Answer:
You must post the whole paragraph?????
ABC Company operates two divisions with the following operating information for the month of May:
Division 1: sales, $128,000; operating income, $39,680; operating assets, $320,000.
Division 2: sales, $84,000; operating income, $42,336; operating assets, $420,000.
ABC Company expects a minimum return of 10% should be earned from all investments.
Required:
Prepare ABC Company’s ROI analysis using the DuPont model for each division.
Hyundai's Assurance program empathized with American consumers during uncertain financial times, helping to create a psychological and emotional:_______
a. brand association.
b. differentiation strategy.
c. consumer response.
d. marketing campaign.
a. If a wage of $10.25 were to be imposed on this market, such that the market was not longer strictly competitive, what would be the value for labor supply?
b. At the imposed wage of $10.25 what would be the value for labor demand?
c. Provide a properly labeled and appropriately articulated Labor Market Model given the labor supply and demand equations provided and the imposed wage of $10.25.
d. Based on the labor market model you’ve now illustrated, how would you describe the current condition of this market given the imposed wage?
Solution :
Given the wage = $ 10.25 that is to be imposed to the market.
Given equation :
[tex]L_D[/tex] = 500 – 45W and [tex]L_S[/tex] = -200 + 25W
If the wage of $10.25 is to be imposed to the market, the value of the labor supply can be found by putting the value of the wage in the labor supply equation.
At W = 10.25
Putting this value in the above equation, the labor supply would be
[tex]L_S[/tex] = -200 + 25W
[tex]L_S[/tex] = -200 + 25(10.25)
= 56.25
When W = 10.25, the value for the labor demand can be found by :
[tex]L_D[/tex] = 500 – 45W
[tex]L_D[/tex] = 500 – 45(10.25)
[tex]L_D[/tex] = 500 – 461.25
[tex]L_D[/tex] = 38.75
Therefore, the labor demand and the labor supply model is
[tex]L_D[/tex] = 400 - 45 x 10.25
[tex]L_S[/tex] = -200 + 25 x 10.25
Type your answer in the box.
For a population with u = 25 and = 5, we would expect 90% of all x's calculated from n = 35 to
fall between
and
(Round to two decimals.)
Do you know the answer?
D Read about this
I know it
Think so
Unsure
No idea
Answer:
Your answer is given below:
Explanation:
Which economic concept helps explain the changing demand for jewelry?
A. fungibility
b. non-excludability
c. substitution
d. elasticity
Answer:
A.fungibility is a economic concept which helps explain the changing demand for jewelry.
As
Fungibility is the ability of a good or asset to be interchanged with other individual goods or assets .
In 20X4, Bosh Corporation had income of $60,000 using absorption costing. Beginning and ending inventories were 13,000 and 8,000 units, respectively. The fixed manufacturing overhead cost was $4.00 per unit. What was the net income using direct/variable costing
Answer:
Net income under variable costing $80,000
Explanation:
The computation of the net income using direct/variable costing is shown below:
Net income under absorption costing $60,000
Add fixed cost under applied $20,000
Net income under variable costing $80,000
Working
Beginning inventory 13000
Less ending inventory -8000
Decrease in inventory 5000
Now under applied inventory $20,000
Suppose independent truckers operate in a perfectly competitive constant cost industry. If these firms are earning positive economic profits, what happens in the long run to the following: The price of trucking services
Answer:
The price of trucking services would fall until equilibrium prices are reached. Only normal profit would be earned in the long run
Explanation:
A perfect competition is characterized by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.
In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.
Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.
Glaston Company manufactures a single product using a JIT inventory system. The production budget indicates that the number of units expected to be produced are 186,000 in October, 194,500 in November, and 191,000 in December. Glaston assigns variable overhead at a rate of $0.70 per unit of production. Fixed overhead equals $143,000 per month. Compute the total budgeted overhead for October.
Answer:
Budgeted overhead (October)= $273,200
Explanation:
Giving the following information:
Production= 186,000 in October
Predetermined variable overhead= $0.70 per unit.
Fixed overhead equals $143,000 per month.
To calculate the budgeted overhead for October, we need to use the following formula:
Budgeted overhead (October)= 0.7*186,000 + 143,000
Budgeted overhead (October)= $273,200
Kawamura, a careful utility maximizer, consumes peanut butter and ice cream. Assume that both peanut butter and ice cream are normal goods and that diminishing marginal utility applies to both goods. Right after he achieves the utility-maximizing level of consumption of the two goods, the price of peanut butter falls. After he adjusts to this event, the marginal utility of peanut butter goes _____ and that of ice cream goes _____.
