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Kazeer [188]
3 years ago
11

Charlie Corporation is considering buying a new donut maker. This machine will replace an old donut maker that still has a usefu

l life of 6 years. The new machine will cost $3,730 a year to operate, as opposed to the old machine, which costs $4,125 per year to operate. Also, because of increased capacity, an additional 21,300 donuts a year can be produced. The company makes a contribution margin of $0.10 per donut. The old machine can be sold for $8,300 and the new machine costs $31,300. The incremental annual net cash inflows provided by the new machine would be (Ignore income taxes.):
Business
1 answer:
mariarad [96]3 years ago
3 0

Answer:

The incremental annual net cash inflows provided by the new machine would be $2,525.

Explanation:

In order to calculate the incremental annual net cash inflows provided by the new machine we would have to use the following formula:

incremental annual net cash inflows=saving in annual operating cost+contribution earned on additional sales

                                                        =( $4,125-$3,730)+(21,300×$0.10)

                                                        =$395+$2,130

                                                        =$2,525

Hence, The incremental annual net cash inflows provided by the new machine would be $2,525.

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Holmes Company produces a product that can either be sold as is or processed further. Holmes has already spent $50,000 to produc
Xelga [282]

Answer:

It is more profitable to continue processing.

Explanation:

Giving the following information:

The number of units= 1,250

It can be sold now for $67,500 to another manufacturer.

Alternatively, Holmes can process the units further at an incremental cost of $250 per unit. If Holmes processes further, the units can be sold for $375 each.

<u>The $50,000 is a sunk cost, meaning that it has already happened. It shouldn't be taken into account.</u>

Sell as it is:

Income= $67,500

Continue production:

Income= 1,250*(375 - 250)= $156,250

It is more profitable to continue processing.

6 0
3 years ago
According to purchasing-power parity, if it took 58 Indian rupees to buy a dollar today, but it took 55 to buy it a year ago, th
oksano4ka [1.4K]

Answer:

Given that,

Current exchange rate between India and U.S :

1 Dollar = Rs. 58

Exchange rate between India and U.S a year ago :

1 Dollar = Rs. 55

Above information conclude that the currency of India depreciates whereas  currency of united states appreciates.

This is due to the increase in the exchange rate in India. Now, a dollar become more expensive than it a year ago.

So, the Indian rupee depreciated and U.S dollar appreciated.

 

3 0
3 years ago
Describe the origins, purposes, and practices of the "long drive" and the "open range" cattle industry. What ended this brief bu
Snezhnost [94]

Answer:

The cattle industry began in the far west and furnished the great plain areas with livestock. The cattle industry progressively lost its relevance because of the excessive westward expansion, resulting in competition for the industry. There was too much cattle, but not enough food and land to sustain such great populations of livestock.

4 0
3 years ago
Mariah works at a daycare center. She makes $17 per hour and works about 36 hours each week. What type of wages does she earn?
Harrizon [31]

Answer:

Hourly

Explanation:

Hourly because it says she's paid by the hour.

4 0
3 years ago
Read 2 more answers
The following selected information was extracted from the 20x1 accounting records of Lone Oak Products:
joja [24]

Answer:

1. $513,000

2. $913,200

3. $926,400

4. $154,420

5.11340 Units

Explanation:

1. Calculation for Lone Oak’s manufacturing overhead for the year.

Manufacturing overhead

Indirect labor 109,000

Building depreciation (80000*75%) 60,000

Other factory cost 344,000

Manufacturing overhead $513,000

2. Calculation for Lone Oak’s cost of goods manufactured.

First step is to calculate the Direct material used

Direct material used = 15,800+175000-18200

Direct material used= 172,600

Second step is to calculate the Total manufacturing cost

Total manufacturing cost = 172,600+254,000+513,000

Total manufacturing cost= 939,600

Now let calculate the Cost of goods manufactured

Cost of goods manufactured = 35,700+939,600-62100

Cost of goods manufactured = $913,200

3. Compution for the company’s cost of goods sold.

Cost of goods sold = 111100+913,200-97900

Cost of goods sold = $926,400

4. Calculation to Determine net income for 20x1, assuming a 30% income tax rate.

Net income :

Sales 1495000

Cost of goods sold -926,400

Gross profit 568,609

Selling and administrative expense (133000+20000+195000) 348000

Profit 220,600

Tax 30% 66,180

Net income $154,420

(220,600-66,180)

(25%*80,000=20,000)

5. Calculation to Determine the number of completed units manufactured during theyear.

No of unit completed = 1190+(1,495,000/$130 per unit)-1350

No of unit completed =1190+11500-1350

No of unit completed = 11340 Units

7 0
3 years ago
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