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NemiM [27]
4 years ago
5

Seven Seas Boat Company manufactures 100 luxury yachts per month. A security system is included in each yacht. Seven Seas Boat C

ompany manufactures the security system​ in-house. The company is considering the possibility of outsourcing the production of the security system in order to close down some of its facilities and reduce administrative costs. At​ present, the variable cost per unit is​ $300, and fixed costs are​ $38,000 per month. Assuming the company outsources the production of the security system and the fixed costs could be eliminated​ entirely, at what contract cost would outsourcing pay off for Seven​ Seas? (Round to the nearest whole​ dollar.)
Business
1 answer:
Schach [20]4 years ago
8 0

Answer:

The maximum price is $680

Explanation:

Giving the following information:

At​ present, the variable cost per unit is​ $300, and fixed costs are​ $38,000 per month. Assuming the company outsources the production of the security system and the fixed costs could be eliminated​.

Seven Seas Boat Company manufactures 100 luxury yachts per month.

Make in house:

Total unitary cost= 300 + 38,000/100= $680

The maximum price is $680

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olga55 [171]

Answer:

The resource owners acts as the suppliers of factors of production like land, labor, capital or entrepreneurship to the businesses which pay these resource owners with either wages, rent, interest or profit.

5 0
3 years ago
Summer 20 Corp estimates overhead based on direct labor hours and has given you the following information:
Akimi4 [234]

Answer:

Results are below.

Explanation:

<u>To calculate the predetermined manufacturing overhead rate we need to use the following formula:</u>

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 405,000 / 220,000

Predetermined manufacturing overhead rate= $1.841 per DLH

<u>Now, we can allocate overhead:</u>

<u></u>

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 1.841*202,000

Allocated MOH= $371,882

<u>Finally, the over/under allocation:</u>

Under/over applied overhead= real overhead - allocated overhead

Under/over applied overhead= 380,000 - 371,882

Underapplied overhead= $8,118

6 0
3 years ago
Your company currently has par, coupon bonds with 10 years to maturity and a price of . If you want to issue new 10-year coupon
vovangra [49]

Answer:

I looked for the missing numbers and found the following question:

Your company currently has $1,000 ​par, 6.5% coupon bonds with 10 years to maturity and a price of $1,078. If you want to issue new​ 10-year coupon bonds at​ par, what coupon rate do you need to​set? Assume that for both​ bonds, the next coupon payment is due in exactly six months.

We need to calculate the yield to maturity (YTM) of the current bonds. Since the bonds pay interests every 6 months, then the coupon = $32.50

YTM = {coupon + [(face value - market value)/n]}/[(face value + market value)/2]

YTM = {32.5 + [(1,000 - 1,078)/20]}/[(1,000 + 1,078)/2]

YTM = 28.6 / 1,039 = 0.275 x 2 = 5.5053% ≈ 5.51%

In order to sell the new bonds at par, the coupon rate must be 5.51%

3 0
3 years ago
Gina is buying 1,000 shares in an IPO of ABC Corporation. She is buying them through a _____.
Scrat [10]
Primary market help this helps
5 0
4 years ago
Butler Automotive developed a new diagnostic testing procedure that is expected to increase sales by $10,000 per month. As more
Bas_tet [7]

Answer:

A

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It is made up of cash , receivable , payable , inventory balance .

Due to the new development in the business of Butler automotive , there is an upsurge in the demand for oil which has led to the increase in the oil inventory to the tune of $5,000

This means that the required working capital of Butler also has to increase to meet up with the demand.

6 0
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