Answer:
The marginal utility of peanut butter goes down and that of ice cream goes up.
Explanation:
The substitution effect states that when the price of a product falls, it will lead to a rise in the quantity demanded of the product as buyers will buy more of the product that is now relatively cheaper.
And as more of a good is bought, its marginal utility falls. And as less of a product is bought, its marginal utility increases.
Based on the above explanation therefore, the marginal utility of peanut butter goes down and that of ice cream goes up after Kawamura adjusts to the event.
This is because as more of peanut butter is bought due to the fall in its price, its marginal utility falls. And as less of ice cream is bought as it is now relatively more expensive, its marginal utility increases.
Given below are several ratios. Select the accounts or amounts that would be used in order to calculate the ratio. You will have more than one response to each ratio. Some accounts or amounts may not be used at all. (Select all that apply.) Debt-to-equity ratio a.Cash paid for acquisitions b.Interest expense c.Total dividends paid d.Cash flow from operations before interest and tax payments e.Total stockholders' equity f.Net income g.Total liabilities h.Cash flow from operations
Answer:
Total stockholders' equity.Total liabilities.Explanation:
The Debt to equity ratio shows the proportions of the financing options used to finance the operations of the company namely debt and equity.
It is calculated by the formula:
= Total liabilities / Total stockholders' equity * 100%
As shown by the formula , the relevant accounts are:
Total stockholders' equity.Total liabilities.Monopoly in the competitive environment a. is enjoyed by few organizations as sole suppliers of a good or service. b. is typical of public utilities -- even more so now than twenty years ago. c. cannot be achieved temporarily even through the use of patents and similar legal devices. d. is the logical extension of a firm's control of its production and labor resources. e. is, all in all, the most common type of competition in the U.S. market.
Answer:
b
Explanation:
and services.
An example of a monopoly is a utility company
A natural monopoly occurs due to the high start-up costs or a large economies of scale.
Natural monopolies are usually the only company providing a service in a particular region
Because the demand curve for a monopoly is downward sloping, marginal revenue is less than price. As prices fall, more units of the product are bought.
In a monopoly When the average cost is falling, the marginal cost lies below the average cost. If the government sets price to be equal to marginal cost, which lies below the average cost, the monopoly would incur losses.
Periodic inventory by three methods The beginning inventory for Midnight Supplies and data on purchases and sales for a three-month period are shown below:
Number
Date Transaction of Units Per Unit Total
Jan. 1 Inventory 7,500 $75.00 10
Purchase 85.00 22,500 11,250
28 Sale $562,500 1,912,500 1,687,500
562,500 150.00 30 Sale 3,750 150.00
Feb. 5 Sale 1,500 150.00 225,000
10 Purchase 54,000 87.50 4,725,000
16 Sale 27,000 160.00 4,320,000
28 Sale 25,500 160.00 4,080,000
Mar. 5 Purchase 45,000 89.50 4,027,500
14 Sale 30,000 160.00 4,800,000
25 Purchase 7,500 90.00 675,000
30 Sale 26,250 160.00 4,200,000
1. Determine the inventory on March 31 and the cost of merchandise sold for the three-month period, using the first-in, first-out method and the periodic inventory system.
2. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system.
3. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the weighted average cost method and the periodic inventory system.
4. Compare the gross profit and the March 31 inventories, using the following column headings.
Answer:
1. We have:
Inventory on March 31 = $1,010,625
Cost of merchandise sold for the three-month period = $10,891,875
2. We have:
Inventory on March 31 = $881,250
Cost of merchandise sold for the three-month period = $11,021,250
3. We have:
Inventory on March 31 = $980,975.27
Cost of merchandise sold for the three-month period = $10,921,524.73
4. We have:
Details FIFO LIFO Weighted Average
$ $ $
Sales 19,875,000 19,875,000 19,875,000
Cost of Goods sold (10,891,875) (11,021,250) (10,921,525)
Gross Profit 8,983,125 8,853,750 8,953,475
Inventory, March 31 1,010,625 881,250 980,975
Explanation:
1. Determine the inventory on March 31 and the cost of merchandise sold for the three-month period, using the first-in, first-out method and the periodic inventory system.
