Answer: b. Access to additional knowledge and expertise.
Explanation:
One of the advantages of opening a limited company be it private or public, is the additional knowledge that the other shareholders would bring on board.
In the case of a private company, the new shareholders would be from various backgrounds and would have knowledge on how to grow the business and in the case of a public company, the Board of Directors are usually drawn from various industries and so will put their experience from those industries into the company thereby giving it an edge.
Missing information:
Corporation makes 5,700 units of part U13 each year. This part is used in one of the company's products. The company's Accounting Department reports the following costs of producing the part at this level of activity: Per Unit Direct materials $9.60 Direct labor $7.80 Variable manufacturing overhead $10.20 Supervisor's salary $5.90 Depreciation of special equipment $8.80 Allocated general overhead $8.00 An outside supplier has offered to make and sell the part to the company for $25.10 each.
Answer:
annual financial advantage of purchasing part from outside vendor = $73,380
Explanation:
current production costs per unit:
- direct materials $9.60
- direct labor $7.80
- variable manufacturing overhead $10.20
- supervisor's salary $5.90
- depreciation of special equipment $8.80
- allocated general overhead (fixed) $8.00
- total current costs per unit = $50.30
- total costs $50.30 x 5,700 units = $286,710
costs if company decides to purchase the part form outside vendor:
- purchase cost per unit $25.10
- deprecation of special equipment $8.80
- allocated general overhead $8.00
- total costs per unit = $41.90
- total costs $41.90 x 5,700 = $238,830
- - revenue generated from using facility space = $238,830 - $25,500 = $213,330
annual financial advantage of purchasing part from outside vendor = $286,710 - $213,330 = $73,380
Answer:
Effective Annual Rate = 8.1600%
Explanation:
The effective annual rate the interest rate that is adjusted for compounding over a given period of time. It is given by the formula:
