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3 years ago

The contribution margin approach helps managers in short-term decision making because it ________

2 answers:

8 0

The contribution approach is a presentation format used for calculation of the break-even point, which is the point of zero profit or loss. The contribution margin approach helps managers in short-term decision making because it reports costs and revenues at present value.

lana66690 [7]3 years ago

5 0

The contribution margin approach helps managers in short-tern decision making because it reports costs and revenues at their current value.

The contribution margin ratio/approach allows companies to determine their profits they can make from a product minus variable costs.

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Abba, Inc. is considering dropping a product line. During the prior year, the line had sales of $207,000 and a contribution marg

damaskus [11]

Answer:

Overall net income will decrease by $34,000.

Explanation:

Calculation to determine net operating income

Using this formula formula

Net operating income=Contribution margin -Avoidable costs

Where,

Contribution margin =$124,000

Avoidable costs= Salaries $60,000

+Advertising $20,000+Administrative expenses $10,000

Let plug in the formula

Net operating income=$124,000-($60,000+$20,000+$10,000)

Net operating income=$124,000-$90,000

Net operating income=$34,000 Decrease

Therefore If this product line is dropped overall net operating income will:decrease by $34,000

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3 years ago

Berry Corporation has 50,000 shares of $10 par common stock authorized. The following transactions took place during 2012, the f

mojhsa [17]

Answer:

$285,000

Explanation:

Please see attachment

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3 years ago

Assume that you are a new analyst hired to evaluate the capital budgeting projects of the company which is considering investing

Alchen [17]

Answer:

Assume that you are a new analyst hired to evaluate the capital budgeting projects of the company which is considering investing in two CPEC projects, “Expansion Zone North” and “Expansion Zone East”. The initial cost of each project is Rs. 10,000. Company discount all projects based on WACC. Further, all the projects are equally risky projects and the company uses only debt and common equity for financing these projects. It can borrow unlimited amounts at an interest rate of rd 10% as long as it finances at its target capital structure, which calls for 50% debt and 50% common equity. The dividend for next period is $2.0, its expected that they will grow at the constant growth rate of 8%, and the company’s common stock sells for $20. The tax rate is 50%.

6 0

3 years ago

Read 2 more answers

Mel operates a video game store. His records indicate that he had sales of $78,000. Customers returned $1,500 worth of video gam

Kamila [148]

Answer:

D. $57,500

Explanation:

Gross income = sales - (goods returned + cost of goods sold) = $78,000 - ($1,500 + $19,000) = $78,000 - $20,500 = $57,500

7 0

3 years ago

Trio Company reports the following information for the current year, which is its first year of operations.

Contact [7]

Answer:

Instructions are below.

Explanation:

Giving the following information:

Direct materials $15 per unit

Direct labor $15 per unit

Overhead costs for the year

Variable overhead $3 per unit

Fixed overhead $120,000 per year

Units produced this year 20,000 units

Units sold this year 14,000 units

Ending finished goods inventory in

units 6,000 units

The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.

The variable costing method incorporates all variable production costs (direct material, direct labor, and variable overhead).

1<u>) Absorption costing method:</u>

Unitary fixed overhead= 120,000/20,000= 6

Unit product cost= direct material + direct labor + total unitary overhead

Unit product cost= 15 + 15 + 3 + 6= 39

<u>Variable costing:</u>

Unit product cost= direct material + direct labor + variable overhead

Unit product cost= 33

2) Ending inventory:

Absorption costing= 6,000*39= $234,000

Variable costing= 6,000*33= $198,000

3) Cost of goods sold:

Absorption costing= 14,000*39= 546,000

Variable costing= 14,000*33= 462,000

7 0

3 years ago