Answer:
$4.50 and =$9.00
Explanation:
Consumer surplus is the difference between what a consumer is willing to pay for a good or service and its market price.
i.e., Consumer surplus = maximum willing price - actual price
Mary is willing to pay $38.00, and the market price is $33.50 .
The consumer surplus = $38 - $33.50
=$4.50
If Mary buys a second bracelet, total consumer surplus would be
=$4.50 x 2
=$9.00
On January 1, 2019, Sandhill Corporation acquired machinery at a cost of $1290000. Sandhill adopted the double-declining balance method of depreciation for this machinery and had been recording depreciation over an estimated useful life of ten years, with no residual value. At the beginning of 2022, a decision was made to change to the straight-line method of depreciation for the machinery. The depreciation expense for 2022 would be
Answer:
$94,354.29
Explanation:
Depreciation rate = 100/10*2 = 20%
2019 Depreciation = 1290000 * 20% = $258000
2020 Depreciation = 1290000 * 80% * 20% = $206400
2021 Depreciation = 1290000 * 80% * 80% * 20% = $165120
Accumulated depreciation (2019 to 2021) = $258000 + $206400 + $165120 = $629,520
Depreciation expense for 2022 = (1290000 - 629,520) / 7
Depreciation expense for 2022 = 660480 / 7
Depreciation expense for 2022 = $94,354.29
Watunga County Bank agrees to lend Vaughn Granite Company $599000 on January 1. Vaughn Granite Company signs a $599000, 8%, 9-month note. The entry made by Vaughn Granite on January 1 to record the proceeds and issuance of the note is
Cash 599000
Interest Expense 35940
Notes Payable 599000
Interest Payable 35940
Interest Expense 35940
Cash 563060
Notes Payable 599000
Cash 599000
Notes Payable 599000
Cash 599000
Interest Expense 35940
Notes Payable 634940
What is the adjusting entry requited if Hoffman Granite Company prepares financial statements on June 30th?
Answer:
DR Cash $599,000
CR Notes Payable $599,000
Explanation:
As this is the entry for the issuance of the note, interest will not be recorded as it is incurred as during the loan period.
Entry will be;
Date Details Debit Credit
Jan 1 Cash 599,000
Notes Payable 599,000
Brad's Diner is expanding and expects operating cash flows of $32,000 a year for 4 years as a result. This expansion requires $39,000 in new fixed assets. These assets will be worthless at the end of the project. In addition, the project requires $3,000 of net working capital throughout the life of the project. What is the net present value of this expansion project at a required rate of return of 12 percent
Answer: $57,101.73
Explanation:
First find the present value of the cash inflows. The $32,000 is a constant payment so is an annuity. The net working capital will be realized at the end of the project as well.
Present value of cash inflows = (32,000 * Present value interest factor of an annuity, 4 years, 12%) + 3,000/ (1 + 12%)⁴
= (32,000 * 3.0373) + 1,906.55
= $99,101.73
NPV = Present value of inflows - Outflows
= 99,100.15 - (39,000 + 3,000)
= $57,101.73
If you have done everything correctly, you might realize that stagflation creates a dilemma for the Fed. Why? Choose one or more: A. If the Fed wants to reduce unemployment, it must be willing to accept more inflation. B. If the Fed wants to reduce inflation, it must be willing to accept higher unemployment. C. If the Fed wants to reduce unemployment, it must be willing to accept less inflation. D. If the Fed wants to reduce inflation, it must be willing to accept lower unemployment.
Answer:
A. If the Fed wants to reduce unemployment, it must be willing to accept more inflation.
B. If the Fed wants to reduce inflation, it must be willing to accept higher unemployment.
Explanation:
Stagflation is a situation in which there is a shift of the supply curve to the left that results in a high inflation due to which there is a high unemployement. Now if the fed wants to reduce the inflation so the demand would decline due to which the unemployment rises
Therefore A and B are correct
And C and D are incorrect
Answer:
The Federal Reserve seeks to control inflation by influencing interest rates. When inflation is too high, the Federal Reserve typically raises interest rates to slow the economy and bring inflation down.
Explanation:
When screening prospective new ventures, venture capital firms must consider the nature of the proposed industry Which of the following is not part of the screening of the proposed industry?
a. market attractiveness
b. managerial references
c. potential size
d. technology
e. threat resistance
Answer:
B
Explanation:
Venture capital firms are firms that invest in start up firms.
