1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Airida [17]
2 years ago
9

Assuming no direct factory overhead costs (i.e., inventory carry costs) and $3 million dollars in combined promotion and sales b

udget, the Bit product manager wishes to achieve a product contribution margin of 35%. Given their product currently is priced at $35.00, what would they need to limit the material and labor costs to?
Business
1 answer:
MakcuM [25]2 years ago
8 0

Answer:

they need to limit the material and labor costs to $22.75

Explanation:

given data

combined promotion = $3 million

contribution margin ratio = 35%

Selling price = $35 per unit

to find out

what would they need to limit the material and labor costs to

solution

we get here Contribution margin per unit that is express as  

Contribution margin per unit = $35 × 35%

Contribution margin per unit = $12.25 per unit

and Variable cost will be  

Variable cost = $35 - $12.25

Variable cost = $22.75 per unit

and we know Variable cost is also express as  

Variable cost = Direct materials costs + Direct labor costs + Direct factory overheads   ..............1

here direct factory overheads is  0 and Direct materials costs + Direct labor costs is $22.75

so put in equation 1

Variable cost =  $22.75  + 0 =  $22.75

so we can say that they need to limit the material and labor costs to $22.75

You might be interested in
Borghia Pharmaceuticals has $1 million allocated for capital expenditures. a. Which of the following projects should the company
balu736 [363]

Answer:

Please refer below the answer in detail

Explanation:

a)

With a limited budget, the firm will first pursue projects with the highest return, and the allocate the remaining capital to the project with the second highest return, and so on until all capital is fully allocated. Based on the information, Project 6 has the highest return, followed by 1 and 3. These three projects together will cost:

350,000 + 300,000 + 250,000 = $900,000

After those three projects, the firm will have $100,000 left. The best out of remaining project is 7, but it costs 400,000, which the firm cannot afford. The best affordable project is 4, which offers a return of 12.1%. Hence, the firm should spend the remaining 100,000 on project 4.

b)

The budget limit constraints the firm to give up project 7, which offers a NPV of $48,000. The firm is forced to choose project 4, which has a NPV of $14,000.

Thus the lost in market value of the firm = 48,000 - 14,000 = $34,000.

4 0
2 years ago
Senator Bright, who understands economic principles, is trying to convince workers in her district that trade with other countri
tankabanditka [31]

Answer:

b) because it allows specialization, which increases total output

Explanation:

Specialization is when a nation or individual concentrates its productive efforts on producing a limited variety of goods. It oftentimes has to forgo producing other goods and relies on obtaining those other goods through trade.

5 0
3 years ago
What type of brake lining is typically used on heavy-duty vehicles?
galina1969 [7]

For heavy-duty vehicles, sintered-metal brake linings are typically use for better performance and brake lining rivets is the best choice to secure brake shoe linings on trucks and other vehicles. Sintered brake linings offers a stable friction coefficient and produce good bite right away for safer travel. Moreover, they have good properties such as the ability to handle extreme heat well, they are resistant to fade, typically last longer than other types, and perform well even in rain and mud, which make it to be a choice for heavy-duty vehicles. <span>However, rivet heads may score the drum if the linings are not replaced soon enough, so proper maintenance should not be neglected.</span>

3 0
3 years ago
A department adds raw materials to a process at the beginning of the process and incurs conversion costs uniformly throughout th
Sav [38]

Answer:

Equivalent units of production= 68,000 units

Explanation:

Giving the following information:

Units started and completed= 80,000 - 20,000= 60,000

Units in ending inventory= 20,000 nits that were 40% complete in the ending work in process inventory at the end of January.

<u>To calculate the equivalent units for conversion costs, we need to use the following formula:</u>

Units completed in the period + Equivalent units in ending inventory WIP (units*%completion) = Equivalent units of production

Equivalent units of production= 60,000 + (20,000*0.4)

Equivalent units of production= 68,000 units

5 0
3 years ago
During the year, the Senbet Discount Tire Company had gross sales of $865,000. The firm’s cost of goods sold and selling expense
Svetllana [295]

Answer:Net Income =  $68,730  ; Operating cash flow=$181,730

Explanation:

Gross sales                        $865,000

Less:

Cost of good sold               $455,000

 selling Expenses                 $210,000

Total                                     $200,000

Interest on notes  $200,00 X 4% = 8,000

Depreciation                         $105,000

EBT                                          $87,000

 (  $865,000-    $455,000-    $210,000- $8,000 - $105,000  )          

less tax at  21%                             $18,270

(87,000 x 0.21)

Net Income                                 $68,730 

(87,000 - 18,270)

b) Operating cash flow = Net income + depreciation + interest

                                $68,730 + $105,000 +   $8,000     =$181,730

3 0
2 years ago
Other questions:
  • When a firm enjoys a competitive advantage, it attracts a significant amount of attention and its products or services can be at
    9·2 answers
  • Suppose the market for corn is a purely competitive, constant-cost industry that is in long-run equilibrium. now assume that an
    12·1 answer
  • At an auction sale, the buyer is the party making the offer, or bid. <br> a. True <br> b. False
    8·2 answers
  • The Appleton entity established a $200 Petty Cash fund on June 1, 200X. On June 30, 200X the fund had $45 in cash and the follow
    5·1 answer
  • When labor unions successfully bargain for wage rates that are _____ the equilibrium wage rate, they may cause _____. higher tha
    15·1 answer
  • Williams Inc. is expected to pay a $5 dividend next year and that dividend is expected to grow at 2.5% every year thereafter. If
    11·1 answer
  • Upon review of the effectiveness of a strategic business decision using evidence-based analytics, business leaders may reverse c
    12·1 answer
  • What is monetary policy involves decreasing the money supply.
    9·1 answer
  • The Converting Department of Soft Touch Towel and Tissue Company had 760 units in work in process at the beginning of the period
    15·1 answer
  • Last year Wei Guan Inc. had $795 million of sales, and it had $265 million of fixed assets that were used at 65% of capacity. In
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!