Answer:
Alternative A= $1570
Explanation:
Giving the following information:
It has three choices:
(a) Refurbish the old equipment for $800.
Materials and labor= $1.10 per board.
(b) make major modifications for $1,100
Materials and labor= $0.70.
(c) purchase new equipment at a net cost of $1,800.
Variable costs= $0.40.
Q= 700
Alternative A= 800+1.10*700= $1570
Alternative B= 1100+0.70*700= $1590
Alternative C= 1800+0.40*700= $2080
The cheapest alternative is Alternative A. To make a full analysis you need the selling price, which we don't have.
Answer:
It need to sale 1,000 additional sandwiches to break-even
Explanation:
The contribution margin per sandwich is $5 (10 sale price - 5 variable)
the radio spot will be considered a fixed cost thus, to break even we divide it by the contribution:
$5,000 / $5 per sandwich = 1,000 sandwiches
Answer:
B. Collateral promise.
Explanation:
Collateral promise refers to a promise to pay the debt of another that is ancillary to an original promise. It is an undertaking which renders the promisor a guarantor or surety upon a debt owing by a third person who is primarily liable. It is not made for the benefit of the party making it.