Answer:
Financial advantage of purchasing Cisco from outside vendor = $9,440
Explanation:
7,900 units produced
variable costs allocated to Cisco units (avoidable):
- direct materials $4.58 per unit
- direct labor $4.51 per unit
- indirect labor $0.45 per unit
- utilities $0.41 per unit
- total $9.95 x 7,900 units = $78,650
fixed manufacturing costs allocated to Cisco:
- depreciation $860
- property taxes $320
- Insurance $610
- total $1,790
an outside supplier can provide Cisco for $63,200 plus:
- freight and inspection costs $0.60 per unit x $7,900 = $4,740
- total receiving costs $1,270
- total $6,010
Incremental Analysis
Produce Purchase Difference
Cisco Cisco amount
Variable production $78,650 $78,650
costs
Purchase price $63,200 ($63,200)
Additional expenses $6,010 ($6,010)
Financial advantage of purchasing Cisco $9,440
Allocated fixed costs are not included in this analysis since they cannot be avoided by either action, producing or purchasing.
Answer:
(A) ($10,000)
Explanation:
This is the actual situation with the product A on production.
500.000,00 Sales of the product total
-340.000,00 variable expenses total
-210.000,00 Fixed expenses charged to the product total
-50.000,00 Income
If the product A is dropped the company not loose anymore the ($50,000) of income but the company must pay the $60,000 of fixed expenses, so the company will have a disadvantage of ($10,000).
Answer:
- The budget deficit will decrease
- The curve it changes is the loanable funds curve
- The loanable funds curve shifts to the right
- The equilibrium interest rate falls
Explanation:
The reduction in transfer payments by Government will cause the budget deficit of the Government to decrease and also the the decrease in the Budget deficit will lead to the availability of loanable funds thereby causing the loanable funds curve to shift to the right.
With the availability of loanable funds the equilibrium interest rate will fall below its usual equilibrium level.and the Government can reduces transfer payments to achieve all of this.
A capitalized value of land is the value of the land calculated on Total return per year divided by the interest rate.
The capitalized value of land = Return on land per year ÷ Interest rate
Where Return on land per year = $750
Interest Rate = 7%
The capitalized value of land = $ 750 ÷ 0.07
= $ 10,714.29
Therefore, the capitalized value of land if the interest rate is 7% is $ 10,714.29.
