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3 years ago

8

The production department is proposing the purchase of an automatic insertion machine. It has identified 3 machines and has aske

d the accountant to analyze them to determine the best average rate of return.
Machine A Machine B Machine C
Estimated average income $40,000 $50,000 $75,000
Average investment $300,000 $250,000 $500,000

a. Machine B
b. Machine A
c. Machine B or C
d. Machine C

1 answer:

cricket20 [7]3 years ago

4 0

Answer: the correct answer is a. Machine B

Explanation:

Machine A average rate return

40000 out of 300000. It means that 300000 is 100% and $ 40000 is X. We apply a simple three rule:

40000 X X= 4000000/300000

300000 100% X= 13.33%

Machine B average rate return

50000 out of 250000. It means that 250000 is 100% and $ 50000 is X. We apply a simple three rule:

50000 X X= 5000000/250000

250000 100% X= 20%

Machine C average rate return

$75,000 out of $500,000. It means that $500,000 is 1005 and $75,000 is X. We apply a simple three rule

$75,000 X X=7500000/500000

$500,000 100% X= 15%

The highest average is the one onf Machine B

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Answer: a

Explanation:

Opportunity costs represent the benefits an individual, investor or business misses out on when choosing one alternative over another. While financial reports do not show opportunity cost, business owners can use it to make educated decisions when they have multiple options before them.

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Opportunity cost analysis also plays a crucial role in determining a business's capital structure. While both debt and equity require expense to compensate lenders and shareholders for the risk of investment, each also carries an opportunity cost. Funds used to make payments on loans, for example, are not being invested in stocks or bonds, which offer the potential for investment income. The company must decide if the expansion made by the leveraging power of debt will generate greater profits than it could make through investments.

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3 years ago

Beckenworth had cost of goods sold of $11,221 million, ending inventory of $3,889 million, and average inventory of $2,145 milli

inysia [295]

Answer:

69.77 days

Explanation:

days' sales in inventory = number of days in a period/ inventory turnover

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days' sales in inventory = = 365 / 5.231235 million = 69.77 days

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3 years ago

The Blue Hydrangea Law Firm prepays for advertising in the local newspaper. On January 1, the law firm paid $ 7 comma 700 for s

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Answer:

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Explanation:

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3 years ago

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Answer:

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3 years ago

Read 2 more answers

The following units of an inventory item were available for sale during the year:Beginning inventory 10 units at $55First purcha

Leto [7]

Answer:

$1150.

Explanation:

Given: Beginning inventory 10 units at $55

First purchase 25 units at $60

Second purchase 30 units at $65

Third purchase 15 units at $70.

First, lets calculate total units of inventory available.

Total inventory available for sales during the year= $(10+25+30+15)= 80\ units$

∴ Total inventory available for sales during the year= 80 units

As given 60 units were sold out of total 80 units.

$80-60= 20\ units$

∴ 20 units of inventory is still remaining.

To determine the cost of unit sold, under LIFO accounting, you start with assumption that you have sold the most recent inventory and work backward.

As 20 units is still available after selling 60 units.

∴ The value of ending inventory= $(10\ units \times \$60 + 10\ units \times \$55)$

The value of ending inventory= $\$600+\$550= \$ 1150$

∴ The value of ending inventory using LIFO is $1150.

6 0

3 years ago