Answer:
Decrease in Net operating income ($30,000)
Explanation:
The computation of the change in net operating income is shown below:
Particulars Rubber Division
Lost of Contribution margin ($100,000)
Savings from avoidable fixed costs :
Traceable fixed costs $70,000
Decrease in Net operating income ($30,000)
We simply deduct the traceable fixed cost from the loss of contribution margin so that the change in net operating income could come
The statement above is popularly referred to as Whorfian hypothesis. The hypothesis states that language directly affects the way people think about the world and the way they perceive it, thus it holds the idea that one's language determines one's conception of the world.
A because if the firm is switching from cow milk to soya milk, suppler will be threatened and will be motivated to produce in large supply
By the use of Lifo in a period where the prices rise, companies avoid to report paper profit, also called phantom profit, as economic gain. Have in mind that in periods of changing prices, the cost flow assumption can have a significant impact onincome and on evaluations based on income. That is why when Lifo is used the companies tend to <span>report the lowest net income </span>
Answer:
For now, it is better to keep producing in house. If demand increases, Pottery Ranch must outsource some of the production.
Explanation:
Giving the following information:
The variable manufacturing overhead is charged to production at a rate of 63% of direct labor cost. The direct materials and direct labor cost per unit to make a pair of finials are $3.51 and $4.73, respectively. Normal production is 28,300 curtain rods per year.
A supplier offers to make a pair of finials for $13.20 per unit.
Fixed costs are a sunk cost, therefore it is not taken into account.
Make in house:
Unitary cost= 3.51 + 4.73 + (4.73*0.63)= $11,22
Outsource:
Unitary cost= 13.20
For now, it is better to keep producing in house. If demand increases, Pottery Ranch must outsource some of the production.
