1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Sav [38]
3 years ago
12

Derby Inc. manufactures a product which contains a small part. The company has always purchased this motor from a supplier for $

125 each. Derby recently upgraded its own manufacturing capabilities and now has enough excess capacity (including trained workers) to begin manufacturing the motor instead of buying it. The company prepared the following per unit cost projections of making the motor, assuming that overhead is allocated to the part at the normal predetermined overhead rate of 150% of direct labor cost.Direct material $ 38Direct labor 50Overhead (fixed and variable) 75Total $ 163The required volume of output to produce the motors will not require any incremental fixed overhead. Incremental variable overhead cost is $21 per motor. What is the effect on income if Derby decides to make the motors
Business
1 answer:
skad [1K]3 years ago
8 0

Answer:

Income will be higher by $16 per unit

Explanation:

As per the data given in the question,

Direct material = $38

Direct labor = $50

Overhead = $21

Total variable cost = $38 + $50 + $21

= $109

Cost of supply = $125

Income increased per unit = cost of supply - total variable cost  

=$125 - $109

= $16

Because the cost of inhouse is lower therefore net income will be more by $16 per unit

You might be interested in
If this game is played only once, then the most likely outcome is that a. both firms produce a good quality product. b. both fir
EleoNora [17]

Answer:

a. both firms produce a good quality product.

Explanation:

There are two companies Acme and Pinnacle that can either make good or poor products, which generate a table of four possible outcomes, that is, either they both make good products or not or either company makes good or poor products.

Assuming this was a game that was played once, the table drawn shows that the first outcome is that both companies make good products with a profit margin of $6 million.

4 0
3 years ago
What is the main purpose of an appointment reminder? In a medical office.
BARSIC [14]
B. <span>Decrease the number of patients who miss </span> 

6 0
3 years ago
Read 2 more answers
Carson Corporation stock sells for $35 per share, and you’ve decided to purchase as many shares as you possibly can. You have $5
snow_tiger [21]

Answer:

2041 shares

Explanation:

Maximum amount for investment = $ 50 000 / 70 % = $ 71428.571

maximum number of shares =  $ 71428.571 / $ 35 = 2040.812 approx 2041 shares

6 0
3 years ago
If the price of pants increases, what would you expect would happen in the market for pants?
worty [1.4K]

Answer: There will be a surplus at the increased price.

Explanation: Acc. to the law of demand as the price of a good rises the quantity demanded for the good will fall. This is represented by a movement up along the demand curve.

Acc. to the law of supply as price of a good rises the sellers will supply more units of the good. This is represented by a movement up along the supply curve.

At the increased price, there will be a surplus in the market given by Q's - Q'd.

Eventually, the surplus will lead to a fall in the price of pants till demand for the good is equal to its supply.

6 0
3 years ago
Read 2 more answers
Astro Co. sold 20,000 units of its only product and incurred a $50,000 loss (ignoring taxes) for the current year as shown here.
Alexandra [31]

Answer:

Required 1.

Break even point (dollar sales) =   $750,000

Required 2.

Break even point (dollar sales) = $1,250,000

Required 3.

ASTRO COMPANY

Forecasted Contribution Margin Income Statement

For Year Ended December 31, 2016

Sales                             $ 1,000,000

Variable costs               ($ 400,000 )

Contribution margin      $ 600,000

Fixed costs                    ($ 450,000 )

Net loss                           $ 150,000

Required 4.

Sales to meet target profit (dollar sales) = $1,833,333

Sales to meet target profit (unit sales) = 73,334

Explanation:

Break even point is the level of activity where a Company neither makes a profit nor a loss.

<em>Break even point (dollar sales) = Fixed Cost / Contribution Margin Ratio</em>

Where,

Contribution Margin Ratio = Contribution / Sales

                                           = $ 200,000 / $ 1,000,000

                                           = 0.20

Therefore,

Break even point (dollar sales) = $250,000 / 0.20

                                                   = $1,250,000

<u>Assuming the machine is installed</u>

Contribution Margin Ratio = ($ 1,000,000 - $400,000) / $ 1,000,000

                                           = $600,000 / $1,000,000

                                           = 0.60

Therefore,

Break even point (dollar sales) = ($250,000 + $200,000) / 0.60

                                                   = $750,000

Sales to meet target profit of $200,000

Sales to meet target profit (dollar sales) = Fixed Cost + Target Profit  / Contribution Margin Ratio

                                                                  = ($450,000 + $200,000) / 0.60

                                                                  = $1,833,333

Sales to meet target profit (unit sales) = $1,833,333 / $25

                                                               = 73,334

                                                                 

4 0
3 years ago
Other questions:
  • Missoula Inc. reported the following selected financial statement data: Dec 31, 2020 Dec 31, 2021 Cash $ 47,000 $ 57,500 Account
    8·1 answer
  • Sheridan Company sells office equipment on July 31, 2017, for $20,320 cash. The office equipment originally cost $84,510 and as
    13·1 answer
  • A law or set of laws are created to give a policy legal force
    10·1 answer
  • At year-end, the perpetual inventory records of Whispering Winds Corp. showed merchandise inventory of $112,410. The company det
    15·1 answer
  • An increase in the price of hay would cause the supply of beef to ___________. Which determinant causes this change? ___________
    8·1 answer
  • According to conflict theorists, schools:
    5·1 answer
  • How can the government reduce the wealth gap in a mixed market economy
    11·1 answer
  • Gleam Clean cleans and waxes floors for commercial customers. The company is presently operating at less than capacity with equi
    13·1 answer
  • When Maricela looked in her closet and said, "I don't have anything to wear to the party this weekend," she seems to be in which
    7·1 answer
  • All businesses deal with unhappy customers at some point, and they typically follow this pattern in these situations: call the c
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!