Venture capital firms use large amount of capital to fund their operations and so must be assured of the market attractiveness of the firm before undertaking the project to ensure profitability.
Potential size of the new venture has to be determined so as to ascertain the financial resources that would be needed.
Threat of resistance can reduce profitability and should also be considered.
An all-equity firm is considering the following projects: Project Beta IRR W .63 9.4 % X .76 10.5 Y 1.29 14.0 Z 1.40 17.1 The T-bill rate is 5.1 percent, and the expected return on the market is 12.1 percent. a. Which projects have a higher/lower expected return than the firm’s 12.1 percent cost of capital? b. Which projects should be accepted? c. Which projects will be incorrectly accepted/rejected or correctly accepted/rejected if the firm's overall cost of capital were used as a hurdle rate?
Answer:
Project Beta IRR project's cost of equity
W .63 9.4% = 5.1% + (0.63 x 7%) = 9.51%
X .76 10.5% = 5.1% + (0.76 x 7%) = 10.42%
Y 1.29 14.0% = 5.1% + (1.29 x 7%) = 14.13%
Z 1.40 17.1% = 5.1% + (1.40 x 7%) = 14.9%
the company's cost of capital = 12%
a. Which projects have a higher/lower expected return than the firm’s 12.1 percent cost
of capital?
higher expected return ⇒ projects Y and Z lower expected return ⇒ projects W and Xb. Which projects should be accepted?
accepted ⇒ projects X and Z (their IRR is higher than their Re) rejected ⇒ projects W and Y (their IRR is lower than their Re)c. Which projects will be incorrectly accepted/rejected or correctly accepted/rejected if the firm's overall cost of capital were used as a hurdle rate?
if the company uses its cost of capital, then it would incorrectly reject project W and incorrectly accept project YHP20 Corporation is considering permanently shutting down a department that has an annual contribution margin of $30,000 and $70,000 in annual fixed costs.
Of the fixed costs, $12,000 cannot be avoided.
What would be the annual financial advantage (disadvantage) for HP20 Corporation. if the company shuts down the department?
Answer: Financial advantage of $28,000
Explanation:
The segment margin is;
= Contribution margin - fixed costs + unavoidable fixed cost
= 30,000 - 70,000 + 12,000
= -$28,000
Eliminating the department would eliminate the negative segment margin of $28,000 which means that net income will increase by that much making it a financial advantage.
The following note transactions occurred during the year for Towell Company: Nov. 25 Towell issued a 90-day, 10% note payable for $80,000 to Hyatt Company for merchandise. Dec. 7 Towell signed a 120-day, 9% note at the bank for $120,000. Dec. 22 Towell gave Barr, Inc., a 60-day, 9%, $120,000 note for payment of account. Prepare the general journal entries necessary to adjust the interest accounts at December 31. Use 360 days for calculations and round to the nearest dollar.
Answer:
Towell Company
Journal Entries:
Debit Interest Expense $1,790
Credit Interest Payable $1,790
To record the interest expense for the year.
Explanation:
a) Data and Calculations:
i) Nov. 25: Issue of 90-day, 10% Note Payable = $80,000
Interest on the note for the year = $80,000 * 10% * 36/360 = $800
ii) Dec. 7: Issue of 120-day, 9% Note Payable = $120,000
Interest on the note for the year = $120,000 * 9% * 24/360 = $720
iii) Dec. 22: Issue of 60-day, 9% Note Payable = $120,000
Interest on the note for the year = $120,000 * 9% * 9/360 = $270
Total interest payable for the year = $1,790
Eaglet Corporation has the following target and costs associated with its capital structure. Based on these parameters what is Eaglet Corporations weighted average cost of capital?
Target common equity weight: 80 percent
Target debt weight: 20 percent
Cost of equity: 15 percent
Cost of debt: 5 percent
Tax rate: 35 percent
A) WACC = 12.65 percent
B) WACC = 8.45 percent
C) WACC = 13.00 percent
Answer: A) WACC = 12.65 percent
Explanation:
WACC = (Cost of equity * weight of equity) + (weight of debt * cost of debt * (1 - tax rate)
= (0.15 * 0.8) + (0.2 * 0.05 * (1 - 0.35))
= 0.12 + 0.0065
= 12.65%
Adams Company is a manufacturing company that has worked on several production jobs during the first quarter of the year. Below is a list of all the jobs for the quarter: Job. No. Balance 356 $ 450 357 1,235 358 378 359 689 360 456 Jobs 356, 357, 358, and 359 were completed. Jobs 356 and 357 were sold at a profit of $500 on each job. What is the balance of Sales for Adams Company at the end of the first quarter
Answer: $2,685
Explanation:
For the balance of Sales, look at Jobs that were sold in the first quarter.
