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egoroff_w [7]
2 years ago
9

Mettel Products sells 100,000 flash drives annually to industrial distributors who resell the drives to business customers for $

40 each. The distributors’ margins are 25%. Mettel Products’ cost of goods sold is $10.00 each. Mettel’s total variable costs (including selling costs) are $15.00 per drive. What is the gross margin (in percentage) enjoyed by Mettel Products on its drives? [Note: A firm’s margin on a product is typically calculated as a percentage of the firm’s selling price.] Mettel is considering increasing its annual advertising spending from $75,000 to $150,000. How many additional flash drives would it need to sell in a year in order to break-even? Now if instead of increasing its advertising spending, Mettel decides to reduce its price by $3 per drive, how many additional units would it need to sell in order to break even?
Business
1 answer:
Cerrena [4.2K]2 years ago
7 0

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Mettel Products sells 100,000 flash drives annually to industrial distributors who resell the drives to business customers for $40 each. The distributors’ margins are 25%. Mettel Products’ cost of goods sold is $10.00 each. Mettel’s total variable costs (including selling costs) are $15.00 per drive.

Selling price= 40/1.25= $32

A) Gross margin= 32 - 15= 17

%= 53%

B) Mettel is considering increasing its annual advertising spending from $75,000 to $150,000.

Break-even point= fixed costs/ contribution margin

Break-even points= 150,000/17= 8,824 units

C) Break-even points= 75,000/14= 5,357 units

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If the opportunity cost of manufacturing machinery is lower in the United States than in Britain and the opportunity cost of man
kogti [31]

Answer:

.a. import sweaters from Britain and export machinery to Britain.

Explanation:

A lower opportunity cost of manufacturing a particular goods means that a country uses fewer inputs in production compared to other nations.  The country can produce more quantities of the product using similar factors of production. A lower opportunity cost in manufacturing will make a country's output cheaper compared to when that product is manufactured in other nations.

Varying production costs form the basis of international trade. A County imports commodities that are produced cheaply elsewhere and exports the goods it can manufacture at a lower cost. The united states can produce machinery at a lower cost than Britain.  Britain will be prudent to import machinery from the united states rather than produce.  Britain produces sweaters using fewer inputs that the US. The US will find importing  sweaters from Britain more economical compared to manufacturing.  

3 0
2 years ago
Production equipment costing $500,000 has been purchased by a contract manufacturing company to meet the specific needs of a cus
irina1246 [14]

Answer:

Short-cut IRR = 18.75%

The company has not reached their rate of return goal on this contract and investment.

Explanation:

a) Data and Calculations:

Cost of production equipment = $500,000

Qualified investment tax credit (ITC) = 10% = $50,000 ($500,000 * 10%)

Contract period = 4 years with 4 years extension on renewal

Income tax rate for the company = 40%

Expected after-tax rate of return = 12%

Expected before-tax rate of return = 30% (12%/40%)

Annual income generated by the equipment = $150,000 for 4 years

Salvage value at the end of 4 years = $200,000

Short-cut IRR = 100%, divided by the number of years * about 75-80%

= 100%/4 * 75%

= 18.75%

8 0
2 years ago
A bond that has a face value of $150 maturing in one year is available for purchase for $134 . What is the interest rate offered
Norma-Jean [14]

The interest rate offered on the bond is 11.94%.

<h3>What is the interest rate on the bond?</h3>

The interest rate of the bond can be determined by calculating the yield to maturity of the bond. The yield to maturity is the interest rate that equates the price of the bond to the future value of the bond.

The yield to maturity can be determined using a financial calculator:

  • Cash flow in year 0 = $-134
  • Cash flow in year 1 = $150

YTM = 11.94%

To learn more about yield to maturity, please check: brainly.com/question/26376004

8 0
2 years ago
Haver Company currently produces component RX5 for its sole product. The current cost per unit to manufacture the required 50,00
pochemuha

Answer:

The incremental costs of making and buying component RX5 is $100,000

Explanation:

For computing the increment cost of making and buying component RX5, first we have to compute the cost of making and buying component RX5 separately.

Cost of making includes:

Direct Material = 50,000 × $5 = $250,000

Direct Labor = 50,000 × 9 = $450,000

Variable Overhead cost = 50,000 × 10 × 30% = $150,000

So, total cost of making = Direct material cost + direct labor cost + variable overhead cost

= $250,000 + $450,000 + $150,000

= $850,000

Now, the cost of buying component is equals to

=  units × RX5 per unit

= 50,000 × $19

= $950,000

So, the incremental costs of making and buying component RX5 is equals to

= cost of making - cost of buying component

= $950,000 - $850,000

= $100,000

Hence,  the incremental costs of making and buying component RX5 is $100,000

7 0
3 years ago
During 2015, equipment with a book value of $40,000 and an original cost of $210,000 was sold at a loss of $3,000. how much depr
alexdok [17]

Answer:

How much depreciation expense was recorded on equipment during 2015? $10000

Explanation:

Year Cost monthly Dep NBV

Year 1 210000 10000 200000

Year 2 200000 10000 190000

Year 3 190000 10000 180000

Year 4 180000 10000 170000

Year 5 170000 10000 160000

Year 6 160000 10000 150000

Year 7 150000 10000 140000

Year 8 140000 10000 130000

Year 9 130000 10000 120000

Year 10 120000 10000 110000

Year 11 110000 10000 100000

Year 12 100000 10000 90000

Year 13 90000 10000 80000

Year 14 80000 10000 70000

Year 15 70000 10000 60000

Year 16 60000 10000 50000

Year 17 50000 10000 40000

Year 18 40000 10000 30000

Year 19 30000 10000 20000

Year 20 20000 10000 10000

Year 21 10000 10000 0

4 0
3 years ago
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