Given Information:
Rent = $20,000,000
Materials and Wages = $10,000/tractor
Number of tractors = 2,000
Amount spent on R&D = $3 million
Required Information:
Lowest price to sell atractor= ?
Answer:
Lowest price to sell atractor= at least $20,000
Calculations & Explanation:
The company needs to sell at least at a price that all of its manufacturing cost can be recovered without the profit margin.
This happens at a break-even point where total revenue equals the total manufacturing cost.
Total manufacturing cost = Total revenue
The revenue is number of tractors multiplied by some price x
Total revenue = 2,000*x
Total manufacturing cost = fixed cost + Variable cost
Total manufacturing cost = 20,000,000 + 2,000(10,000)
Total manufacturing cost = 20,000,000 + 20,000,000
Total manufacturing cost = 40,000,000
so,
Total manufacturing cost = Total revenue
40,000,000 = 2,000*x
x = 40,000,000/2,000
x = $20,000
Therefore, the lowest price to sell each tractor should be atleast $20,000
Note: The R&D cost is not usually included in such scenarios because R&D cost is sunk and should not be added in these calculations.
Answer:
$984,061.12
Explanation:
The computation of sales revenue under the worst-case scenario is shown below:-
Sales revenue under the worst-case scenario = Quantity sold × Price
= (1,600 - 1,600 × 3%) × ($647 - $647 × 2%)
= (1,600 - 48) × ($647 - 12.94)
= 1,552 × 634.06
= $984,061.12
Therefore for computing the sales revenue under the worst-case scenario we simply applied the above formula.
Answer:
C. $77,000
Explanation:
Calculation for the amount of liabilities
Using this formula
Amount of liabilities=(Cash+Account receivable +Equipment) -Equity
Let plug in the formula
Amount of liabilities=($39,000+$45,000+$80,000)-$87,000
Amount of liabilities=$164,000-$87,000
Amount of liabilities=$77,000
Therefore the Amount of liabilities will be $77,000
To determine the company's liabilities, you apply the fundamental accounting equation (Assets = Liabilities + Equity). In this case, the total liabilities amount to $77,000.
The amount of liabilities a company has can be determined by a key equation in financial accounting: Assets = Liabilities + Equity. This company's total assets are calculated as follows: cash ($39,000) + accounts receivable ($45,000) + equipment ($80,000) = $164,000. Knowing this and considering that Equity is $87,000, we can rearrange the equation to solve for Liabilities: Liabilities = Assets - Equity, which results in: Liabilities = $164,000 - $87,000 = $77,000. So the answer is C. $77,000.
#SPJ6
$
6.50
Direct labor
$
6.60
Variable manufacturing overhead
$
3.75
Fixed manufacturing overhead
$
3.45
An outside supplier offered to supply RST Company this part at $18 per unit. If RST Company decides not to make the parts, there would be no other use for the production facilities and none of the fixed manufacturing overhead cost could be avoided. Direct labor is a variable cost. The annual financial advantage (disadvantage) for the company as a result of buying these parts from the outside supplier rather than making them internally would be:
($186,200)
($87,400)
($43,700)
$87,400
Answer:
($43,700)
Explanation:
38,000 units produced:
outside supplier offers parts at $18 per unit
fixed manufacturing overhead is unavoidable
Alternative 1 Alternative 2 Differential
keep producing buy amount
Prod. cost $771,400 $0 $771,400
Purchase cost $0 $684,000 ($684,000)
Unavoidable costs $0 $131,100 ($131,100)
total $771,400 $815,100 ($43,700)
The financial disadvantage of purchasing the parts from an outside vendor = ($43,700)
a. 2/3 gallon
b. 5/7 gallon
c. 1 1/2 gallons
d. 1 2/5 gallons
of root beer, and Susan's opportunity cost of making a pizza is ?
a. 2/3 gallon
b. 5/7 gallon
c. 1 1/2 gallons
d. 1 2/5 gallons
of root beer.
Who has an absolute advantage in making pizza, and who has a comparative advantage in making pizza?
Answer:
Explanation:
1. Megan takes 3 hours to brew a gallon of root beer and 2 hours to make a pizza.
If she makes a pizza therefore, that is 2 hours that could have been used to make a gallon of root beer. However, it takes 3 hours to make a complete gallon so in those 2 hours only;
= 2/3 gallons would have been made
2. Susan takes 7 hours to brew a gallon of root beer and 5 hours to make a pizza.
Like Megan above, the 5 hours that would be used for Pizza would have gone towards making a gallon of beer. If it takes 7 hours to make a gallon then those 5 hours would have made;
= 5/7 gallons of root beer.
3. Absolute Advantage: Megan
The person with the absolute advantage is the person that can produce more goods with the same amount of costs. Megan can make more pizza in a smaller amount of time than Susan so she has Absolute advantage.
Comparative Advantage: Megan
The person with a Comparative advantage is the one that has the lowest opportunity cost when producing a good. Megan again has a lower opportunity cost with an opportunity cost of 2/3 gallons.
Answer:
The operating income will increase by $13,000.
Explanation:
Giving the following information:
Sales revenue
Total= $490,000
Luxury= $360,000
Sporty= $130,000
Variable expenses:
Total= $355,000
Luxury= $235,000
Sporty= $120,000
Contribution margin
Total= $135,000
Luxury= $125,000
Sporty= $10,000
Fixed expenses:
Total= $78,000
Luxury= $39,000
Sporty= $39,000
Operating income (loss):
Total= $57,000
Luxury= $86,000
Sporty= $(29,000)
New Income Statement:
Sales= 360,000
Variable costs= 235,000 (-)
Contribution margin= 125,000
Fixed costs= 39,000 + 16,000= 55,000
Operating income= 70,000
The operating income will increase by $13,000.