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timama [110]
3 years ago
15

1. The Cozy Company manufactures slippers and sells them at $ 10 a pair. Variable manufacturing cost is $ 5.75 a​ pair, and allo

cated fixed manufacturing cost is $ 1.75 a pair. It has enough idle capacity available to accept a​ one-time-only special order of 25,000 pairs of slippers at $ 7.50 a pair. Cozy will not incur any marketing costs as a result of the special order.
What would the effect on operating income be if the special order could be accepted without affecting normal​ sales:

(a)​ $0,
(b) $ 43,750 ​increase,
(c) $ 143,750 ​increase, or​
(d) $ 187,500 ​increase?

Show your calculations.
Business
1 answer:
nadya68 [22]3 years ago
6 0

Answer:

(b) $ 43,750 ​increase

Explanation:

The computation of the effect on operating income is shown below:

= Contribution margin per unit × special order

where,

Contribution margin per unit = Selling price per unit - Variable expense per unit

= $7.50 - $5.75

= $1.75

And, the special order is of 25,000 pairs

Now put these values to the above formula  

So, the value would equal to

= $1.75 × 25,000 pairs

= $43,750

The fixed cost would remain unchanged.

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Answer:

\arge\boxed{\large\boxed{\$ 117,788}}

Explanation:

Assume the <em>cost</em> equation to be:

                Cost(x)=Fixed\text{ }costs+Variable\text{ }costs\\\\Cost(x)=A+Bx

Where x is the number of units (wooden baseball bats) produced.

The <em>average cost per unit of production level</em> is the total cost divided by the number of units produced:

              Average\text{ }cost(x)=Cost(x)/x\\\\Average\text{ }cost(x)=(A+Bx)/x\\

You are given that the <em>average cost per unit of a production level of 7,700 bats is $14</em>, then:

             14=(A+7,700B)/7,700

You are also given that the <em>fixed costs</em> are <em>$22,500</em>, thus A = 22,500. Hence, you can substitute the value of A in the previous equation and find B:

              14=(22,500+7,700B)/7,700\\\\14\times 7,700=22,500+7,700B\\\\107,800-22,500=7,700B\\\\85,300/7,700=B\\\\B=11.08

Now you can complete the cost equation:

             

               Cost(x)=\$ 22,500+11.08x

And to predict the total costs for 8,600 bats you must subsitute x with 8,600 in the previous equation:

             Cost(8,600)=\$ 22,500+11.08(8,600)=\$ 117,788

5 0
3 years ago
India’s low-cost labor market and abundant supply of talented engineers gives it a(n) _________ in the international trade marke
zheka24 [161]

Answer:

economic barrier is correct answer

6 0
2 years ago
A comparable sold ten months ago for $350,000. Appraiser Andy concludes that property values have increased by 5% per year. What
astraxan [27]

The adjustment in the property value should be <u>$17,500 increase</u> so that the property is valued at $367,500.

<h3>Data and Calculations:</h3>

Value of property 10 months ago = $350,000

Increase in property values = 5%

Adjustment in property = $17,500  ($350,000 x 5%)

<h3>What is adjustment in property value?</h3>

This is the change in the value of property as a result of an increase or decrease in the values of comparable properties within the locality.

Thus, the adjustment in the property value should be <u>$17,500 increase</u> so that the property is valued at $367,500.

Learn more about adjustment in property values here: brainly.com/question/15397430 and brainly.com/question/7142333

7 0
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The following revenue and expense account balances were taken from the ledger of Acorn Health Services Co. after the accounts ha
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Pepsi Cola has entered into a long-term contract with a South African beverage business. The contract calls for the South Africa
Helen [10]

Answer:

<u>Licensing </u> is the correct answer.

Explanation:

Licensing is defined as a trade agreement between a company that gives another company authorization to manufacture its product by contract and payment of royalties for the use of the right to use the trademark.

Companies generally license: design, patents, trademarks, copyrights and others whose purpose is to assist in increasing profitability and expanding business.

Despite being a very profitable strategy worldwide, product licensing is not crucial to a company's success, despite the ease of marketing a product or brand already consolidated and valued by the consumer, it is necessary to ensure compliance in production processes. and focus on marketing and sales.

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