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LekaFEV [45]
3 years ago
11

Eley Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's nor

mal activity level of 40,000 units per month is as follows:Direct materials $ 43.8Direct labor $ 10.4Variable manufacturing overhead $ 1.9Fixed manufacturing overhead $ 26.0Variable selling & administrative expense $ 2.4Fixed selling & administrative expense $ 13.8The normal selling price of the product is $104.4 per unit.An order has been received from an overseas customer for 1,650 units to be delivered this month at a special discounted price. This order would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be $1.8 less per unit on this order than on normal sales.Direct labor is a variable cost in this company.What is the contribution margin per unit on normal sales?
Business
1 answer:
Over [174]3 years ago
5 0

Answer:

Contribution margin per unit = $45.90

Contribution margin as sales percentage = 43.97%

Explanation:

As for the information provided we have,

Normal Sales = Normal sales per month, before the overseas order.

For such normal sales, the cost and sales data has been provided,

Selling price per unit = $104.40

Variable costs = Direct material + Direct Labor + Variable Manufacturing + Variable selling & Administrative

= $43.80 + $10.40 + $1.90 + $2.40 = $58.50

Contribution margin per unit = Selling price - Variable cost per unit = $104.40 - $58.50 = $45.90

Contribution margin as sales percentage = \frac{45.90}{104.40} \times 100 = 43.97%

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If a 20 percent increase in the price of Red Bull energy drinks results in a decrease in quantity demanded of 25 percent, we say
Ierofanga [76]

Answer:

Elastic

Explanation:

Elasticity of demand = percentage change in quantity demanded / percentage change in price

25% / 20% = 1.25

If the elasticity of demand is greater than one ,it means demand is elastic.

Elastic demand is when a change in price leads to a greater change in quantity demanded.

I hope my answer helps you

3 0
3 years ago
1. A new furnace for your small factory will cost $27,000 to install and will require ongoing maintenance expenditures of $1,500
Marina CMI [18]

Answer:

payback 3.29 years

NPV 87,158.55

Explanation:

PO 27,000

<u>Cash flow saving Y1 </u>

2400 x 3.5 = 8,400

expenditures (1,500)

net savings   6,900

<u>Cash flow saving Y2 </u>

The price will increase 0.5

6,900 + 2,400 x 0.5 = 8,100

<u>Cash flow saving Y3 to Y20</u>

The price will increase 0.5

8,100 + 2,400 x 0.5 = 9,300

We have an annuity of 18 years for 9,300 cash

And then we have a cash flow of 6,900

and another of 8,100

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C = 9,300

r = 8%

time = 18

9,300 \times \frac{1-(1+0.08)^{-18} }{0.08} = PV\\

PV =  87,158.55

Now this values are years into the future, so we need to bring them to present day.

\frac{Principal}{(1 + rate)^{time} } = PV

year 1 principal 6,900

6,900/1.08 = 6,388.89

year 2 principal 8,100

\frac{8,100}{(1 + 0.08)^{2} } = PV

PV= 5,915.64

year 3 annuity 87,158.55

\frac{87,158.55}{(1 + 0.08)^{3} } = PV

PV= 69,189.27

cash flow - investment = net present value

69,189.27 + 5,915.64 + 6,388.89 - 27,000 = 54,493.8

The payback will be the time perdion when the project recovers it initial cost:

we first add the income from the irregular years and subtract from the investment

6,900 + 8,100 = 15,000

27,000 - 15,000 = 12,000

then we use the general formula investment/cash flow per year

12,000/9,300 = 1.29

the project need the first two years and then 1.29 years

2 + 1.29 = 3.29 years

6 0
3 years ago
A corporation sold 1,000 shares of its $2.00 par value common stock for $10.00 per share and later repurchased 100 of those shar
boyakko [2]

Answer:

Option B. Treasury Stock for $1,200

Explanation:

The reason is that when 1,000 shares which has $2 par value and were issued at $10 per share, the journal entry was:

Dr Cash Account $10,000

Cr       Common Stock $2,000

Cr       Paid In Capital   $8,000

But when 100 shares were repurchased at $12 per share, then the accounting treatment would be

Dr Treasury Stock $1,200

Cr         Cash Account $1,200

So the correct option is option B.

5 0
3 years ago
A company sold equipment that originally cost $100,000 for $60,000 cash. The accumulated depreciation on the equipment was $40,0
Maurinko [17]

Answer:

$0 Gain or Loss

Explanation:

Given that,

Original cost of the equipment = $100,000

Accumulated depreciation on the equipment = $40,000

Book value of the equipment:

= Original cost of the equipment - Accumulated depreciation on the equipment

= $100,000 - $40,000

= $60,000

Gain/Loss = Sale value - Book value of the equipment

                 = $60,000 - $60,000

                 = $0

Therefore, the company should recognize a $0 Gain or Loss.

7 0
3 years ago
As of December 31, 2015, Juneau Company had total cash of $155,000, notes payable of $85,600, and common stock of $52,400. Durin
Illusion [34]

Answer:

ending RE 30,000

Explanation:

Using the acounting equation we solve for the beginning RE

<em>Assets = liab + equity</em>

155,000 = 85,600 + 52,400 + Retained Earnings

155,000 - 85,600 - 52,400 = <em>17,000</em>

beginning RE 17,000

net income

revenues 36,000 - 20,000 expenses = 16,000

dividends: 3,000

ending RE: 17,000 + 16,000 - 3,000 = 30,000

6 0
3 years ago
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