Answer:
b. $85,000
Explanation:
First, we should prepare the analysis of cost savings if the company buys outside.
Analysis of cost and savings
Purchase (5,000 units × $68) = ($340,000)
Savings
Variable cost = $80,000
Fixed cost = $175,000
Net income effect
($85,000)
The effect is a decrease in net income by $85,000.
Answer:
A. $57,000
B. Depreciation rate per mile is $0.19
C. Depreciation is $14,630
Explanation:
a. cost of the truck less the residual value.
Cost of the truck $69,000
Less: Residual value <u>$12,000</u>
$57,000
b. Depreciation rate per mile is computed by dividing cost of the truck less the residual value over the estimated useful life.
$57,000 / 300,000 miles = $0.19
c. Units-of-activity depreciation for the year is computed by multiplying miles driven for the year by depreciation rate per mile.
77,000 miles x $0.19 = $14,630
Answer:
909.09
Explanation:
Breakeven quantity are the number of units produced and sold at which net income is zero
Breakeven quantity = fixed cost / price – variable cost per unit
$20,000 / 58 - 36 = 909.09
Answer:
In other words, if Neha decides to keep the $300 for a cell phone and Teresa decides to contribute the $300 to the public project, then Neha would receive a total benefit of:
$570.
Explanation:
Neha has, in this situation, maximized his benefits to the detriment of the public good. This is an illustration of the tragedy of the commons. The tragedy of the common is an economic problem that explains the loss that the society incurs when some persons like Neha neglect to contribute to the common good because they are solely concentrated on pursuing their individual goals for personal gains.