Jobs 356 and 357.
They were sold at $500 profit each.
Balance of sales = (450 + 500) + (1,235 + 500)
= $2,685
On August 1, 2020, Ascent Corp. borrowed $80,000 cash on an 8-month note payable with a 7% annual rate that requires Ascent to pay all the interest and principal on April 1, 2021. Assuming the necessary adjusting entry to accrue interest expense was properly recorded on December 31, 2020, the journal entries to record the payment of interest on April 1, 2021 will include a (Round to the nearest whole dollar, if necessary):
Answer and Explanation:
The computation is shown below:
Interest payable:
= Borrowed amount × rate of interest × given months ÷ total months
= $80,000 × 7% × 5 ÷ 12
= $2,333.33
And,
Interest expense:
= Borrowed amount × rate of interest × given months ÷ total months
= $80,000 × 7% × 3 ÷ 12
= $1,400
So here for recording the payment of interest the interest payable is debited for $2,333.33
The same is to be considered
Suppose your company needs $43 million to build a new assembly line. Your target debt-equity ratio is .65. The flotation cost for new equity is 6 percent and the flotation cost for debt is 2 percent. Your boss has decided to fund the project by borrowing money because the flotation costs are lower and the needed funds are relatively small. a. What do you think about the rationale behind borrowing the entire amount?
Answer: See explanation
Explanation:
Debt = 0.65
Weight = 39.39%
Cost for debt = 2%
Product = 39.39% × 2%
= 0.3939 × 0.02
= 0.007878
Equity = 1.00
Weight = 60.61%
Cost for equity = 6%
Product = 60.61% × 6%
= 0.6061 × 0.06
= 0.036366
Weighted average floatation cost:
= 0.007878 + 0.036366
= 0.044244
= 4.42%
The true cost of the building will then be:
= Funds needed / (1 - Floatation cost)
= $43,000,000 / (1 - 0.044244)
= $43,000,000 / 0.955756
= $44,990,562
ABC Company and XYZ Company entered into a nonmonetary exchange lacking commercial substance. In the exchange, ABC gave XYZ a building with a book value of $90,000 ($150,000 cost - $60,000 accumulated depreciation) and a fair value of $125,000 in exchange for $25,000 and an XYZ building with a book value of $80,000 ($95,000 cost - $15,000 accumulated depreciation) and a fair value of $100,000. Prepare the journal entry to record the exchange in ABC's and XYZ's books.
Answer:
New Building Acquired at Carrying Amount $90,000 (debit)
Accumulated Depreciation on Building given up $60,000 (debit)
Cost of Building given up $150,000 (credit)
Explanation:
Where the exchange transaction lacks commercial substance, the asset that is acquired is measured at the carrying amount (Cost less Accumulated Depreciation) of the asset given up, and no gain or loss cannot be estimated reliably.
The Building with Carrying Amount of $90,000 ($150,000 cost - $60,000 accumulated depreciation).
Thus the Journal will be :
New Building Acquired at Carrying Amount $90,000 (debit)
Accumulated Depreciation on Building given up $60,000 (debit)
Cost of Building given up $150,000 (credit)
Solve for the unknown number of years in each of the following (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.):
Present Value Years Interest Rate Future Value
$600 8% $1,393
850 12 2,330
18,800 18 367,247
21,900 14 382,983
Answer:1)10.94years , 2.) 8.90 years 3) 17.96years 4) 21.84years
Explanation:
Using the formula
FV = PV (1 + r)ⁿ
where
PV=present value
r=interest rate
n =number of periods
FV = future value.
