A product normally sells for $200 per unit. A special price of $180 is offered for the export market. The variable production cost is $160 per unit. An additional export tariff of 10% of revenue must be paid for all export products. What is incremental net income per unit from accepting this special order?
Answers
Answer:
Effect on income= $2 increase per unit
Explanation:
Giving the following information:
A special price of $180 is offered for the export market. The variable production cost is $160 per unit. An additional export tariff of 10% of revenue must be paid for all export products.
We need to calculate the effect on income using the following formula:
Effect on income= sales - unitary variable costs
Effect on income= 180 - (160 + 180*0.1)= $2 increase per unit
Related Questions
Local Co. has sales of $ 10.7 million and cost of sales of $ 5.9 million. Its selling, general and administrative expenses are $ 550 comma 000 and its research and development is $ 1.2 million. It has annual depreciation charges of $ 1.4 million and a tax rate of 35 %. a. What is Local's gross margin? b. What is Local's operating margin? c. What is Local's net profit margin?
Tower Company planned to produce 3,000 units of its single product, Titactium, during November. The standards for one unit of Titactium specify six pounds of materials at $0.30 per pound. Actual production in November was 3,100 units of Titactium. There was an unfavorable materials price variance of $380 and a favorable materials quantity variance of $120. Based on these variances, one could conclude that:
Lorenzo Company applies overhead to jobs on the basis of direct materials cost. At year-end, the Work in Process Inventory account shows the following. Work in Process Inventory Date ExplanationDebit Credit Balance Dec.31 Direct materials cost1,900,000 1,900,000 31 Direct labor cost210,000 2,110,000 31 Overhead applied684,000 2,794,000 31 To finished goods 2,723,000 71,000 1. Determine the predetermined overhead rate used (based on direct materials cost). 2. Only one job remained in work in process inventory at December 31. Its direct materials cost is $22,000. How much direct labor cost and overhead cost are assigned to this job
Which of the following is not an assumption economists make when using the model of perfect competition? Group of answer choices There is easy entry and exit. Each firm sets it price equal to its average total cost. The products of each firm in a particular market are identical. Firms seek to maximize profits.
Answers
Answer: 1. Low
2. False
3. False
Explanation:
1. The owners' goal is to keep players' salaries Low.
As the text says, Oligopolist buyers would try to reduce the price of goods that they buy. In the MLB world, the teams are the buyers and the players are the sellers with the salaries being their price. Team owners will therefore try to keep salaries at a low level so that they make more profit.
2. False
This goal is not difficult to achieve due to budget differences but rather because different payers offer varying contributions to the team's game. Some players push the team forward more and hence are able to demand their fair share. This makes it difficult to cap their salaries.
3. False
They only tried to impose the salary cap so that they could reduce the cost of running the basketball teams and not to prevent teams from cheating. The salaries they were paying were high enough that they felt they weren't making enough profit. So they conspired to impose a salary cap so that they could make more profit.
Cash: $50,000 $60,000
Accounts receivable: 112,000 108,000
Inventories: 105,000 93,000
Prepaid expenses: 4,500 6,500
Accounts payable-
(merchandise creditors): 75,000 89,000
What is the amount of cash flows, from operating activities, reported on the statement of cash flows, prepared by the indirect method?
Answers
Answer:
The amount of cash flows, from operating activities, reported on the statement of cash flows, prepared by the indirect method is $268,702
Explanation:
The Net Income for the year is adjusted for non-cash items, items appearing elsewhere and items in movement of working capital to arrive at the net cash flow from operating activities using the indirect method.
Cash flows, from operating activities
Net income $250,771
adjusted for non-cash items
Depreciation $35,093
Amortization $10,838
adjusted for items in movement of working capital
Increase in Accounts receivable ($4,000)
Increase in Inventories ($12,000)
Decrease in Prepaid expenses $2,000
Decrease in Accounts payable (14,000)
Net Cash flows, from operating activities $268,702
Answers
Answer: 2.5
Explanation:
The Turnover (Asset Utilization) is calculated by dividing the business Turnover (Sales) by it's Assets.
We have the amount of assets (Investment). Now we have to calculate the Sales.
The Net Income was 12.5% of $100,000 so solving for that would be,
= 0.125 * 100,000
= $12,500
$12,500 was the Net Income.
It was said that the Net Income was 5% of sales so using algebra we have,
12,500= 0.05x
x = 12,500/0.05
= $250,000
With sales of $250,000 we can calculate the Turnover as,
Asset Turnover = Sales / Assets( Investment)
= 250,000/100,000
= 2.5
If you need any clarification do react or comment.
Answer:
The Turnover = 2.5
Explanation:
Step 1 : Find Net income
Return on Investment (ROA) = Net income/ Assets
12.5%=Net Income/$100,000
Net income = $100,000*12.5%
Net income= $12,500
Step 2 : Calculate Sales
Net income = Sales *5%
Therefore substitute known values
Sales = $12,500 *100/5
Sales = 250,000
Step 3 : Calculate Turnover ratio
Turnover = sales/ Assets
= 250,000/100,000
=2.5
Answers
Answer:
The standardization of the production process for higher output levels with fewer model changes
Explanation:
The standardization of production process has the potential to reduce the unit cost, though it may also reduce the flexibility necessary for the production of different products in a timely way. Consequently, this may reduce the product value on the part of customer.
Final answer:
A low-cost activity not suitable for a differentiator could be bulk purchasing of standard components as it may limit product uniqueness. Differentiation instead needs activities like design innovation, market research, and the use of costly, unique resources, possibly involving international trade and evaluating different parts of the value chain.
Explanation:
A low-cost activity that may not be appropriate for a differentiator could be bulk purchasing of standard components. While this approach can help a company minimize costs, it may prevent differentiation if the relied-upon components are standard and widely used, thereby limiting a product's uniqueness. Focusing on differentiation requires a company to focus on activities such as product differentiation, creating unique aspects of its product that allow it to stand out from competitors. These activities can be more expensive because they often involve design innovation, in-depth market research, and costly resources or materials. Particularly, when a company engages in international trade, differentiation may involve slicing up the value chain through tasks such as specialized manufacturing or tailoring marketing approaches to specific regional markets.
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Answers
Answer: The answer is as follows:
Explanation:
Price of basket in year one = $8
Price of basket in year two = $7
So, from year one to year two there is a fall in the price level which means that there is deflation in the economy at an annual rate of :
=
= -12.50%
In year one, $40 will buy = 5 Baskets
In year two, $40 will buy = 5.71 Baskets
Value of money =
Hence, this example illustrates that, as the price level falls, the value of money increases.
Answers
Answer:
Barriers to entry, Internal industry rivalry, Supplier power, buyer power,etc.
Explanation:
Firms that are capable of excessive productions could boost sales volume by increasing the productions at cost advantage of reducing price. But firms that are incapable of increasing the productions capacity will be unable to produce extra quantity to gain any market share.
Barrier to entry : A established large MES of the industry prevents small entrants from entering into the industry.