The thing that would interest him the most and is an advantage is that if one partner were to make a mistake, he would not be held accountable for it. Unlike the general partnership where everyone gets equal blame for the downfall of a company, in limited liability it is known what falls under whose jurisdiction and if someone causes the company to go bankrupt, the ones whose fault it's not can't get sued.
Decentralization or decentralisation is the process by which the activities of an organization, particularly those regarding planning and decision making, are distributed or delegated away from a central, authoritative location or group.
Answer:
Option (C) is correct.
Explanation:
Variable costs = $28
Allocated fixed costs = $17
Selling price = $84
Due to acceptance of M offer, S would be got excess contribution margin per unit. Because acceptance selling price ($34) is greater than the variable cost per unit ($28).
We don't have any information about the fixed cost due to acceptance. Therefore, we assumed that fixed cost is not increased.
Increased contribution margin per unit:
= Selling price - Variable cost
= $34 - $28
= $6
For 3,000 units, Increased contribution margin = 3,000 × $6
= $18,000
Therefore, net income is increased by $18,000 when the offer is accepted.
Answer:
break even point in units = 2,667
break even point in $ = $33,338
Explanation:
The break even point marks the point where a company is able to cover all its expenses. At this point the company is not losing money, but it is not making a profit either.
break even point in units = total fixed costs / contribution margin
- total fixed costs = $10,000
- contribution margin = $12.50 - ($4 + $4.75) = $12.50 - $8.75 = $3.75
break even point in units = $10,000 / $3.75 = 2,666.67 ≈ 2,667 units
break even point in $ = 2,667 units x $12.50 per unit = $33,337.50 ≈ $33,338
When the bonds will mature, the company will receive, maturity value plus the interest earned on the bonds.
The maturity value will be the par value, as nothing is given, the bonds are redeemed at par value i.e. $ 46,000.
The interest income will be calculated as -
Interest Income = 7 % * $ 46,000 = $ 3,220
Thus, the total cash proceeds = $ 46,000 + $ 3,220 = $ 49,220
