The computation follows:
1. Solve first for the variable cost per unit.
Direct materials $ 6.00
<span>Direct labor $ 3.50
</span>
<span>Variable manufacturing overhead $ 1.50
</span>
<span>Sales commissions $ 1.00
</span>
<span>Variable administrative expense $ 0.50
</span>
<span>= $12.50 variable cost per unit
2. Then deduct the selling price to the variable cost per unit, to get the contribution margin.
</span><span>22 - 12.50 = $9.50 CM per unit</span>
Answer:
do not Install guard rail because the guard rail cost exceed the expected benefits
Explanation:
given data
guard rail cost = $70,000
average damage = $10,000
guard rail prevent = 5 vehicles
to find out
What should the county do
solution
we know here guard rail cost is $70,000
but expected benefits = $10,000 × 5
expected benefits = $50,000
so we can say that do not Install guard rail because the guard rail cost exceed the expected benefits
Answer:
False
Explanation:
If a firm sells on terms of 2/10, net 30 days, and its DSO is 28 days, then the fact that the 28-day DSO is less than the 30-day credit period tell us that the credit department is functioning efficiently and there are no past due accounts. This is a false statement.
Answer:The cost of capital that will make both investments equal is 17.045%
Explanation:
Investment A
$1.5 million will be received in perpetuity we can there use perpetuity formula to Value investment A.
Value of Investment A = 1500 000/r
Investment B
$1.2 Million will be received in Investment B with a growth rate of 3% will then use Gordon's growth rate model to value investment B.
Value of investment B = (1200 000 x (1+0.03))/(r - 0.03)
Value of investment B = 1236000/(r - 0.03)
1500 000/r = 1236000/(r - 0.03)
1236000(r) = 1500000(r - 0.03)
(r - 0.03) = 1236000( r)/1500000
r - 0.03 = 0.824r
r - 0.824r = 0.03 = 0.176r = 0.03
r = 0.03/0.176 = 0.170454545
R = 17.045%
The cost of capital that will make both investments to be equal is 17.045%
