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makkiz [27]
3 years ago
13

Ruth Company produces 1,000 units of a necessary component with the following costs: Direct Materials $34,000 Direct Labor 15,00

0 Variable Overhead 9,000 Fixed Overhead 10,000 Ruth Company could avoid $6,000 in fixed overhead costs if it acquires the components externally. If cost minimization is the major consideration and the company would prefer to buy the components, what is the maximum external price that Ruth Company would accept to acquire the 1,000 units externally? A. $59,000 B. $64,000 C. $62,000 D. $58,000
Business
1 answer:
Snowcat [4.5K]3 years ago
4 0

Answer:

Option B is correct

The maximum price to be paid is = $64000

Explanation:

To determine the the maximum price we would compute using the relevant costs of internal production.

<em>The maximum price to be paid to external supplier should be the total relevant costs associated with internal production.</em>

Total relevant cost of internal production = 34,000 + 15,000 +9000 + 6000

The maximum price to be paid is = $64000

Note that the fixed overhead  of $6000 is associated with the internal production the balance of 4,000 is irrelevant and would be incurred either way.

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Which of the following correctly defines a​ product?
Alisiya [41]

Answer: Option C            

                           

Explanation: In simple words, a product refers to an entity that that could be tangible or intangible and is produced by the manufacturer for satisfying the wants of its customers.

Hence anything that is offered to the market and has the ability to satisfy the needs of specified individuals will be classified as a product.

Thus, the correct option is C.

7 0
3 years ago
Break-Even Sales and Sales to Realize Income from Operations
strojnjashka [21]

Answer and Explanation:

The computation is shown below:

a.

Contribution per unit

= Selling price per unit - Variable costs per unit

= $300 - $200

= $100 per unit

Now  

Break even point (units)

= Fixed costs ÷ Contribution margin per unit

= $14,000,000 ÷ $100

= 140,000 units

And,

b)

Sales units required for a target profit of $1,400,000

So,

= (Fixed costs + Target profits) ÷ Contribution margin per unit

= ($14,000,000 + $1,400,000) ÷ $100

= 154,000 units

4 0
3 years ago
A jewelry firm buys semiprecious stones to make bracelets and rings. The supplier quotes a price of $8.20 per stone for quantiti
Ket [755]

Answer:

a. 274

b. 295

Explanation:

a. Optimum Order

Optimum Order = √( (2×Total Annual Demand×Ordering cost per order) / Holding Cost per unit)

                          = √ ((2×101×19×$39) / $2)

                          = 273.57

                          = 274

b. Optimum Order

Optimum Order = √( (2×Total Annual Demand×Ordering cost per order) / Holding Cost per unit)

                          = √ ((2×101×19×$39) / $8.20 ×0.21)

                          = 294.83

                          = 295

                   

4 0
3 years ago
The United States may have a tariff on cotton products from China in order to. a. prevent Chinese manufacturers from losing prof
ivolga24 [154]
The United States may have a tariff on cotton products from China in order to protect the business of the American cotton growers and manufacturers. The correct answer is B. 
3 0
3 years ago
Read 2 more answers
If occupational safety laws were changed so that firms no longer had to take expensive steps to meet regulatory requirements, we
Ket [755]

Answer: competition would force producers to pass the lower production costs on to consumers in the long run

Explanation:

Occupational safety law deals with the health and safety of workers at their workplace and safety for activities outside of work. It is the function of employers to take care of their employees safety.

In a case whereby the occupational safety laws are changed so that the firms will no longer take expensive steps in order to meet regulatory requirements, there would be more competition which would lead to reduction on prices as a result of lower production cost which would be eventually passed from the producers to the consumers in the long run.

4 0
3 years ago
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