Present Value Years Interest Rate Future Value
$600 ? 8% $1,393
850 ? 12 2,330
18,800 ? 18 367,247
21,900 ? 14 382,983
Using FV = PV (1 + r)ⁿ, The number of years can be calculated
FV/PV = (1 + r)ⁿ
FV/PV/ 1+r = eⁿ
In FV/PV / In ( 1+ r) = n
1)
n ( Number of years )=In FV/PV / In ( 1+ r)
=In ( 1,393/600) / In ( 1+ 0.08)
0.84228/0.07696
=10.94years
2.
n ( Number of years )=In FV/PV / In ( 1+ r)
=In (2330/850) / In ( 1+ 0.12)
1.00837625/0.113328685
=8.90 years
3.
n ( Number of years )=In FV/PV / In ( 1+ r)
=In (367,247/ 18,800) / In ( 1+ 0.18)
2.97217778/0.165514438
=17.96years
4.
n ( Number of years )=In FV/PV / In ( 1+ r)
=In ( 382,983/ 21,900) / In ( 1+ 0.14)
2.86150396/0.131028262
=21.84 years
ABC Company has completed the basic format to be used in preparing the statement of cash flows (indirect method). Listed below in random order are line items to be included in the statement of cash flows.
Purchase of equipment $2,210
Decrease in inventory 253
Increase in prepaid rent 75
Payment of dividends 360
Depreciation expense 184
Increase in accounts receivable 530
Increase in accounts payable 160
Gain on sale of land 136
Net income 1,878
Repayment of notes payable 493
Cash received from the sale of land 67
Issuance of common stock 2,440
Required:
1. What is the net cash provided by operating activities?
a. $926 Inflow.
b. $1,198 Inflow.
c. $420 Inflow.
d. $324 Inflow.
2. What is the net cash provided by Investing activities?
a. $2,143 outflow.
b. $2,279 outflow.
c. $1,959 outflow.
d. $2,095 outflow.
3. What is the net cash flow by financing activities?
a. $1,587 Inflow.
b. $1.947 Inflow.
c. $2,080 Inflow.
d. $2,440 Inflow.
Answer:
1. b. $1,198 Inflow
2. a. $2,143 outflow
3. a. $1,587 Inflow.
Explanation:
Determination of net cash provided by operating activities
$
Cash flow from Operating Activities
Net income 1,878
Adjust for :
Depreciation expense 184
Decrease in inventory 253
Increase in prepaid rent (75)
Increase in accounts receivable (530)
Increase in accounts payable 160
Gain on sale of land (136)
Net cash provided by operating activities 1,734
Determination of net cash provided by Investing activities
$
Cash flow from Investing Activities
Purchase of equipment (2,210)
Cash received from the sale of land 67
Net cash provided by Investing activities (2,143)
Determination of net cash flow by financing activities
$
Cash flow from Financing Activities
Payment of dividends (360)
Issuance of common stock 2,440
Repayment of notes payable (493)
Net cash flow by financing activities 1,587
BlueInk Corporation's accumulated depreciation increased by $14,000, while parents decreased by $3,875 between consecutive balance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition, the income statement showed a loss on sale of land of $1,950. Accounts receivable increased $6,320, inventory decreased $3,125, prepaid expenses decreased $720, and account payable increased $2,760. Reconcile a net income of $55,000 to net cash flow from operating activities.
Answer:
$69,285
Explanation:
Reconcilation of the net income of net cash flow from operating activities.
Cash flow from operating activities
Net income $55,000
Adjustments made to reconcile:
Add: Depreciation expense $14,000
Less Increase in account receivable ($6,320)
Add Decrease in inventory $3,125
Add Decrease in prepaid expense $720
Add Increase in account payable $2,760
Net cash flow from operating activities $69,285
Therefore the net income of net cash flow from operating activities will be $69,285
Gradwell, Inc., manufactures and sells two products: Product K8 and Product I4. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:
Expected Direct labor hours Total direct labor hours
production per unit
product K8 300 5.0 1,500
product I4 900 3.0 2,700
total direct labor hours 4,200
The direct labor rate is $17.20 per DLH. The direct materials cost per unit for each product is given below:
Direct materials
cost per unit
product K8 $150.20
product I4 $243.70
The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
Estimated Expected activity
Activity Cost Pools Activity Measures Overhead
Cost Product K8 Product I4 Total
labor related DLHs $176,064 1,500 2,700 4,200
machine setups setups 71,290 400 600 1,000
order size MHs 121,396 4,300 4,600 8,900
$368,750
The overhead applied to each unit of Product I4 under activity-based costing is closest to:_______.
a. $543.49 per unit.
b. $675.20 per unit.
c. $736.36 per unit.
d. $431.71 per unit.
Answer:
Gradwell, Inc.
The overhead applied to each unit of Product I4 under activity-based costing is closest to:_______.
$243.00 per unit.
