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Finger [1]
2 years ago
7

Assume the new plant is built and that next year the company manufactures and sells 30,000 balls (the same number as sold last y

ear). Prepare a contribution format income statement and compute the degree of operating leverage.
Business
1 answer:
Olin [163]2 years ago
3 0

Answer:

Instructions are listed below.

Explanation:

A Contribution Margin Income Statement is a special format of the income statement that segregates the variable and fixed expenses involved in running a business. It shows the revenue generated after deducting all variable and fixed expenses separately.

Sales=

Variable costs:

Cost of good sold=

Sales commissions=

Shipping expense=

Total variable cost (-)

Contribution margin=

Fixed costs:

Advertising expense=  

Shipping expense=

Administrative salaries=

Insurance expense=

Depreciation expense=

Total fixed cost= (-)

Net operating profit=

Degree of operating leverage= % change in EBIT/ % change in sales

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If nominal GDP is $900 billion and, on average, each dollar is spent six times in the economy over a year, then the quantity of
NeTakaya

Answer:

Option B (150) is the correct answer.

Explanation:

Given:

Nominal GDP,

= $900

Money velocity,

= 6

As we know,

⇒ Nominal \ GDP=Quantity \ of \ demanded \ money\times Money \ velocity

By putting the vales, we get

⇒                    900=Quantity\times 6  

⇒           Quantity=\frac{900}{6}

⇒                           =150

7 0
2 years ago
You want to start an organic garlic farm. The farm costs $230,000, to be paid in full immediately. Year 1 cash inflow will be $2
Nostrana [21]

Answer:

13.8%

Explanation:

IRR is the discount rate that equates the after tax cash flows from an investment to the amount invested.

IRR can be calculated using a financial calculator:

Cash flow in year 0 =  $-230,000

Cash flow in year 1 =  $25,000

Cash flow in year 2 =  $25,000 x 1.05 = $26,250

Cash flow in year 3 =  $26,250 × 1.05 = $27,562.50

Cash flow in year 4 = $27,562.50 × 1.05 = $28,940.63

Cash flow in year 5 = $28,940.63 × 1.05 = $30,387.66 + $260,000 = $290,387.66

Irr = 13.84%

To find the IRR using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the IRR button and then press the compute button.

I hope my answer helps you

5 0
2 years ago
Cox Co. accounts for its inventory using the LIFO cost method. An inventory loss from a permanent market decline of $360,000 occ
kirill115 [55]

Answer:

$360,000

Explanation:

Last in first out (LIFO) is a method used in inventory where the cost of most recently purchased goods is the one to be expensed first. Also current losses are the first to be reported.

An inventory loss incurred in a quarter must not be deferred, but recorded as items within an interim must be reported in the same period they were incurred, unless it can be redeemed before the end of the fiscal year. It is not considered a temporary item.

The loss reported in May will be reported for that quarter in June.

8 0
3 years ago
A local club is selling Christmas trees and deciding how many to stock for the month of December. If demand is normally distribu
Nastasia [14]

Answer:

0.6

Explanation:

Data provided :

Mean = 100

Standard deviation = 20

Salvage value of the tree = $ 0

Actual cost of the tree = $ 20

Selling cost of the trees = $ 50

Now, the cost of shortage = Selling cost - actual cost = $ 50 - $ 20 = $ 30

and the outrage cost = actual cost = $ 20

Now,

the service level is calculated as:

service level = \frac{\textup{cost of shortage}}{\textup{cost of outrage + cost of shortage}}

on substituting the value, we get

service level = \frac{\$\ 30}{\$\ 20\ +\ \$\ 30}

or

Service level = 0.6

6 0
3 years ago
Market Value Ratios You are considering an investment in Roxie’s Bed & Breakfast Corp. During the last year the firm’s incom
chubhunter [2.5K]

Answer:

Book value per share is $3.5, Earnings per share is $0.48, Market-to-book ratio is 2.0x; P/E ratio = 18.75

Explanation:

1. In order to calculate the book value of the shares we divide the total value of the shares by the number of shares which is $35,000,000/10,000,000 shares = $3.5

2. Earnings per share is derived by dividing the total earnings (after subtracting preference dividends, but in this case we have common stock dividend so we do not subtract) by the number of shares outstanding. i.e. $4,800,000 / 10,000,000 shares = $0.48

3. Market to book ratio is derived by dividing the market value of the outstanding shares by its book value. Therefore ($9*10,000,000 shares)/$35,000,000 = 2.0 (written as 2.0x, implying that the market value of the shares of Roxie's Bed & Breakfast Corp. can cover its net assets (or equity) twice.)

4.The Price Earnings ratio is derived by dividing the Price of the shares by the earnings per share.i.e. $9/0.48(derived in 2 above) = 18.75.

3 0
3 years ago
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