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2 years ago

Are the materials costs and processing costs relevant in the choice between alternatives A and B?

Business

1 answer:

podryga [215]2 years ago

4 0

Answer:

Please see explanation.

Explanation:

Material Cost = A cost which is used to prepare a goods or services is termed as material cost.

Processing Cost = When a cost incurs to satisfy customers want from taking orders to ensuring product delivery, it is called processing cost. It includes taking order, tracking, keeping and maintaining inventories, manufacturing products, customer support, and product delivery.

When there are two alternatives including processing and material costs, we have to use three scenarios:

A) In both the alternatives, the material cost is $50,000 and $55,000. The processing cost is $40,000 and $45,000.

In that case, since material cost and processing cost vary from one alternative to another, both the cost are relevant.

B) In both the alternatives, the material cost is $50,000 and $50,000. The processing cost is $40,000 and $45,000.

In that case, since the cost for material in alternative A and B is similar while the processing cost is different, therefore, only processing cost is relevant.

C) In both the alternatives, the material cost is $50,000 and $55,000. The processing cost is $40,000 and $40,000.

In that case, since the cost for material in both the alternatives are different while the processing cost is similar, only material cost is relevant.

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Joss is a marketing consultant. Iris and Daphne are potential customers interested in commissioning Joss to undertake a market s

posledela

Answer: d. both Iris and Daphne will want to purchase Joss's services but Joss will not be willing to undertake the job.

Explanation:

Iris will want Joss's services but they will be unable to afford them as Iris is only willing to pay $500 whereas Joss wants $1,200 for the job.

The same goes for Daphne who is only willing to pay $800.

Both of them will therefore want to hire Joss but will be unable to.

Joss could however charge both of them their willingness to pay and then sum the cash up and give them both the research whilst still making a profit.

6 0

2 years ago

You deposited ($1,000) in a savings account that pays 8 percent interest, compounded quarterly, planning to use it to finish

olga55 [171]

Answer:

Present value (PV) = $1,000

Interest rate (r) =8% = 0.08

Number of years (n) = 18 months = 1.5 years

No of compounding periods in a year = 4

Future value (FV) = ?

FV = PV(1 + r/m)nm

FV = $1,000(1 + 0.08/4)1.5x4

FV = $1,000(1 + 0.02)6

FV = $1,000 x 1.1262

FV = $1,126

Explanation:

The amount to be received in 18 months is $1,126. This is obtained by compounding the present value at 8% compounded quarterly for 18 months. The formula to be applied is the formula for future value of a lump sum(single investment).

4 0

2 years ago

Use the information presented in Northeastern Mutual Bank's balance sheet to answer the following questions.

Nana76 [90]

Answer:

The explanation is given as follows.

Explanation:

Task 1:

The higher the percentage of assets a bank holds as loans, the higher the capital requirement.

When the owners of the bank borrow $100 to supplement their existing reserves , both reserves and debt increase by $100 , therefore increase in debt as in any balance sheet , the total value of accounts on the left hand should be equal to the right hand , so when there is increase in reserves , there will be increase in debt.

Task 2:

It specifies a minimum leverage ratio for all banks

leverage ratio initially = total assets / capital = 1750 / 125 = 14

leverage ratio new value = total assets / capital = 1850 / 125 = 14.8 ( the assets increase by $100 with increase in reserves)

Task 3

Its intended goal is to protect the interests of those who hold equity in the bank.

Capital requirement are there to ensure that bank have enough capital to repay the depositors and debtors and if a bank holds a higher percent of risky assets , capital requirements will be higher so that the bank remains solvent hence option a is right answer.

4 0

3 years ago

An oil and gas producing company owns 42,000 acres of land in a southeastern state. It operates 630 wells which produce 18,000 b

valkas [14]

Answer:

The bid amount should be $13,200,264.

Explanation:

An oil and gas producing company owns 42,000 acres of land in a southeastern state.

It operates 630 wells which produce 18,000 barrels of oil per year and 1.7 million cubic feet of natural gas per year.

The revenue from the oil is $1,800,000 per year and for natural gas the annual revenue is $581,000 per year.

Total Annual Revenue

= Revenue from oil + Revenue from gas

= $1,800,000 + $581,000

= $2,381,000

The bid amount should be the present worth of total annual revenue.

Present Worth of total annual revenue

= $Revenue \times\ \frac{( 1 + i )^{n} -1 }{i (1 + i)^{n} }$

= $$2,381,000\ \times\ \frac{( 1 + 0.11 )^{9} -1 }{0.11 × (1 + 0.11)^{9} }$

= $$2,381,000\ \times\ \frac{( 1.11 )^{9} -1 }{0.11 × (1.11)^{9} }$

= $$2,381,000\ \times\ \frac{2.5580 - 1 }{0.11 × 2.5580 }$

= $$2,381,000\ \times\ \frac{1.5580 }{0.281}$

= $$2,381,000\ \times\ 5.544$

= $13,200,264

7 0

3 years ago

Loni owns a software company and has a great idea for a new app. In order to build the app, she will need to hire a computer exp

never [62]

Answer:

No, Loni should not take the loan and build the app.

Explanation:

If she borrows $87,000 to build the app, at the end of the year she will have to pay $87,000 x (1+0.15) = 100,050 in principal and interest to the bank.

After selling the app she will get 99,000 - 100,050 = $1,050.

In other words, she will be making a loss.

6 0

3 years ago