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1 year ago

The three methods used to classify costs into their fixed and variable components includes:.

Business

1 answer:

ANTONII [103]1 year ago

8 0

The three methods used to classify costs into their fixed and variable components include:

scatter diagrams
high-low method
regression analysis

<h3>What is a costs classification?</h3>

This refers to the process of separation of a group of expenses into different categories which are used to bring an management's attention certain costs that are considered more crucial than others, or to engage in financial modeling.

Often time, the purpose of cost classification is to allows the manager control processes and cut costs where needed or send more resources to an area of the process that is lacking.

Furthermore, the cost classification also allows the manage to review reports and advise accounting of needed adjustments in cost classification.

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Blackstone Technology is planning to invest in some project using external equity. The company has a beta of 1.1. The return on

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Answer:

Cost of equity = 19.1 %

Explanation:

Cost of equity = required rate of return + flotation cost

The Capital assets pricing model would be used to determined the required rate of return

<em>The capital asset pricing model (CAPM): relates the price of a share to the market risk or systematic risk. The systematic risk is that which affects all the all the economic agents, e.g inflation, interest rate e.t.c </em>

Using the CAPM , the required rate of return is given as follows:

E(r)= Rf +β(Rm-Rf)

E(r) - required return

β- Beta

Rm- Return on market

Rf- Risk-free rate

DATA

E(r) =? , Rf- 3%, Rm-14% , β- 1.1, flotation cost - 4%

E(r) = 3% + 1.1× (14% - 3%) = 15.1 %

Cost of equity = required rate of return + flotation cost

= 15.1 % + 4% = 19.1 %

Cost of equity = 19.1 %

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3 years ago

True or False: An interest-bearing account is an account that generates interest income on the available balance in the account.

Korvikt [17]

Answer:

False

Explanation:

Interest Bearing Account is an account which generates interest income over a specified period of time. Certificate of Deposit is an example for the interest bearing account. So, simply saying that An interest-bearing account is an account that generates interest income on the available balance in the account is wrong.

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3 years ago

It is important for managers of corporations to act ethically ___________. (Select the best choice below.) A. because a viola

scZoUnD [109]

Answer: B. because it is important for a business to be trusted by investors, customer and the public if it is to succeed

Explanation: Ethics is defined as the set of moral principles and standards or judging whether something is right or wrong and as such, it is quite vital for managers of corporations, firms and businesses to act in an ethical manner. This is because it is important for a business to be trusted by investors, customer and the public if it is to succeed in both the short and long term.

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3 years ago

Why are american firms moving manufacturing jobs overseas?

strojnjashka [21]

Cheap labor force...American businesses can save a substantial amount if they outsource.

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3 years ago

During its most recent fiscal year, Raphael Enterprises sold 340,000 electric screwdrivers at a price of $19.20 each. Fixed cost

Novay_Z [31]

Answer:

Variable costs=$3,876,000

Explanation:

Given Data:

Fixed costs amounted=$1,156,000

pretax income=$1,496,000.

Units Sold=340,000

Price of each unit sold=$19.20

Required::

Variable costs in the company's contribution margin income statement for the year =?

Solution:

Pretax Income=Revenue-Fixed costs-Variable costs

Revenue=Units Sold*Price of each unit sold

Revenue=340,000*$19.20

Revenue=$6,528,000

Pretax Income=Revenue-Fixed costs-Variable costs

$1,496,000=$6,528,000-$1,156,000-Variable costs

Variable costs=$6,528,000-$1,156,000-$1,496,000

Variable costs=$3,876,000

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3 years ago

Read 2 more answers