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quester [9]
3 years ago
7

Lightning Remote Cars manufactures remote control cars for children. Historically, Lightning Remote Cars has manufactured their

own tires they sell. However, a tire manufacturer has recently approached Lightning Remote Cars with an offer to produce their tires for them for $1.40 per tire. Lightning Remote Cars anticipates needing 50,000 tires this year to meet the demand for their remote control cars. What would be the total impact on operating income if the tires are purchased from the outside supplier
Business
1 answer:
notsponge [240]3 years ago
6 0

Answer:

operating income would decrease by $2,500 if tires are purchased

Explanation:

offer from outside vendor = $1.40 per tire

yearly demand = 50,000 tires

production costs:

  • direct materials $0.25
  • direct labor $0.80
  • variable manufacturing overhead $0.30
  • fixed costs $0.50

total costs = $1.85

total avoidable costs = $1.35

                                     make tires        buy tires          differential amount

produce tires               $92,500           $0                    $92,500

buy tires                       $0                     $95,000          ($95,000)

total                              $92,500           $95,000          ($2,500)

operating income would decrease by $2,500 if tires are purchased

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You are thirsty and decide to have an iced tea. Your thirst is a​ ________ and your choice of iced tea is a​ ________.
Rudik [331]

Answer: Option D

Explanation: A need can be defined as a obligation, which if not fulfilled can lead to adverse results on a living beings health. Thus, thirst is a natural phenomenon for every human being and if it is not fulfilled than it can result in death.

The desire of an individual to purchase any commodity at a specific price is called demand. In the given case, the choice of ice tea is a demand  that an individual made when in need .

4 0
4 years ago
25. XYZ Company leased equipment to West Corporation under a lease agreement that qualifies as a finance lease to West but not a
Sergeu [11.5K]

Answer:

The balance in right-of-use asset after two years using straight-line method is $428,571.

Explanation:

Right-of-use asset is simply the lessee's right to the use of leased asset under the agreed terms. The term came into being as a result of IFRS 16 Leases, which replaced IAS 17.

Using straight-line method, depreciation expense is calculated as (Cost - Residual Value) / No of useful life

The economic life of the asset is what we would use as the useful life and not the lease term since that approximates the useful life of the asset.

Therefore, depreciation = ($600,000 - 0) / 7 years = $85,714 yearly

Accumulated depreciation for 2 years is $85,714 x 2 = $171,429 approximately

Therefore, the balance (net book value) in the right-of-use asset after two years will be $600,000 - $171,429 = $428,571

3 0
3 years ago
Suppose you have the following information about a fictitious economy. Assume there are no taxes in this economy. Disposable Inc
djyliett [7]

The equilibrium level of consumption is $28500.

The equilibrium level of consumption is at the point where the disposable income is equal to the consumption.

If this was properly placed in a tabular form, we would clearly see that when the disposable income was at $28500, the consumption in dollars was also at the same price level.

Given this condition, we can conclude in economics that consumption is at its level of equilibrium.

Read more on brainly.com/question/14670879?referrer=searchResults

4 0
3 years ago
Recently, Hale Corporation announced the sale of 2.5 million newly issued shares of its stock at a price of $21 per share. Hale
nasty-shy [4]

Based on the fact that HALE sold the shares to an Investment banker, this cannot be said to be a secondary transaction. The statement is <u>False</u>.

<h3>What is a secondary market share transaction?</h3>

This refers to when shares have already been sold to individuals and institutional investors, and then these entities sell to other entities.

When a company sells directly to an investment bank which then sells it to others, this is a primary market transaction.

Find out more on primary market transactions at brainly.com/question/8017256.

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4 0
2 years ago
Bryant Co. has $2.7 million of debt, $1 million of preferred stock, and $2.1 million of common equity. What would be its weight
Lelu [443]

Answer:

0.172

Explanation:

The computation of the weight on the preferred stock is shown below:

Weight on preferred stock is

= Preferred stock ÷(Debt + preferred stock + common equity)

= $1 million ÷ ($2.7 million + $1 million + $2.1 million)

= $1 million ÷ $5.8 million

= 0.172

By applying the above formula we can easily determine the weight on preferred stock

6 0
3 years ago
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