Note: See part 1 of the attached excel file for the determined inventory on March 31 and the cost of merchandise sold for the three-month period, using the first-in, first-out method and the periodic inventory system.
From the part 1 of the attached excel file, we have:
Inventory on March 31 = $1,010,625
Cost of merchandise sold for the three-month period = $10,891,875
2. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system.
Note: See part 2 of the attached excel file for the determined inventory on March 31 and the cost of merchandise sold for the three-month period, using the last-in, first-out method and the periodic inventory system.
From the part 2 of the attached excel file, we have:
Inventory on March 31 = $881,250
Cost of merchandise sold for the three-month period = $11,021,250
3. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the weighted average cost method and the periodic inventory system.
Note: See part 3 of the attached excel file for the determined inventory on March 31 and the cost of merchandise sold for the three-month period, using the weighted average cost method and the periodic inventory system.
From the part 3 of the attached excel file, we have:
Inventory on March 31 = $980,975.27
Cost of merchandise sold for the three-month period = $10,921,524.73
4. Compare the gross profit and the March 31 inventories, using the following column headings.
Details FIFO LIFO Weighted Average
$ $ $
Sales 19,875,000 19,875,000 19,875,000
Cost of Goods sold (10,891,875) (11,021,250) (10,921,525)
Gross Profit 8,983,125 8,853,750 8,953,475
Inventory, March 31 1,010,625 881,250 980,975
What will happen when the country's
currency is undervalued?
Answer:
Ur answer is that When the U.S. dollar is undervalued, the cost of a basket of goods in the United States is lower than the cost in Mexico when evaluated at the current exchange rate. To a U.S. tourist, Mexican goods and services would seem more expensive on average. Thus an undervalued currency will buy less in other countries.
Explanation:
Hope i helped , have a nice day , and if it is possible to give me brainlest please , thank you in advance :)
how did you find the fv factor values
Answer:
v5th factor in solve......
Identify whether or not each of the following scenarios describes a competitive market, along with the correct explanation of why or why not.
a. In a small town, there are two providers of broadband Internet access: a cable company and the phone company. The Internet access offered by both providers is of the same speed.
b. The government has granted a patent to a pharmaceutical company for an experimental AIDS drug. That company is the only firm permitted to sell the drug.
c. Dozens of companies produce plain white socks. Consumers regard plain white socks as identical and don't care who manufactures their socks.
d. In a major metropolitan area, one chain of coffee shops has gained a large market share because customers feel its coffee tastes better than that of its competitors.
Answer:
1. not a competitive market
2. not a competitive market
3. competitive market
4. not a perfectly competitive market
Explanation:
To answer this question, i will first start by explaining what a competitive market is and the assumption of a perfectly competitive market as well
A competitive market is a market that has many producers and buyers of a particular product. The producers are usually in a competition to meet up with the needs of the buyers.
some assumptions of the market:
large sellers/producersidentical or homogenous goodsfree entryno discriminationperfect knowledgea. in this question this is not a competitive market. the reason is simple. It says that there are only two providers of internet. So there are no enough producers or sellers
b. The government has limited entry into this market by giving patent to only one pharmaceutical company.
c. yes this market is competitive since there are many producers of the product and the consumers regard the products as identical or homogenous. this meets with all of the assumptions of a perfectly competitive market.
d. the product here is not homogenous or identical as this is not a perfectly competitive market since buyers would prefer to buy the coffee that tastes better and leave that of the competitors
thank!
Everything else equal, if the United States runs a large foreign trade deficit, the financing of the deficit will: a. increase government subsidies. b. increase interest rates. c. decrease sales of Treasury securities. d. increase the money supply. e. decrease tax revenue.
Answer: decrease tax revenue
Explanation:
A trade deficit occurs when the import of a country's is more than the export of the country for a given period of time period. The main cause is when there's an imbalance between the savings of a country and the investment rates.
In this case, financing the deficit will lead to the reduction in the tax revenue. When part of the tax revenue gotten from economic agents are used in the finance of the deficit, there'll be a reduction in the tax revenue.
A state is conducting an examination of mortgage loan originator Basil Thyme. During the examination, the agency is authorized to do all of the following, except:a. Administer oaths or affirmationsb. Control access to Basil’s officec. Subpoena witnessesd. Require production of relevant documents
Answer: B. Control access to Basil’s office.
