are incurring the cost of cleaning the river before they can use it. This cost is money that they could be investing in the business in order to produce more power.
If the government corrects the externality and limits the amount of waste being thrown into the river, the hydroelectric company would be able to invest the expenses it was incurring in clean up into generating more power which would lead to a higher supply of output from the power station.
A bond has a modified duration of 8 and a price of 112,955 calculated using an annual effective interest rate of 6.4%. EMAC is the estimated price of this bond at an interest rate of 7.0% using the first-order Macaulay approximation EMOD is the estimated price of this bond at an interest rate of 7.0% using the first-order modified approximation Calculate EC EMOD A. 91 B. 102 C. 116 D. 127 E. 143
Answer:
Option E (143) is the appropriate solution.
Explanation:
According to the question,
The modified duration will be:
= [tex]\frac{Macaulay \ duration}{(1+yield)}[/tex]
= [tex]8\times 1.064[/tex]
= [tex]8.512[/tex]
The percentage change in price will be:
= [tex]-0.6\times 8 \ percent[/tex]
= [tex]-4.8[/tex] (%)
Now,
The EMOD will be:
= [tex]112955\times (1-4.8 \ percent)[/tex]
= [tex]107533.2[/tex] ($)
Or,
The EMAC will be:
= [tex]112955\times (\frac{1.064}{1.07} )^{8.512}[/tex]
= [tex]107675.7[/tex] ($)
Hence,
⇒ [tex]EMOD-EMAC=107533.2-107675.7[/tex]
[tex]=-142.5[/tex]
⇒ [tex]EMAC-EMOD=143[/tex]
A company has a factory that is designed so that it is most efficient (average unit cost is minimized) when producing 27,100 units of output each month. However, it has an absolute maximum output capability of 33,000 units per month, and can produce as little as 7,000 units per month without corporate headquarters shifting production to another plant. If the factory produces 17,470 units in October, what is the capacity utilization rate in October for this factory
Answer: 64.47%
Explanation:
Units produced in October = 17470
Units production in the most efficient way = 27,100
Therefore, the capacity utilization rate in October for the factory will be:
= Units produced in October / Units production in the most efficient way
= 17470 / 27100
= 0.6447
= 64.47%
The capacity utilization rate in October for this factory is 64.47%.