Answer:
V) You cannot determine which project should be accepted given the information provided.
Explanation:
The best way to determine which project to accept or reject is the net present value (NPV) and we do not have enough information to calculate it. Both projects have positive internal rates of return (IRR), but does any of them have a positive NPV? We cannot tell, so it is not possible to choose one or the other.
Answer:
a. $75 an hour for a total of $32,250
Explanation:
The computation of the allocation rate and how much cost is to be allocated is shown below:
Fixed cost per hour = $146,200 ÷ 3,400 hours = $43
Variable cost per hour = $32
So, the total cost per hour equal to
= Fixed cost per hour + Variable cost per hour
= $43 + $32
= $75
And, the total cost allocated is
= 430 hours × $75
= $32,250
Answer:
If a company must expand capacity to accept a special order, it is likely that there will be an increase in fixed costs.
Explanation:
The fixed costs are the part of the total costs of production that remain constant during a given reference quantity in a certain period. These include, for example, depreciation of fixed assets or rental or interest expenses. Since fixed costs are incurred regardless of the application quantity (short-term), they cannot be apportioned to the unit costs according to the cause.
In the present case, given that the company must expand its capacity to take the special order, it means that all of its production factors are totally devoted to production, so that in order to produce a greater quantity of goods, the productive factors must be increased, which are part of the fixed production costs that the company has. Therefore, as the costs of production are altered, there will be an increase in fixed costs.
Answer:
break-even level of revenues increases from $2,890,625 to $3,500,000
Explanation:
Break even point is the level of sales at which the company makes neither a Profit nor a loss.
Break -even Sales revenue = Fixed Cost / Contribution Margin Ratio
<u>Old Break -even Sales revenue </u>
Break -even Sales revenue = ( $800,000 + $125,000)/(1.00-0.68)
= $925,000/ 0.32
= $2,890,625
<u>Old Break -even Sales revenue </u>
Break -even Sales revenue = ( $600,000 + $100,000)/(1.00-0.80)
= $700,000/ 0.20
= $3,500,000
C is hit by a falling swinging flying or rolling object.