Answer:
The correct option is : b. When volume increases, but at a nonconstant rate.
Explanation:
Curvilinear costs is a type of expense that <u>does not increase at a constant rate with the production volume.</u> It tends to have a sudden increase at low production volumes, then remains constant in the middle and then increases at high production volumes.
The curvilinear costs does not increase linearly with the production. Therefore, curvilinear cost is also called a nonlinear cost.
<u>Therefore, curvilinear costs always increase at a nonconstant rate with the increase in the production volume.</u>
Answer:
O'Hara Marine Co.
Depreciation Expense is:
$13,903
Explanation:
a) Data and Calculations:
sales = $75,500;
costs = $35,200;
addition to retained earnings = $9,580;
dividends paid = $8,420;
interest expense = $2,620;
tax rate = 23 percent
Net Income:
addition to retained earnings = $9,580;
dividends paid = $8,420
Total net income = $18,000
Pre-tax Income = $18,000/0.77 = $23,377
Income tax (23%) of $23,377 = $5,377
After Tax Income = $18,000 ($23,377 - 5,377)
Depreciation:
sales = $75,500
costs = $35,200
Gross profit = $40,300
Less interest (2,620)
Less net income (23,777)
Depreciation = $13,903
Answer:
If volume reaches 500 units, net income will be: $715
Explanation:
When volume of sales was at 400 units:
Selling price per unit = Sales Revenue/400 = $1,600/400 = $4
Variable Cost per unit = Variable Cost/400 = $700/400 = $1.75
If volume reaches 500 units:
Total Sales Revenue = $4 x 500 = $2,000
Variable Cost = $1.75 x 500 = $875
Fixed Cost will not change = $410
Net income = Total Sales Revenue - Variable Cost - Fixed Cost = $2,000 - $875 - $410 = $715
This is an example of "Equilibrium in business"
<u>Explanation:</u>
Equilibrium is the state of balance between market supply and demand, and as a consequence, prices are stable. Over-supply of goods or services generally causes prices to fall, leading to higher demand. The offers and demand balance effect results in a stable state. Here as Denny have good retail distribution network which allow him to supply across city and maintain lower price due to good availability of ice creams. For Denny reaching to the customers was easy via vans, thus his ice-creams had lower price.
Answer:
0.2273
Explanation:
The computation of the tax rate expected to be in year 1 is shown below:-
Depreciation = Operating cash flow - Net income - Interest
= $73,000 - $17,000 - $23,580
= $32,420
Earning before interest and tax = Revenue - Cost - Depreciation
= $157,000 - $79,000 - $32,420 -
= $45,580
Earning before tax = Earning before interest and tax - Interest
= $45,580 - $23,580
= $22,000
Tax rate = Earning before tax - Net income
= $22,000 - $17,000
= $5,000
Tax rate = Tax ÷ EBT
= $5,000 ÷ $22,000
= 0.2273