Explanation:
During the conduct of the examination of mortgage loan originator Basil Thyme, the agency is authorized to administer oaths or affirmations, subpoena witnesses and require production of relevant documents.
The agency cannot control the access to Basil's office. It can only control access to any records or documents of an individual whim is under investigation.
Suppose the ABC bank has excess reserves of $3,000 and checkable deposits of $50,000. If the reserve requirement is 20 percent, what is the size of the bank's actual reserves?
a. $53,000
b. $13,000
c. $10,000
d. $7,000
Answer:
b. $13,000
Explanation:
Calculation to determine the size of the bank's actual reserves
Using this formula
Actual reserves size=Excess reserves+(Checkable deposits*Reserve requirement)
Let plug in the formula
Actual reserves size=$3,000+(.20*$50,000)
Actual reserves size=$3,000+$10,000
Actual reserves size=$13,000
Therefore the size of the bank's actual reserves is $13,000
Which of the following is considered the process in the systems thinking example of a decision support system?
a. transaction
b. processing system.
c. optimization
d. forecasts
Answer: C. Optimization
Explanation:
In the decision making system, TPS is considered to be the input in the systems thinking example.
In the decision making system, optimization is considered to be the process in the systems thinking example.
In the decision making system, TPS is considered to be the input in the systems thinking example.
In the decision making system, a forecast is considered to be the output in the systems thinking example.
Gilmore, Inc., had equity of $135,000 at the beginning of the year. At the end of the year, the company had total assets of $290,000. During the year, the company sold no new equity. Net income for the year was $29,000 and dividends were $3,400. a. What is the sustainable growth rate for the company
Answer:
A. 18.96%
B. 18.96%
C. 15.94%
Explanation:
A. Calculation to determine the sustainable growth rate for the company
First step is to calculate the Ending equity
Ending equity = 135,000 + 29,000 -3,400
Ending equity=$160,600.
Second step is to calculate the return on equity
Return on equity =29,000/160,600
Return on equity=0.18057285
Third step is to calculate the retention ratio
Retention ratio =(Net income- dividends) / Net income
Retention ratio= (29,000-3400) / 29,000
Retention ratio=25,600 /29,000
Retention ratio=0.88275862.
Now let calculate the Sustainable growth rate using this formula
Sustainable growth rate = (Return on equity *Retention ratio) / [1-(Return on equity*retention ratio)]
Let plug in the formula
Sustainable growth rate=(0.18057285*0.88275862)/ [1-(0.18057285*0.88275862)]
Sustainable growth rate=0.15940224/ [1-0.15940224]
Sustainable growth rate=0.1896*100
Sustainable growth rate=18.96%.
b. Calculation to determine the sustainable growth rate if you use the formula ROE band beginning of period equity
First step is to calculate the return on equity using beginning of the period equity
Return on equity using beginning of the period equity=$29,000 /135,000
Return on equity using beginning of the period equity=0.21481481.
Now let calculate the sustainable growth rate if you use the formula ROE band beginning of period equity
roe * b = 0.21481481*0.88275862
ROE band=0.1896*100
ROE band=18.96%.
c.return on equity using ending of period equity = 29,000/160,600
=>0.18057285
roe*b=>0.18057285*0.88275862
=>0.1594
=>15.94%.
Your broker suggests that the stock of DUH is a good purchase at $25. You do an analysis of the firm, determining that the recent $1.40 dividend and earnings should continue to grow indefinitely at 5 percent annually. The firm's beta coefficient is 1.3, and the yield on Treasury bills is 1.4 percent. If you expect the market to earn a return of 8 percent, what is your valuation of DUH
Answer:
The correct answer is "$28.03".
Explanation:
The given values are:
Good purchase,
= $25
Dividend,
= $1.40
Annually earning,
= 5%
Beta coefficient,
= 1.3
Treasury bills,
= 1.4%
Now,
= [tex]1.4+1.34\times 8-1.4[/tex]
= [tex]1.34\times 8[/tex]
= [tex]10.244[/tex] (%)
hence,
The fair value will be:
= [tex]1.4\times \frac{1.05}{.10244}-.05[/tex]
= [tex]28.03[/tex]
Absolutely, the proposal including its brokerage must be adopted because as fair market value was almost $25.
A manufacturer produces two types of computer software, Word processing (W) and Spreadsheet (S), which is offered to two different retail outlets (#1 and #2). The following table shows the maximum price each retail outlet is willing to pay for each individual software product.