Explanation:
a) Data and Calculations:
production per unit DL rate Total Labor Cost
product K8 300 5.0 1,500 $17.20 $25,800
product I4 900 3.0 2,700 $17.20 $46,440
total direct labor hours 4,200 $17.20 $72,240
production per unit Direct Materials Total Material Cost
product K8 300 $150.20 $45,060
product I4 900 $243.70 219,330
Total direct materials costs = $264,390
Estimated Expected activity
Activity Cost Pools Activity Measures Overhead Product Product Total
Cost K8 I4
labor related DLHs $176,064 1,500 2,700 4,200
machine setups setups 71,290 400 600 1,000
order size MHs 121,396 4,300 4,600 8,900
Total $368,750
Overhead Cost Allocation Product Product Total
K8 I4
Labor cost $62,880 $113,184 $176,064
Machine setups 28,516 42,774 71,290
Order size 58,652 62,744 121,396
Total $150,048 $218,702 $368,750
Quantity 300 900
Overhead per unit $500.16 $243.00
You are trying to estimate the value of the XYZ Inc. company, as of the end of 2019. The after-tax cashflow from assets (FCFF) for the year ending 2019 is $126 million. The estimated WACC is 11%. What comes closest to the current value of the firm XYZ if the expected after-tax cashflows to assets for the next two years are expected to grow at 15% and then grow at a lower rate of 2% thereafter forever?
Answer:
$ 1,798.56
Explanation:
The current value of the firm is the discounted after-tax cashflow from assets as well as the terminal after-tax cashflows as shown below:
2020 FCFF=$126 million*(1+15%)=$144.90 million
2021 FCFF=$126 million*(1+15%)^2=$166.64 million
Terminal value=2021 FCFF*(1+g)/(WACC-g)
g=terminal growth rate of FCFF=2%
WACC=11%
Terminal value=$166.64 million*(1+2%)/(11%-2%)=$ 1,888.53 million
current value of firm=$144.90 million/(1+11%)^1+$166.64 million/(1+11%)^2+$ 1,888.53 million/(1+11%)^2
current value of firm=$ 1,798.56
All of the following actions lead to the payment of a credit card fee EXCEPT...
I need the picture so I can see it
Answer:
D
Explanation:
paying your credit card bill in full and on time every month
paying your bills on time is a great way to create a good credit score so paying what you owe wont get you a fee since your doing a good thing.
When a cable company is awarded sole possession to franchise in a community, that franchise is now a: Group of answer choices
Answer:
l think lt can be some problems._
You are purchasing a home for $220,000. The down payment is 30% and the balance will be financed with a 20-year mortgage at 9% and 2 discount points. You put down a deposit of $5,000 (applied to the down payment) when the sales contract was signed. You also have these expenses: credit report, $70; appraisal fee, $110; title insurance premium, 1% of amount financed; title search, $225; and attorney's fees, $600. Find your amount due at the closing.
Based on the various payments on the home, the amount due at closing is $66,625.
What is the amount due on closing?$5,000 has already been taken from the down payment which leaves:
= 30% x 220,000 - 5,000
= $61,000
Loan amount is:
= (1 - 30%) x 220,000
= $154,000
Closing amount is:
= 61,000 + 70 + 110 + (1% x $154,000) + 225 + 600 + (2% discount points x 154,000)
= $66,625
Find out more on closing costs at https://brainly.com/question/26133271.
Even though the moving averages help highlight the long-run trend of a time series, the moving-average model is not designed for making forecasts in the presence of trends. Explain the reason why we should not rely on moving averages for predicting future observations of a trending series.
Answer:
Moving averages cannot be used to make future forecasts successfully because certain events like demand, supply ,quality and external factors such as competitions cannot be determined with the use of Moving averages, and these factors have a huge impact on prices
Explanation:
Moving averages are generated / obtained using data from events that occurred previously hence they highlight the long-run trend of a time series, but they cannot be used to make future forecasts successfully because certain events like demand, supply ,quality and external factors such as competitions cannot be determined with the use of Moving averages. and these factors have a huge impact on prices
if you cause damage to your apartment, your landlord can
Answer:
...send you out for vandalizing the property?? i dunno lol
Explanation:
Answer:
you could get evicted
Explanation:
Scenario:
Suppose that in the competitive market for auto repair, firms prefer to hire men rather than women Assume that the women applying for positions have the same skills, experience, and work ethic as the men. As a result of this discrimination, the demand for women is lower than it otherwise would be.
