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salantis [7]
3 years ago
12

13. Assume that Cane’s customers would buy a maximum of 80,000 units of Alpha and 60,000 units of Beta. Also assume that the raw

material available for production is limited to 160,000 pounds. How many units of each product should Cane produce to maximize its profits?
Business
1 answer:
timurjin [86]3 years ago
3 0

Answer:

80000 unit of Alpha

Explanation:

This is a Limiting factor/resource constraint question. In certain situations entities suffer from shortage of necessary resources (e.g: shortage of material, labor hours, machine hours), in such circumstances entities strive to allocate the constraint resources to the production of those products which generate the highest contribution per limiting factor and help maximize total contribution. In this case the limiting factor for Cane is Raw material.

Lets suppose that each unit of <em>Alpha and Beta sell for $120 and $80</em> respectively and variable cost per unit of <em>Alpha and Beta is $69 and $20 </em>respectively. Each unit of <em>Alpha and Beta require 2 and 5 pounds</em> of raw material for production respectively.

Now that we have supposed the data we have to compute contribution per unit and then contribution per limiting factor and based on the ranking (i.e highest first) of contribution per limiting factor we decide which product should be given priority for resource allocation.

<em>Lets calculate contribution per unit.</em>

Alpha:

Contribution per unit= SP-VC

Where, SP stands for selling price and VC stands for variable cost.

CPU= 120-69

CPU=$51

Beta:

Contribution per unit= 80-40

CPU=$40

<em />

<em />

<em>Now, lets calculate contribution per limiting factor.</em>

Alpha:

CLF: $51÷2

CLF: $25.5        1st Rank

Beta:

CLF: $40÷5

CLF: $8              2nd Rank

So clearly Alpha has a greater contribution per limiting factor and it implies that Alpha will earn the highest contribution margin therefore Cane should produce and allocate resources to Alpha first and then Beta if there remains any?

Profit maximizing output:

It requires 2 pounds of raw material to produce one unit of Alpha (i.e 80000×2=160000) Therefore Cane should produce 80000 units of Alpha only in order to maximize its profits.

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Samson Enterprises issued a ten-year, $20 million bond with a 10% interest rate for $19,500,000. The entry to record the bond is
erastovalidia [21]

Answer:

Assets: increase by 19,500,000

Liablities: increase by 19,500,000

Equity: no effect

Explanation:

cash proceeds:  19,500,000

      face value:  20,000,000

   discount              500,000

As the bonds issued were sold below par there is a discount.

the entry will be:

cash              19,500,000

discount on BP 500,000

     bonds payable           20,000,000

This will generate an increase on assets for 19,500,000

and increase liablities for 19,500,000

The issuance of bonds do not generate revenues or expenses. So the equity remains unchanged-

3 0
3 years ago
Which of the following statements about applying organizational socialization research is true? Multiple Choice Organizations ca
Talja [164]

Answer:

Multiple choice organizations can use socialisation tactics to promote ethical behavior.

Explanation:

Among the options enlisted, using socialisation tactics to promote ethical behavior is the most correct as a basis for establishing organizational socialization research.

Organizational socialization basically involves the procedures an organization and/or individual undergo to acquire necessary skills, attitudes, right conducts and behaviors to become in order to become more productive. Going by the foregoing, it can be established that the singular objective of organizational socialization is on how an organization will be the best of itself ethically and/or otherwise. The procedures ensure an all rounded look into organizational and/or individuals experience from the kick off to the eventual exit. The socialization aspect is critical as organization well being is a function of how ethically and morally sound the environment.

Hence, promoting ethical behavior using multiple choice organizations is the most critical and true about applying organization socialization research.

6 0
3 years ago
Sanchez Company's output for the current period was assigned a $400,000 standard direct labor cost. The direct labor variances i
o-na [289]

Answer:

$406,000

Explanation:

Calculation to determine the actual total direct labor cost for the current period

Using this formula

Actual direct labor cost=Standard direct labor cost + unfavorable rate variance - favorable efficiency variance

Let plug in the formula

Actual direct labor cost=$400,000 + $10,000 - $4,000

Actual direct labor cost= $406,000

Therefore the actual total direct labor cost for the current period is $406,000

5 0
3 years ago
Ben really enjoys outdoor activities. When he isn't working, he's biking, hiking, sailing, or training to run marathons. Which o
Amanda [17]

Answer:

a) high-paying

Explanation:

  • As ben is an outdoor person and likes to have most of the time sent out, has the hiking and sailing or training and running marathons he could be least be focused on the jobs that are high or good-paying.
  • As ben enjoys his life and lives for the moment and thus thinks of location, flexible work schedules and other benefits. But does not rely on the high paying careers.
4 0
3 years ago
A stock has an expected return of 11.85 percent, its beta is 1.24, and the expected return on the market is 10.2 percent. What m
prisoha [69]

Answer:

The risk free rate is 3.325%

Explanation:

The required rate of return or cost of equity of a stock can be calculated using the CAPM. The CAPM estimates the required rate of return of a stock based on three factors- risk free rate, stock's beta and the market risk premium. The equation of required rate of return under CAPM is,

r = rRF + Beta * (rM - rRF)

Where,

  • rRF is the risk free rate
  • rM is the return on market
  • (rM - rRF) gives us the risk premium of market

We already have the values for r, Beta and rM. Plugging in these values in the formula, we calculate the rRF to be,

Let rRF be x.

0.1185 = x + 1.24 * (0.102 - x)

0.1185 = x + 0.12648 - 1.24x

1.24x - x  =  0.12648 - 0.1185

0.24x = 0.00798

x = 0.00798/0.24

x = 0.03325 or 3.325%

3 0
3 years ago
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