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Alex777 [14]
3 years ago
13

Data concerning the next month’s budget appear below: Selling price $25 per unit Variable expenses $17 per unit Fixed expenses $

6,400 per month Unit sales 950 units per month Required: 1. Compute the company’s margin of safety. (Do not round intermediate calculations.)
Business
1 answer:
Arte-miy333 [17]3 years ago
4 0

Answer:

margin of safety= 15.79%

In unitos= 150 units

Explanation:

Giving the following information:

Selling price $25 per unit Variable expenses $17 per unit Fixed expenses $6,400 per month Unit sales 950 units per month.

Break-even point= fixed costs/ contribution margin

Break-even point= 6400/(25-17)= 800 units

margin of safety= (current sales - break-even point)/current sales level

margin of safety= (950 - 800)/950= 15.79%

In unitos= 150 units

You might be interested in
Whispering Winds Corp. Income Statement For the Year Ended December 31, 2017 Sales revenue Cost of goods sold Operating expenses
garri49 [273]

Answer:

<h2>                Whispering Winds Corp.</h2>

              Statement of Cash Flows (Indirect Method) 2017

Cash flow from operating activities:

net income                                             $161,100

Adjustments to reconcile net income:

+ depreciation expense                         $40,160

+ loss on sale of equipment                   $2,020

Change in current assets:

- increase in accounts receivable      ($40,050)

- increase in inventory                         ($44,310)

+ increase in prepaid expenses             $1,980

Change in current liabilities:

+ increase in accounts payable             $2,580

- decrease in accrued exp. payable   ($10,070)

Net cash provided by operating activities $113,410

Cash flow from investing activities:

purchase of new equipment              ($164,450)

sale of old equipment                           $33,650

Net cash provided by investing activities ($130,800)

Cash flow from financing activities:

Proceeds from issue of new stocks     $171,150

- redemption of bonds                         ($49,180)

- dividends paid                                   ($85,680)

Net cash provided by financing activities $36,290

                          <u>Net increase in cash $18,900</u>

4 0
3 years ago
When Tesla first launched their electric vehicles in the United States, they deviated from the norm in the automobile industry a
Damm [24]

Answer:

The choice of Tesla is known as Forward Integration.

According to the principles of Transaction Cost Economics, this is a good decision.

Explanation:

Companies sometimes take over the operations/businesses that deal with the distribution and supply of their products and or services. This move is known as forward integration.

Traditionally, companies focus on production then bring in middle-men such as Franchise owners, wholesales, dealers, and retailers to distribute their merhandise to the end user. Whilst there are associated benefits with this model, it's been found that the interests of the middle men also generate considerable costs.

In order to competitive advantage, companies are modifying their business models such that end users can deal directly with them thus reducing the final price of their goods and or services making them more accessible and easier to purchase for the consumers.

Transaction Cost Economics refers to the various ways in which an organisation can be set up in order to manage or control the costs associated with its transactions. The goal of transaction cost economics is to reduce overall costs in order to optimize profits, stay competitive and maintain growth by managing and modifying organisational structures and business models.

The most optimized organisational structure/business model is that which is able to attain the highest efficiency possible by operating at the lowest cost possible.

Good or Bad Decision

The market for motor vehicles is an oligopoly.

Therefore, price is an important factor to consider. As a more recent entrant into that space, this is very crucial for Tesla.

Tesla is not only entering into a market dominated by giants, but is also tryin to modify the way people know to drive cars (at least in most parts of the world). Therefore, it is a great move that it is going with a Price Penetration Strategy. Thus by cutting off the Franchise-Oriented dealerships and selling directly, Tesla is able to retain control over the price of it's vehicles.

The whole essence of reducing it's costs is so that it is able to make its products available to the consumers as an alternative to fossile fuel powered vehicles at the lowest cost possible. Despite it's best efforts, there are still petrol powered cars that are at least $10,000 cheaper that what Tesla is offering.

Besides price, one major factor that influences the choice to go with hybrid or 100% of electric cars is that they are clean and very environmental friendly.

Cheers!

5 0
3 years ago
When a company expands by entering new business areas, it is called growth through __________?
garri49 [273]
When a company expands by entering a new business area, it is called growth through diversification. 

Diversity is the means of being different, new, exciting.. something not like another. When a business enters something new, it's called diversification because it's not like what they've done before. With this comes risk but huge growth potential.
7 0
3 years ago
What is the dividend on an 8 percent preferred stock that currently sells for $45 and has a face value of $50 per share?
topjm [15]

The dividend of a stock would always depend on the face value of the share. Therefore the dividend is calculated by:

Dividend = (Face Value) * (Interest rate)

Dividend = $50 per share * 0.08

<span>Dividend = $4 per share                                (ANSWER)</span>

7 0
3 years ago
A company has net income of $187,000, a profit margin of 8.6 percent, and an accounts receivable balance of $126,370. Assuming 6
NARA [144]

Answer:

35.35  days

Explanation:

For the computation of company’s days’ sales in receivable first we do the following calculations

As we know that

Profit margin = Net income ÷ Sales

0.086 = 187,000 ÷ Sales

Sales = 2,174,418.605

So,

Credit sales = Sales × Sales percentage

= 2,174,418.605 × 0.6

= 1,304,651.163

Receivables turnover ratio = Credit sales ÷ Receivables

= 1,304,651.163 ÷ 126,370

= 10.3241

Now

Days sales in receivables = 365 ÷ Receivables turnover

= 365 ÷ 10.3241

= 35.35 days

4 0
3 years ago
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