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Elanso [62]
3 years ago
7

Lakeside Inc. produces a product that currently sells for $57.60 per unit. Current production costs per unit include direct mate

rials, $22; direct labor, $24; variable overhead, $11.00; and fixed overhead, $11.00. Product engineering has determined that certain production changes could refine the product quality and functionality. These new production changes would increase material and labor costs by 20% per unit. If Lakeside could sell the refined version of its product for $40 per unit, should it be processed further?
Business
1 answer:
Sidana [21]3 years ago
5 0

Answer:

It is convenient to make the changes.

Explanation:

Giving the following information:

Selling price= $57.60 per unit.

Direct materials= $22

Direct labor= $24

Variable overhead= $11.00

Fixed overhead= $11.00.

New costs:

Direct material cost= 22*1.2= $26.4

Direct labor cost= 24*1.2= $28.8

<u>I suppose that the selling price will increase by $40.</u>

To determine whether the changes increase profit or not, we need to calculate the unitary contribution margin per unit for both options:

Contribution margin= selling price - unitary variable cost

Actual Contribution margin:

Contribution margin= 57.6 - (22 - 24 - 11)= 0.6

New contribution margin:

Contribution margin= 97.60 - (26.4 - 28.8 - 11)= $31.4

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Madura Inc. wants to increase its free cash flow by $180 million during the coming year, which should result in a higher EVA and
RoseWind [281]

Answer:

$156 million

Explanation:

The computation of the change in net working capital  is shown below:

Free cash flow = EBIT × (1 -Tax Rate) + Depreciation & Amortization - Change in Net Working Capital - net capital Expenditure.

$180 million = $960 million × (1 - 40%) + $120 million - change in working capital - $360 million

$180 million = $576 million + $120 million - change in working capital - $360 million

$180 million = $336 million - change in working capital

So, the change in working capital would be

= $336 million - $180 million

= $156 million

6 0
3 years ago
Stop and Go has a 4.5 percent profit margin and a 15 percent dividend payout ratio. The total asset turnover is 1.6 and the debt
AVprozaik [17]

Answer:

10.85 percent

Explanation:

Return on equity = 0.045 × 1.60 ×(1 + 0.60) = 0.1152

Sustainable growth = [0.1152 × (1 - 0.15)]/{1 - [.1152 × (1 - 0.15)]} = 10.85 percent

The sustainable growth rate is the rate of growth that a company can expect to see in the long term. Often referred to as G, the sustainable growth rate can be calculated by multiplying a company’s earnings retention rate by its return on equity. The growth rate can be calculated on a historical basis and averaged in order to determine the company’s average growth rate since its inception.

The sustainable growth rate is an indicator of what stage a company is in, during its life cycle. Understanding where a company is in its life cycle is important.

3 0
3 years ago
Which is NOT an advantage of a mutual fund?
denpristay [2]

Answer:

I think D. If I'm wrong I'm sorry

7 0
3 years ago
A stock currently sells for $49. the dividend yield is 3. 8 percent and the dividend growth rate is 5. 1 percent. What is the am
tatyana61 [14]

If a stock currently sells for $49. tThe amount of the dividend that was just paid is $1.77.

A inventory is a fashionable term used to describe the ownership certificate of any business enterprise. A percentage, on the other hand, refers to the inventory certificate of a selected organization. maintaining a particular organization's percentage makes you a shareholder.

A coins dividend is the distribution of budget or cash paid to stockholders generally as a part of the employer's present day income or accrued income. cash dividends are paid at once in money, as opposed to being paid as a inventory dividend or other form of cost.

Dividend yield=Annual Dividend next year/Current price

Annual Dividend next year=(49*3.8%)=$1.862

Hene, the dividend just paid = Annual Dividend next year * Present value of discounting factor(    5.1%, time period)

⇒$1.862/1.051

⇒$1.77        (Approx)

Learn more about stock market here:-brainly.com/question/690070

#SPJ4

3 0
1 year ago
An increase in the price of gasoline will reduce the amount of gasoline purchased. This is
nekit [7.7K]

Answer:

<h2>In this case,the answer is option is B. or a positive economic statement.</h2>

Explanation:

  • In Economics or any Social Science,a positive statement basically refers to an assertion,proposition,fact etc. that can be practically tested or evaluated by examining statistical or empirical data,information and/or facts.
  • In this instance,the statement given represents an economic relationship between two economic variables,that is,price of gasoline and its consumption level.
  • Therefore,this is a general statement that can be verified or evaluated by collecting and examining relevant numerical data or facts on the price of gasoline and its consumption level at various parts of the country.
  • Following the data or numerical fact collection on both price of gasoline and its consumption or purchase level,a basic correlation study can be conducted between the two concerned variables to determine whether the gasoline price has any practical impact on its consumption level.
5 0
3 years ago
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