1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
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

You might be interested in
Magnolia, Inc., manufactures bedding sets. The budgeted production is for 17,700 comforters this year. Each comforter requires 7
sladkih [1.3K]

Answer:

Explanation:

Calculation of materials budget for 2012

Budgeted production units (A)  17,700

Material Required per unit (Yards) (B)  7

Total Material required (C) = A*B (Yards)  123,900

Add: Desired Ending material inventory  5,400

Less: Beginning Material inventory  (4,870)

Material to be purchased (Yards)  124,430

Price Per yard  $4 .70

Cost of Material to be purchased $584,821

4 0
4 years ago
Read 2 more answers
Communicating effectively, showing a sense of teamwork, and being a good negotiator are all ways to demonstrate which component
Alexxandr [17]
<span>Communicating effectively, showing a sense of teamwork, and being a good negotiator are all ways to demonstrate which component of emotional intelligence? Social management. Possessing all of these qualities and attributes makes you stable in your workplace and overall life environment. Having control of how you act in situations and having good emotional intelligence allows for growth and understanding overtime. Emotional intelligence is defined as being aware and in control of your emotions to successfully and </span>appropriately handle how you feel and act/react in certain situations. 
7 0
3 years ago
true or false: Quality function deployment (QFD) allows people to see how aspects of their products and services relate to custo
Marta_Voda [28]

Answer:

False

Explanation:

QFD is the process by which the opinions or wants of customers are used to create products that meets the needs f consumers

8 0
3 years ago
Although a sales representative may skip a step in the personal selling process or might sometimes have to go back and repeat st
Verdich [7]

Answer: c. closing the sale is the final—and most satisfying—part of the process.

Explanation:

Closing the sale is NOT the final part of the process but rather the FOLLOW-UP.

And like option e in the question shows, following up can lead to more sales for the representative because following up can guage customer satisfaction and if the customer is satisfied, they could become loyal and recurrent customers.

5 0
3 years ago
Cost of Debt KatyDid Clothes has a $150 million (face value) 30-year bond issue selling for 104 percent of par that carries a co
Ivahew [28]

Answer:

the annual pre-tax cost of debt is 10.56%

Explanation:

the beore-tax component cost of debt will be the actual market rate of the bonds, as they offer an interest rate of 11% but are selling at 104 points not at par thus, there is a difference between the rates.

We solve for the rate which makes the coupon and maturity 104

with excel or a financial calculator

PV of the coupon payment

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C 5.500 (100 x 11%/2)

time 60 (30 years x 2 payment per year)

rate <em>0.052787474</em>

5.5 \times \frac{1-(1+0.0527874736258532)^{-60} }{0.0527874736258532} = PV\\

PV $99.4338

PV of the maturity

\frac{Maturity}{(1 + rate)^{time} } = PV  

Maturity   100.00

time   60.00

rate  <em>0.052787474</em>

\frac{100}{(1 + 0.0527874736258532)^{60} } = PV  

PV   4.57

<em><u>Adding both we should get 104 which is the amount the bonds is selling:</u></em>

PV coupon $99.4338 + PV maturity  $4.5662 = $104.0000

The rate is generated using goal seek or wiht a financial calculator.

This rate is a semiannual rate, so we multiply by 2 to get the annual cost of debt:

0.052787474 x 2 = 0.105574947

The cost of debt for the firm is 10.56%

5 0
3 years ago
Other questions:
  • What unique feature do savings bonds have?
    6·2 answers
  • ​$1,200 is received at the beginning of year​ 1, $2,200 is received at the beginning of year​ 2, and​ $3,300 is received at the
    5·2 answers
  • On July 20, 2017, Matt (who files a joint return) purchased 3,000 shares of Orange Corporation stock (the stock is § 1244 small
    15·1 answer
  • When executives from competing firms meet to decide which of them will submit the lowest bid on a contract, they are indulging i
    9·1 answer
  • In what part of the circular flow model do households provide services to and receive payments from firms? Economic development
    10·1 answer
  • Francis Companyhas 24,000 shares of common stock outstanding at the beginning of 2019. Francis issued 3,000 additional shares on
    14·1 answer
  • Experts say that the choice between a typed thank-you letter or handwritten thank-you letter is unimportant, as long as you send
    7·1 answer
  • A common advantage of a promotion is that
    14·2 answers
  • If you have a balance of $1,000 on your credit card, and the interest rate is 17¾% a year, in order to pay off the $1,000 in 5 y
    8·1 answer
  • Which Internet service allows users to send and receive short text messages in real time?
    5·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!