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Lapatulllka [165]
2 years ago
7

Assume University Athletic Pharoah Club sells T-shirts for $30 and anticipates selling 6,700 shirts during football season. The

club purchases the shirts from a local dealer for $23.00. Budgeted fixed costs of $35,000 are made up of $3,700 of selling expense and the remainder is $17,700 administrative expense. The selling expenses include a sales commission of $0.22 per shirt. All other selling costs are fixed. Prepare an income statement in the contribution margin format.
Business
1 answer:
den301095 [7]2 years ago
3 0

The preparation of the University Athletic Pharaoh Club's Income Statement in the contribution margin format is as follows:

University Athletic Pharaoh Club

<h3>Income Statement</h3>

For the football season

Sales Revenue                $201,000

Variable cost of sales        155,574

Contribution margin       $45,426

Fixed Costs:

Selling and administrative 33,526

Net Income                       $11,900

<h3>Data and Calculations:</h3>

Sales revenue = $201,000 ($30 x 6,700)

Cost of sales = $155,574 ($23.22 x 6,700)

Fixed Costs = $35,000

Sales commission = $1,474 ($0.22 x 6,700)

Remaining fixed costs = $33,526

Thus, the income statement of University Athletic Pharaoh Club for the football season shows a net income of $11,900.

Learn more about Contribution-Margin Income Statement at brainly.com/question/24962994

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Answer:

The present value of the rent payments over the life of the lease is  $27,708

Explanation:

Year 1: $8,000

Year 2: $12,000

Year 3: $14,000

Rate of return: 10%

Option 1:

The present value of the rent payments over the life of the lease can be calculated in excel in the formula of NPV

= NPV(Rate, Cash in year 1, cash in year 2, cash in year 3) = NPV(10%,8000,12000,14000) = $27,708

Option 2:

NPV of cash in Year 1 after 3 years = $8,000/(1+10%)^1 = $7,273

NPV of cash in Year 2 after 2 years = $12,000/(1+10%)^2 = $9,917

NPV of cash in Year 3 after 1 years = $14,000/(1+10%)^3 = $10,518

So total NPV of cash in 3 years = $7,273 +$9,917+$10,518

= $27,708

4 0
3 years ago
What information must economists have to estimate the price elasticity of​ demand? To estimate the price elasticity of​ demand,
kkurt [141]

Answer:

C. the demand curve for a product.

Explanation:

Price elasticity of demand is a measure of the sensitivity of demand for a good or service to changes in the price of that product. We say that the price elasticity of demand is elastic when a percentage change in the price of this good has major impacts on demand. On the contrary, we say that the price elasticity of demand is inelastic when variations in the price of goods have little or no influence on demand.

Thus, to determine the value of elasticity, one must know what was the change in price and the change in quantity demanded. In a graph where price and quantity are the x and y axes, this can be obtained by observing changes in the demand curve points, which reflected the price change on one axis and the quantity change on another axis. Thus, it is sufficient to divide the percentage change in quantity demanded by the percentage change in price to find the price elasticity of demand.

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4 years ago
"For whom is a given mix of goods and services to be produced? How, in other words, are the society's outputs to be distributed
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Answer:

d. Private sector through the earning and spending of income.

Explanation:

In economics some major questions producers ask is for whom is production done, and how are output distributed in the economy.

For example ski equipment are produced for those people that practice skiing either as a sport or as a hobby. The particular set of people that use this product is targeted and provided with these goods.

Therefore these questions are answered in the private sector when the consumer earns income and spends it on their needs.

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3 years ago
Currently, you make one of the components needed for final assembly of your product and you are considering buying the part from
VashaNatasha [74]

Answer:

1. Break even quantity is 18,125 units

2. Cost to make 28,000 units = $ 775,000

3. Total costs to buy 28,000 units = $ 696,000

4. Savings by using low cost option ( buy from outside) $ 79,000

Explanation:

Computation of Break even point

Variable cost to make equipment in house                $ 25 per unit

Cost to purchase the unit from outside                       <u>$ 17 per unit</u>

Differential Cost per unit                                               <u>$ 8 per unit</u>

Fixed costs to be paid to outside supplier                  $ 220,000

Fixed costs to  be incurred in house                            <u>$  75,000</u>          

Incremental fixed costs                                                 $ 145,000

Break even point - Differential in fixed costs / Differential cost per  unit

$ 145,000/ $ 8 =                                                            18,125 units      

Computation of costs to make 28,000 units

Variable costs per unit -  $ 25 per unit

Units to be produced   -  28,000 units

Total Variable costs  $ 25 * 28,000 units                   $ 700,000

Fixed costs                                                                     $ <u> 75,000</u>

Total costs to make 28,000 units                               $ 775,000      

                               

Computation of costs to buy 28,000 units

Variable costs per unit -  $ 17 per unit

Units to be produced   -  28,000 units

Total Variable costs  $ 17 * 28,000 units                    $  476,000

Fixed costs                                                                    $  <u>220,000</u>

Total costs to make 28,000 units                              $ 696,000  

Computation of savings

Buying 28,000 units                                                    $ 775,000

Making 28,000 units                                                   <u>$ 696,000</u>

Savings from buying from outside                              $ 79,000                                

6 0
3 years ago
A hamburger stand near the local mall sells hamburgers for $3.99, drinks for $1.99, and fries for $1.49, while a gourmet restaur
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Answer:

Psychological pricing

Explanation:

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