Refer to Scenario above. If the firms in this market are profit maximizers and customers do not care if a woman or a man works on their car, what will likely happen?
Answer:
If the firms want to maximize profit and they are price takers, they will eventually start hiring more women. Since the demand for female workers is lower, the price of their labor should also be lower. That means that if a firm wants to maximize its profits, it will need to decrease its costs. A way to decrease a company's costs is to hire cheaper labor.
When people who earn higher incomes pay higher taxes, this represents what role of government?
a supervisory body
one that reallocates income
an entrepreneurship
a source of public good
Answer:
one that reallocates income
Felipe died on May 9, 2016. At date of death he owned the following assets:• Cash in the bank: $12,000• ABC Bonds: Fair market value $5,000• Office building: Fair market value, $300,000• Stock in Leck Corporation: Fair market value, $10,000• Personal residence (jointly held with his spouse): Fair market value, $160,000.
In addition, accrued rents on the office building to date of death is $24,000; accrued interest on the bonds at date of death is $200; $400 in dividends are outstanding on the Leck stock (date of record April 30, 2016). Felipe's gross estate is $__________.
Answer:
$431,600
Explanation:
Calculation of Gross Estate of Felipe
Items Amount($)
Cash at bank $12,000
ABC BOND $5,000
Office building $300,000
Stock in Leck Corporation $10,000
Personal residence (50% include) $80,000
Accrued rent on office building $24,000
Accrued rent on bond $200
Outstanding dividend $400
Gross estate $431,600
Germany is capital abundant country and Japan is labor abundant country. If computers are produced mostly by capital and beer is produced mostly by labor, the H-O model predicts that Question 22 options: Japan will export computers in exchange for beer. Germany will export computers in exchange for beer. Germany is too small to be of economic interest to Japan. Computers and beer don't mix, so trade cannot increase either country's well-being.
Answer:
If computers are produced mostly by capital and beer is produced mostly by labor, the H-O model predicts that
Germany will export computers in exchange for beer.
Explanation:
The H-O model or Heckscher-Ohlin theory is an economic model about the comparative advantages of nations in international trade. The model tries to explain the equilibrium of trade existing between two countries that have varying specialties and natural resources. According to the H-O model, countries export more goods and services for which they have plenty resources than they do for goods and services for which they have scarce resources. For example, if a country has capital in abundance, it will export more of capital-intensive products while it will import labor-intensive products, because it has scarce labor resources.
Cypgef 252 Corporation has two products, Beautiful and Gorgeous. In the last period, the Cypgef252 Corporation's net operating income was $20,500, and the common fixed expenses were $45,000. (ID#56034) The contribution margin ratio for Product Beautiful was 40%, its sales were $130,000, and its segment margin was $37,000. Q: If the contribution margin for Product Gorgeous was $35,000, what was the segment margin for Product Gorgeous?
A. $28,500
B. $37,000
C. $8,000
D. $65,500
Answer:
segment margin Gorgeous= $28,500
Explanation:
Giving the following information:
Beatiful:
Segment margin= $37,000
Net income= $20,500
Common fixed costs= $45,000
To calculate the segment margin of Gorgeous, we need to use the following formula:
Net income= segment margin Beatiful + segment margin Gorgeous - common fixed costs
20,500= 37,000 + segment margin Gorgeous - 45,000
segment margin Gorgeous= $28,500
A producer of felt-tip pens has received a forecast of demand of 41,000 pens for the coming month from its marketing department. Fixed costs of $26,000 per month are allocated to the felt-tip operation, and variable costs are 35 cents per pen.
a. Find the break-even quantity if pens sell for $1 each.
b. At what price must pens be sold to obtain a monthly profit of $16,000, assuming that estimated demand materializes?
Answer and Explanation:
The computation is shown below:
a. The break even quantity is
= Fixed cost ÷ (selling price per unit - variable cost per unit)
= $26,000 ÷ ($1 - 0.35)
= $26,000 ÷ 0.65
= 40,000
b. The price is
Let us assume the price per pen be x
As we know that
Profit = Revenue - costs
$16,000 = (x)(41,000) - $26,000 - .35(41,000)
$16,000 = 41,000x - 40,350
$56,350 = 41,000x
x = $1.37
Point D on the graph represents which phase of the business cycle?
Answer:
Contraction
Explanation:
Just took the Test