Product W Product S
Retail #1 $170 $105
Retail #2 $95 $135
What is the optimal pricing strategy that will maximize revenue for the manufacturer, given the maximum the retail outlets are willing to pay?
a. Bundle both products (W and S) and sell them at $275.
b. Price product W at $95 and Product S at $105.
c. Price product W at $170 and Product S at $170.
d. Price product W at $170 and Product S at $135.
e. Bundle both products (W and S) and sell them at $230.
Answer:
e. Bundle both products (W and S) and sell them at $230.
Explanation:
Calculation to determine the optimal pricing strategy that will maximize revenue for the manufacturer
Using this formula
Optimal pricing=Retail #2 Product W+ Retail #2 Product S
Let plug in the formula
Optimal pricing=$95+$135
Optimal pricing=$230
Therefore based on the above calculation the OPTIMAL PRICING STRATEGY that will MAXIMIZE REVENUE for the manufacturer, given the MAXIMUM the retail outlets are willing to pay will be to BUNDLE BOTH PRODUCTS (W and S) AND SELL THEM AT $230.
The net income reported on the income statement of Cutler Co. was $2,460,000. There were 50,000 shares of $18 par common stock and 20,000 shares of $5 preferred stock outstanding throughout the current year. The income statement included a gain on discontinued operations of $300,000 after applicable income tax.
a. Determine the per-share figure for common stock for income before discontinued operations. Round your answer to the nearest cent.
$ per share
b. Determine the per-share figure for common stock for net income. Round your answer to the nearest cent.
$ per share
Answer and Explanation:
The computation is shown below:
a. The earning per share is
= (PAT - income tax discontinued operations - Preference dividend) ÷ number of common stock
= ($2,460,000 - $300,000 - (20,000 × $5)) ÷ (50,000 shares)
= $41.2 per share
b. The earning per share is
= (PAT - Preference dividend) ÷ number of common stock
= ($2,460,000 - (20,000 × $5)) ÷ (50,000 shares)
= $47.2 per share
Mendez Company is considering a capital project that costs $16,000. The project will deliver the following cash flows: Year 1 Year 2 Year 3 Year 4 Year 5 $8,000 $6,000 $5,000 $6,000 $5,000 Using the incremental approach, the payback period for the investment is:
Answer:
2.4 years
Explanation:
Years Cash Cumulative Cashflow
1 8000 8000
2 6000 14000
3 5000 19000
4 4000 25000
5 5000 30000
30000
Payback period = 2 years + (16,000 - 14,000) / 5,000
Payback period = 2 years + 0.4 years
Payback period = 2.4 years
For each transaction:
a. analyze the transaction using the accounting equation
b. record the transaction in journal entry form
c. post the entry using T-accounts to represent ledger accounts.
1. On May 15, DeShawn Tyler opens a landscaping company called Elegant Lawns by investing $7,000 in cash along with equipment having a $3,000 value in exchange for common stock.
2. On May 21, Elegant Lawns purchases office supplies on credit for $500.
3. On May 25, Elegant Lawns receives $4,000 cash for performing landscaping services.
4. On May 30, Elegant Lawns receives $1,000 cash in advance of providing landscaping services to a customer.
Answer:
Elegant Lawns
a. Analysis of transactions using the accounting equation:
1. May 15, Assets Cash $7,000 Equipment $3,000 Equity: Common stock $10,000
2. May 21, Assets: Office supplies $500 Liabilities: Accounts Payable $500
3. May 25, Assets: Cash $4,000 Equity: Service Revenue $4,000
4. May 30, Assets: Cash $1,000 Equity: Service Revenue $1,000
b. Journal Entries:
Date Account Titles Debit Credit
1. May 15, Assets: Cash $7,000
Assets: Equipment $3,000
Equity: Common stock $10,000
2.
