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creativ13 [48]
2 years ago
13

Paxton Company can produce a component of its product that incurs the following costs per unit: direct materials, $9.90; direct

labor, $13.90, variable overhead $2.90 and fixed overhead, $7.90. An outside supplier has offered to sell the product to Paxton for $34.60. Compute the net incremental cost or savings of buying the component.
a.$2.90 cost per unit.
b. $7.90 savings per unit.
c. $0 cost or savings per unit.
d. $7.90 cost per unit.
e. $2.90 savings per unit.
Business
1 answer:
matrenka [14]2 years ago
7 0

Answer:

D) $7.90 cost per unit

Explanation:

This can be calculated by identifying the relevant costs that will be affected by the transaction. $7.9 is a fixed overhead and will be paid regardless of producing the component in house or purchasing from an external source thus this needs to be omitted from the calculation. So the new cost of producing in house is,

Relevant Cost = 9.9 + 13.90 + 2.9 = $26.7

Thus the incremental cost of this transaction would be

Incremental Cost = 34.60 - 26.7 = $7.90

It is not advisable to purchase this as if they do they will have to pay $34.60 for purchase and would also have to absorb $7.90 of fixed overheads bringing the total cost incurred to 34.60 + 7.90 =$42.5

Hope that helps.

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Rebekah Grace has worked for Specoly Inc., for 20 years without taking a vacation. An internal control feature that would address this situation would be "Other human resource controls".

<h3>What is internal control?</h3>

Internal control is a procedure carried out by a company's board of directors, management, and other staff members and intended to give a reasonable level of assurance that the information is trustworthy, accurate, and timely of conformity with pertinent laws, rules, agreements, policies, and procedures.

An internal control framework is made up of five interconnected elements:

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3 0
2 years ago
Prospective financial information presented in the format of historical financial statements that omit either gross profit or ne
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Answer:

The correct answer is Partial presentation.

Explanation:

Having the minimum presentation guidelines, the financial statements may be converted to basic statements or otherwise adapted to certain guidelines. The presentation is considered partial if it does not take into account one of the following items: (1) gross sales or income, (2) gross profit or cost of sales, (3) unusual or infrequent items, (4) provision for income taxes, (5) discontinued operations or extraordinary items, (6) income from continuing operations, (7) net income, (8) basic and diluted earnings per share, (9) significant changes in financial position.

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2 years ago
There's a large number of bakeries in the United States and each of these bakeries produces similar, but not identical, products
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Answer:

monopolistic competition

Explanation:

Monopolistic competition -

It refers to a type of competition , where the some sellers sell similar products but exactly the same , is referred to as monopolistic competition .

The goods and services are not exactly the copy of each other , rather are just similar in nature , with similar components .

Hence , from the given scenario of the question ,

The correct answer is monopolistic competition .

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3 years ago
Suppose France can produce four phones or three computers with one unit of labor, and Sweden can produce one phone or two comput
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Answer:

France should specialize in producing phones and import computers from Sweden

Explanation:

France can produce: 4 phones or 3 computers

The opportunity cost of producing 1 phone = (3 ÷ 4)

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The opportunity cost of producing 1 computer = (4 ÷ 3)

                                                                        = 1.33 phones

Sweden can produce: 1 phone or 2 computers

The opportunity cost of producing 1 phone = (2 ÷ 1)

                                                                        = 2 computers

The opportunity cost of producing 1 computer = (1 ÷ 2)

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According to the comparative advantage,

Sweden has a comparative advantage in producing computers because the opportunity cost of producing computers is lower for Sweden than for France.

France has a comparative advantage in producing phones because the opportunity cost of producing phones is lower for France than for Sweden and import computers from Sweden because Sweden has a comparative advantage in producing computers.

7 0
2 years ago
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Answer:

fiscal policies

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Fiscal policy refers to the way that the government modifies its total spending and tax rates in order to guide the nation's economy. Fiscal policies work together with monetary policies (regulation of money supply) as a government attempt to influence the economic cycle. When the government implements an expansionary fiscal policy(increase spending and decrease taxes) it will attempt to boost economic growth.

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