Answer:
Effect on income= $4,400 increase
Explanation:
Because it is a special order and there is unused capacity, we will not take into account the fixed costs.
<u>To calculate the effect on income, we need to use the following formula:</u>
Effect on income= number of units*unitary contribution margin
Effect on income= 4,400 (21 - 18 - 2)
Effect on income= $4,400 increase
Answer:
Available cash will be $27000
So option (d) will be the correct answer
Explanation:
We have given opening cash balance = $25000
Budgeted cash receipts = $141000
Total cash available = $25000+$41000 = $166000
Total cash payment = $139000
We have to find the cash available after outflow
So available cash after outflow is given by
Total cash available - total cash payment = $166000-$139000 = $27000
So option (d) will be the correct answer
Answer: $26.80
Explanation:
The standard portion cost is usually calculated as the cost of ingredient in a standard recipe divided by the number of portion produced by the recipe. That is :
Standard portion cost = cost of ingredients ÷ Number of portions produced by recipe
Standard portion cost = $0.67
Number of portions produced by recipe = 40
Therefore,
Cost of ingredient = (standard portion cost × number of portions produced by recipe)
Cost of ingredient = $0.67 × 40
Cost of ingredient = $26.80
Answer:
D. trade results in an increase in total surplus compared with a closed economy.
Explanation:
Trade enhances the economic well-being of a nation in the sense that trade results in an increase in total surplus compared with a closed economy.
Answer:
a. $11
b. $35
c. If the transferring division does not have excess capacity,this would mean that some units that could have been sold externally would be transferred internally and this creates an opportunity cost. Opportunity costs increase the transfer price.However no opportunity cost exist if transferring division has excess capacity and hence a lower transfer price.
Explanation:
The minimum acceptable price is the price that is acceptable to the transferring division and out of a range of acceptable prices, it is that which would be the best for the company.
When there is excess capacity.
Note : No opportunity costs would exist.
Minimum acceptable price = Variable Cost - Internal Savings + Opportunity Cost
= $11
When there is excess capacity.
Note : Opportunity costs would exist.
Minimum acceptable price = Variable Cost - Internal Savings + Opportunity Cost
= $11 + ($35 - $11 )
= $35
Why Capacity of transferring division (Small Motor Division) has an effect on the transfer price.
If the transferring division does not have excess capacity,this would mean that some units that could have been sold externally would be transferred internally and this creates an opportunity cost. Opportunity costs increase the transfer price.However no opportunity cost exist if transferring division has excess capacity and hence a lower transfer price.