May 21, Assets: Office supplies $500
Liabilities: Accounts Payable $500
3. May 25, Assets: Cash $4,000
Equity: Service Revenue $4,000
4. May 30, Assets: Cash $1,000
Equity: Service Revenue $1,000
c. T-accounts:
Cash
Date Account Titles Debit Credit
1. May 15 Common stock $7,000
3. May 25, Service revenue 4,000
4. May 30, Service revenue 1,000
Equipment
Date Account Titles Debit Credit
1. May 15 Common stock $3,000
Office Supplies
Date Account Titles Debit Credit
2. May 21, Accounts Payable $500
Common Stock
Date Account Titles Debit Credit
1. May 15 Cash $7,000
1. May 15 Equipment 3,000
Accounts Payable
Date Account Titles Debit Credit
2. May 21, Office supplies $500
Service Revenue
Date Account Titles Debit Credit
3. May 25, Cash $4,000
4. May 30, Cash 1,000
Explanation:
a) Data and Analysis with Accounting Equation:
1. May 15, Assets Cash $7,000 Equipment $3,000 Equity: Common stock $10,000
2. May 21, Assets: Office supplies $500 Liabilities: Accounts Payable $500
3. May 25, Assets: Cash $4,000 Equity: Service Revenue $4,000
4. May 30, Assets: Cash $1,000 Equity: Service Revenue $1,000
Workman Software has 11 percent coupon bonds on the market with 19 years to maturity. The bonds make semiannual payments and currently sell for 108.3 percent of par. a. What is the current yield on the bonds
Answer:
10.16%
Explanation:
Coupon amount = 11% * 1000
Coupon amount = $110
Price of bond = 1000*108.3%
Price of bond = $1,083
Current yield = Coupon amount / Price of bond
Current yield = $110 / $1,083
Current yield = 0.1015697
Current yield = 10.16%
So, the current yield on the bonds is 10.16%.
Given that the DM price of the ECU was 2.0583 and the DG price of the ECU was 2.3194. Then the DG price of the DM by cross rates is given by:______
a. DM = about 4.73 DG.
b. DM = about .26 DG.
c. DM = about 1.13 DG.odno
d. DM = about .89 DG.
Answer:
Option c (DM = about 1.13 DG) is the right approach.
Explanation:
Given:
DM price,
= 2.0583
DG price,
= 2.3194
Now,
By cross rates, the DG price of DM will be:
= [tex]\frac{2.3194}{2.0583}[/tex]
= [tex]1.13[/tex]
Thus the above is the correct option.
Could anyone help with this question?
Select the behavior related to dress or posture that will be most effective in helping Shawna accomplish her goals.
a. Shawna clasps her hands behind her back so that the audience cannot see them shaking, and to project confidence.
b. Shawna has her formal gown dry-cleaned so that it will be ready for her to wear at the event.
c. Shawna crosses her arms to appear powerful and in charge.
d. Shawna wears a hard hat and kitchen apron to emphasize the hard work done by volunteers.
Answer: b. Shawna has her formal gown dry-cleaned so that it will be ready for her to wear at the event
Explanation:
The behavior that's related to dress or posture that will be most effective in helping Shawna accomplish her goals is that Shawna has her formal gown dry-cleaned so that it will be ready for her to wear at the event.
Unlike other options such as her clasping her hands behind her back so that the audience cannot see them shaking, and to project confidence and her crossing her arms to appear powerful and in charge, having her dress ready for the event is appropriate as it will help achieve her goal
Therefore, the correct option is B.
Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 25 $ 10 Direct labor 22 21 Variable manufacturing overhead 17 7 Traceable fixed manufacturing overhead 18 20 Variable selling expenses 14 10 Common fixed expenses 17 12 Total cost per unit $ 113 $ 80 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. 9. Assume that Cane expects to produce and sell 82,000 Alphas during the current year. A supplier has offered to manufacture and deliver 82,000 Alphas to Cane for a price of $88 per unit. What is the financial advantage (disadvantage) of buying 82,000 units from the supplier instead of making those units
Answer:
Cane Company
The financial advantage of buying 82,000 units from the supplier instead of making those units is:
= $656,000.
Explanation:
a) Data and Calculations:
Alpha Beta
Selling price $130 $90
Annual production capacity 102,000 102,000 units
Direct materials per unit $25 $10
Direct labor 22 21
Variable manufacturing overhead 17 7
Traceable fixed manufacturing overhead 18 20
Variable selling expenses 14 10
Common fixed expenses 17 12
Total cost per unit $ 113 $ 80
Cost of Alphas Make Buy Difference
Direct materials per unit $25
Direct labor 22
Variable manufacturing overhead 17
Traceable fixed manufacturing overhead 18
Variable selling expenses 14
Total cost per unit $ 96 $ 88 $ 8
Expected production/sales and purchase 82,000 82,000 82,000
Total cost or producing or buying $7,872,00 $7,216,000 $656,000
