Danny is using the menus for the first time. In six to eight sentences, give Danny directions about what he needs to know about
1 answer:
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Answer:
Bond interest expense = $2,290
so correct option is b. $2,290
Explanation:
given data
Bond issued = $50,000
Interest rate = 10%
interest semi-annually = 5%
time period = 5 year
to find out
amount of bond interest expense
solution
we get first Cash interest payment that is here
Cash interest payment = $50,000 × 5%
Cash interest payment = $2,500 ....................1
and Bond premium will be
Bond premium = $52,100 – $50,000
Bond premium = $2,100 .......................2
we know interest paid semi annually so time period will be = 10
so Amortization of bond premium will be here as
Amortization of bond premium =
Amortization of bond premium = $210 .................3
so Bond interest expense will be calculate as
Bond interest expense = Cash interest payment - Amortization of bond premium .......................4
put here value
Bond interest expense = $2,500 - $210
Bond interest expense = $2,290
so correct option is b. $2,290
Answer:
B. Company A's cost structure has higher fixed costs than B's.
Explanation:
Let's see the formula for income:
50,000 units x sales price - variable cost x 50,000 - fixed = net income
50,000 (sales - variable) - fixed = net income
At 50,000 both have equal net income.
Also we are given the fact that their sales is the same.
"identical except for cost structure"
So:
We work it and remove sales from the equation:
At 60,000 units, Company A has a higer income, so the increase of variable cost in company A is lower than company B
The cost of 10,000 more units is all variable cost, if Company A has more income, then their variable are lower.
If variable cost for 10,000 is lower, same applies for the variable cost for 50,000 so we have:
10,000Va < 10,000 Vb
50,000Va < 50,000Vb
So to have equal income at 50,000 units.
Fixed of A > Fixed of B