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4 years ago

Risks of fixed costs of a business are more for an alliance than an independent firm.

1 answer:

5 0

False. Risks of fixed costs of a business are more for an alliance than an independent firm. Businesses have risks and without any risk, comes a smaller reward. Taking a risk often yields a larger profit and room to grow/expand. Fixed costs are are costs that stay constant no matter the quantity of goods or service produced.

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Barclay Enterprises manufactures and sells three distinct styles of bicycles: the Youth model sells for $350 and has a unit cont

grandymaker [24]

Answer:

Break-even point in composite units = 811 units

Explanation:

Number of modal;

5 Youth models

9 Adult models

6 Recreational models

Annual fixed costs total = $6,550,000

Find:

Break-even point in composite units

Computation:

Mixed contribution margin = 5[130] + 9[475] + 6[525]

Mixed contribution margin = 650 + 4275 + 3150

Mixed contribution margin = $8075

Break-even point in composite units = Annual fixed costs total / Mixed contribution margin

Break-even point in composite units = 6,550,000 / 8075

Break-even point in composite units = 811 units

3 0

3 years ago

In companies using a fixed-order quantity model, a consistent inventory level is used as a trigger to order more product. This i

Zielflug [23.3K]

Answer:

Reorder point

Explanation:

A company or organization making use of fixed-order quantity model which is a model where the REORDER POINT has been fixed and has already been set automatic in which once it reach the minimum inventory level it will remind the company that inventory level has reach the limit for the company to restore the stock inventory or order more product, which is why this inventory level is called the REORDER POINT.

Therefore REORDER POINT can be defined as the point which serve as a reminder that the stock inventory level has dropped to the minimum reorder level and need to be replaced or reorder.

5 0

3 years ago

Given below is a numbered list of cost terms. For each of the definition statements that follow, place the number of the cost te

leva [86]

Answer:

The correct answers are the following:

a - 4 Sunk

b - 5 Opportunity

c - 3 Fixed

d - 2 Variable

e - 6 Incremental

f - 1 Recurring

g - 7 Direct

h - 8 Non-recurring

Explanation:

a) Sunk costs are those that have already occurred in the past and they can not be recovered again so therefore that they are not relevant at the time of taking decisions regarding the futue.

b) Opportunity costs are those that try to measure and show the sacrifice done at the time of making a decision when that sacrifice represents the best second option that the person could have done.

c) Fixed costs are those that are always the same amount and do not change with the activity level of the production of the company.

d) Variable costs are those that do change with the amount of activity level that the company has during the production process.

e) Incremental costs are those that increase the cost level of the production while the output level increases as well, so they are a concept on the margin.

f) Recurring costs are those that tend to repete continously in the production process so the company already know how much the amount of the cost is.

g) Direct costs are those that the company associates with the production process regarding the commodities and all the primary sources that are needed to produce the good and therefore that they impact directly in the production and in the cost of the final product.

h) Non-recurring costs are those that the company are not familiar with due to the fact that they do not repete often and therefore tend to happen once in a while.

4 0

3 years ago

Identify whether each the following transactions is a primary market or a secondary market transaction: Jim Henry bought 500 sha

slamgirl [31]

Answer:

Jim Henry bought 500 shares of I.B.M. through a broker.

SECONDARY MARKET TRANSACTION

Peggy White bought 500 shares of Apple from another investor.

SECONDARY MARKET TRANSACTION

New York Life Insurance Co. bought 500,000 shares of Tioga Corp when the company issued the stock.

PRIMARY MARKET TRANSACTION

Primary market transactions that place when an investor purchases securities at the time the corporation or entity issued them, e.g. if you purchased Amazon's stocks at their IPO (or any other time new stocks were issued), it was a primary market transaction. But if you purchased Amazon's stocks at any other time, it is a secondary market transaction. Almost all the transactions carried out everyday are secondary market transactions.

5 0

3 years ago

Integrated Masters Inc. (IMI) is presently operating at 80% of capacity and manufacturing 116,000 units of a patented electronic

balu736 [363]

Answer:

a. $3.13 per unit

b. No

c Yes

Explanation:

The computation is shown below

a. Fixed overhead per unit is

= Fixed overhead ÷ Number of units manufactured

= $363,000 ÷ 116,000 units

= $3.13 per unit

b. The cost calculation is not appropriate because the fixed overhead per unit is not be involved while calculating the cost

c. Now the acceptance of the offer should be based on total relevant cost which is

Total relevant cost

= $6.1 + $6.1 + $8.1

= $20.3

Since the offer is accepted because total relevant cost is less than the offered purchase price i.e $24.50

3 0

3 years ago