1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
elena55 [62]
4 years ago
5

A company needs 10,000 units of a component used in producing one of its products. The latest internal accounting reports show t

hat the per unit manufacturing cost to be $150.00, variable manufacturing costs of $110.00 and fixed manufacturing cost of $40. The company recently received an offer from another manufacturer to produce the component for $144.00. If it buys the component on the outside 40% of the fixed manufacturing cost can be avoided. Required: a. If the company buys the component from the outside supplier at $144.00, what is the impact on income? b. What price would make the company indifferent between making the component internally and having the outside supplier make it?
Business
1 answer:
jok3333 [9.3K]4 years ago
7 0

Answer:

A) The outsourcing costs $18 more per unit. It increases the cost by $18000

B) Price= $126

Explanation:

Giving the following information:

Q= 10000 units

In-house:

Variable manufacturing cost= $110 unit

Fixed cost= $40 unit

Total cost= $150 unit

Outsource:

Price=$144 unit

Fixed cost= $40*0,60= $24

Total cost= $168

A) The outsourcing costs $18 more per unit. It increases the cost by $18000

B) The price that makes the decision indifferent is the one that equals unitary costs. We can't reduce fixed costs.

Price=144-18= $126

You might be interested in
Two examples of generally accepted accounting principles are:
tresset_1 [31]
The answer to this question is: <span> accounting for leases and accounting for fair value assets
Leases and fair value assets is often used by companies in order to make their company valuation seem higher than it supposed to be. So, standardized rules regarding the proper way to make the valuation should be written under the Generally accepted accounting principles.</span>
8 0
3 years ago
Google: How to be successful?
scZoUnD [109]
Learn from your mistakes
5 0
3 years ago
Revenues are recognized when ______, even when the cash is collected in a different accounting period than the obligation to the
Elanso [62]

The condition for which revenues are recognized even when the cash is collected in a different accounting period is;

  • Services are provided even if cash has not yet been collected, in cases of accrual basis accounting

<h3>Revenue recognition</h3>

Two major forms of revenue recognition exist;

  • When Cash is collected from customers. This is the case when the organisation uses cash basis accounting
  • When services are provided even if cash has not yet been collected. This is the case when the organisation used accrual basis accounting

Read more on revenue recognition;

brainly.com/question/26274038

6 0
3 years ago
A. A stock's returns have the following distribution:
babunello [35]

Answer:

Following are the response to the given question:

Explanation:

For question 1:

The weighted average of each return is the expected return.

Expected\ return = 0.1 \times -0.22 + 0.2 \times -0.12 + 0.3 \times  0.17 + 0.2 \times  0.33 + 0.2 \times  0.56 \\\\

                           = 0.1830 \\\\= 18.30\%

For question 2:

Standard deviation is a measured source of the square deviations from the mean via probability.

Std \ dev = [0.1 \times (0.183-(-0.22))^2 + 0.2 \times (0.183-(-0.12))^2 + 0.3\times(0.183-0.17)^2 + 0.2\times (0.183-0.33)^2 + 0.2\times (0.183-0.56)^2]^{(\frac{1}{2})}\\\\

             = 0.2596 \\\\= 25.96\%

For question 3:

For point a:

\text{Coefficient of variation} = \frac{std \ dev}{expected\ return} \\\\

                                    =\frac{0.2596}{0.183} \\\\= 1.42

For point b:

As per the CAPM:  \text{Required return = risk free rate + beta}\times \text{market risk premium}

\to 16\% = 4.5\% + beta\times 5\%\\\\\to beta = 2.3

 In Option I:

When the beta of the stock exceeds 1.0, the change in the required rate of return must be higher than the increase in the premium of market risk. Beta is the degree to which stock return changes as market returns change.

 \text{Required return = risk free rate + beta}\times \text{market risk premium}

Required \ return = 4.5\% + 2.3\times 7\%\\\\Required \ return = 20.6\%\\\\

5 0
3 years ago
A 50-year old customer is in a very low tax bracket. She lives in a state that has one of the highest income tax rates. The cust
zvonat [6]

Answer:

b. investment grade corporate bond

Explanation:

Credit rating is used to show the reliability of a security. The Investment Grade is a credit rating the is low risk bond. There is low possiblity of default on this type of investment.

Medium rating of A and BBB represent the investment grade corporate bond.

This is an attractive investment for the more conservative investor.

This is an ideal investment choice for the 50-year old customer with very low tax bracket, in a state with high income tax rates. So she is seeking income and preservation of capital.

3 0
3 years ago
Other questions:
  • In which situation would you opt for a car lease?
    15·2 answers
  • There are approximately 1 billion people living in India. It is estimated that only about 200 million of these people earn more
    11·1 answer
  • Jolene hired Lacy to find a buyer for her house. Adam was interested in buying the house. If both Jolene and Adam agree, Lacy, a
    10·1 answer
  • An electronic firm invested $60,000 in a precision inspection device. It cost $4000 to operate and maintain in the first year an
    13·1 answer
  • Which best describes the effect of outsourcing on the labor market in the United States
    7·1 answer
  • 14. Suppose that the production of $1 million worth of steel in Canada requires $100,000 worth of taconite. Canada’s nominal tar
    15·1 answer
  • A regional automobile dealership sent out fliers to prospective customers indicating that they had already won one of three diff
    7·1 answer
  • Rothbart Manufacturing agrees to manufacture bumper cars for 12 Banners Amusement Parks. Under the terms of the contract, 12 Ban
    13·1 answer
  • In title theory states what clause is unique to the mortgage?
    5·1 answer
  • Many executives own shares in the companies they manage and are also in high tax brackets. When faced with the choice between de
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!