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babunello [35]
3 years ago
10

A manufacturing firm is considering two locations for a plant to produce a new product. The two locations have fixed and variabl

e costs as follows: The locations area: Atlanta ($80,000, $20) and Phoenix ($140,000, $16) . The first number with in the parentheses is the fixed cost and the second number is the variable cost per unit If the annual demand is 20,000 units, what would be the cost advantage of the better location? Select one: A. $60,000 B. $80,000 C. $480,000 D. $20,000 E. $460,000
Business
1 answer:
Dmitry [639]3 years ago
7 0

Answer:

D. $20,000

Explanation:

Considering the cost elements of Atlanta

Fixed cost = $80,000

Variable cost per unit = $20

Where 20,000 units are produced (to meet annual demands)

Total cost = 80,000 + (20000 × 20)

                = 80,000 + 400,000

                = $480,000

Considering the cost elements of Phoenix

Fixed cost = $140,000

Variable cost per unit = $16

Where 20,000 units are produced (to meet annual demands)

Total cost = 140,000 + (20000 × 16)

                = 140,000 + 320,000

                = $460,000

Comparing the cost of production in the two locations, the cost advantage of the better location (Phoenix)

= 480,000 - 460,000

= $20,000

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elena-s [515]

Answer:

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Explanation:

A statement of cash flows with amounts in thousands can be created to determine the Net Cash Flow as follows:

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<u>Details                                                                    $'000    </u>

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Net Cash Flow from Operating Activities         10,200

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Since the amount is in thousands, that implies that  the Net Cash Flow is $9,300,000.

7 0
3 years ago
Iris Company has provided the following information regarding two of its items of inventory at year-end: There are 160 units of
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Answer:

$7,840

Explanation:

The inventory of Items A and B should be valued at the lower of cost and the net realizable value.

The cost is the invoice price at time of purchase ,while the net realizable value is the selling price less to sell

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   A                         $18               $22                $6     $16             $16

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Item A is valued at $16 each i.e $16*160=$2,560

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The ending inventory valued at the lower of cost or net realizable value is worth $7,840

6 0
3 years ago
Berry Co. purchases a patent on January 1, 2021, for $33,000 and the patent has an expected useful life of five years with no re
Ghella [55]

Answer:

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Hence, estimated cost of the ending inventory under the gross profit method would be $60000.

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