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pychu [463]
3 years ago
12

Chromatics, Inc., produces novelty nail polishes. Each bottle sells for 3.60. Variable unit costs are as follows:

Business
1 answer:
devlian [24]3 years ago
8 0

Answer:

Margin of safety= 9,000 units

Explanation:

Giving the following information:

Each bottle sells for 3.60.

Variable unit costs are as follows:

Acrylic base- .75

Pigments- .38

Other ingredients- .35

Bottle, packing material- 1.15

Selling commission- .25

Fixed overhead costs are 12000 per year. Fixed selling and administrative costs are 6720 per year. Chromatics sold 35000 bottles last year.

First, we need to calculate the variable cost per unit and total fixed costs:

Unitary variable cost= 0.75 + 0.38 + 0.35 + 1.15 + 0.25= $2.88

Total fixed costs= fixed overhead + fixed selling and administrative= 12,000 + 6,720= 18,720

Now, we can calculate the break-even point in units:

Break-even point= fixed costs/ contribution margin

Break-even point= 18,720 / (3.6 - 2.88)= 26,000 units

Margin of safety ratio= (current sales level - break-even point)

Margin of safety ratio= 35,000 - 26,000= 9,000 units

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Answer:

The correct answer is option (b) Little capital

Explanation:

Solution

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The option (a) is not correct as possession of a partner will not lead her to start a sole proprietorship business.

Also the option (c) is not correct the avoidance of personal liability is not the reason because in sole proprietorship, Lily will be liable for her debts.

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2 years ago
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Andrews [41]

Answer:

Explanation:

The accounting equation is presented below:

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                        Cash     Supplies          Account payable              Retained earnings

1. Service

Performed       $20,000                                                                    $20,000

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3. Supplies

Used                              -$3,000                                                         -$3,000

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6 0
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blondinia [14]

Answer:

There is sacrifice to having your own business. Sam wasn't ready to invest the hours needed to make it on his own.

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Most people who find success in the world of entrepreneurship are working longer, harder days than the average “traditional” employee. You do have some flexibility when putting in those hours, so you can structure medical appointments, school visits, and other family needs within your day. You do not have the luxury of cutting back on your hours most days.

There is sacrifice to having your own business. Sam wasn't ready to invest the hours needed to make it on his own.

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Lyrx [107]

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C

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7 0
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Vlad1618 [11]

Answer:

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Explanation:

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Putting the values in equation 1,

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Unemployment Rate = 42.85

7 0
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