Answer: Option A
Explanation: Any person can become a principal having sufficient business but in order to become an agent of the principal one needs to have the capacity to contract on behalf of the principal.
In a principal agent relationship, the principal bounds the agent to act on his behalf. So, there is no legal contracts to become a principal but the acts of agent are legally bound to a certain extent.
Hence, option A is correct.
Answer:
400; 800
Explanation:
Contribution:
Product X:
= Selling price - Variable cost
= 100 - 70
= 30,
Product Y:
= Selling price - Variable cost
= 80 - 40
= 40,
Product Z:
= Selling price - Variable cost
= 25 - 20
= 5
Machine hours required :
Product X:
= Machine time per unit × Monthly demand
= 3 × 300
= 900,
Product Y:
= Machine time per unit × Monthly demand
= 2 × 200
= 400,
Product Z:
= Machine time per unit × Monthly demand
= 1 × 500
= 500
Contribution per machine hour:
Product X = Contribution ÷ Machine time per unit
= 30 ÷ 3
= 10,
Product Y = Contribution ÷ Machine time per unit
= 40 ÷ 2
= 20,
Product Z = Contribution ÷ Machine time per unit
= 5 ÷ 1
= 5
It is highest for Y, so produce maximum amount of Y, then X and then Z
Y needs 400 hrs, we are left with 800 hours, so produce 800 hours of X.
Investors at Penny's candies have low expectations from the company since it has a very low P/E ratio. Either the company is not performing well or investors have discounted some bad news in future cash flows.
Whereas Donna's confections has a P/E of 6.7 which is much better than that of Penny's. So here the company is performing well and investors are positive on future good news and they expect the cash flows to improve and hence the stock rules at a higher P/E ratio
Answer: $1.50
Explanation:
Based on the information given in the question, we are informed that the variable cost of each box is $1.50 and usually has a contribution margin of $0.80 per box.
We should note that the minimum transfer price that the box division should find as acceptable will be the relevant cost. In this case, the relevant cost is given as $1.50 pee box and therefore, the minimum transfer price will be $1.50.
Answer:
See answer below
Explanation:
1. Degree of operating leverage
Selling price $126,000
Variable cost $50,400
Contribution margin $75,600
Fixed cost $23,000
Net operating income $52,600
Degree of operating leverage = Contribution margin / operating income = $75,600 / $52,600
= 1.44
