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vampirchik [111]
3 years ago
14

Lightning Semiconductors produces​ 400,000 hi-tech computer chips per month. Each chip uses a component that Lightning makes​ in

-house. The variable costs to make the component are​ $1.30 per​ unit, and the fixed costs are​ $1,300,000 per month. The company has been approached by a foreign producer who can supply the​ component, within acceptable quality​ standards, for​ $1.20 each. The fixed costs are​ unavoidable, and Lightning would have no other use for the facilities currently employed in making the component. What would be the effect on operating income if the company decides to​ outsource?
Business
1 answer:
Papessa [141]3 years ago
8 0

Answer:

an increase in operating income of $ 40,000.

Explanation:

Consider the Savings and Costs that arise with the outsource decision.

Note : Fixed Costs are incurred whether or not outsource decision is made ( unavoidable) and are therefore irrelevant for this decision.

Savings :

Variable Costs ( 400,000 × $1.30)       520,000

Costs :

Purchase Price ( 400,000 × $1.20)     (480,000)

Effect : Net Income / (loss)                     40,000

If the Company decides to​ outsource there will be an increase in operating income of $ 40,000.

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Which company is most easily able to outsource its operations and have its good or service produced in another country
svet-max [94.6K]

Answer:

d. Queen’s Quilts

Explanation:

Options are "Hannah’s Hair Salons, Busker Baseball Team , Darling Dentistry , Penelope’s Fresh Pretzels , Queen’s Quilts"

a. Salons, Dentistry : these are services which cannot be outsourced partly or fully.

b. Baseball team: It is a sports team which cannot operate partly in another country.

c. Pretzels: These are freshly baked pastries or food items which needs to be made fresh , so cannot be outsourced.

d. Quilts: These are textile which can be produced in countries having cheap labor .

4 0
3 years ago
When the Mexican government changes the fixed exchange rate of the peso relative to the U.S. dollar from 1.5 (pesos/U.S. dollar)
Sunny_sXe [5.5K]

Answer:

The answer is: E) devaluated; appreciated

Explanation:

A currency devaluation happens when  a country´s currency is deliberately adjusted downward to make it lose value relative to another currency. If this downward adjustment happens in the foreign exchange market and is not deliberately done by a government, is called currency depreciation.  

A currency revaluation happens when a government deliberately adjusts the value of its currency upwards to make it gain value relative to another currency. When this upward adjustment happens in a foreign exchange market and is not deliberately done by a government, is called currency appreciation.

5 0
4 years ago
Kings or queens who held all the power within thier states' boundaries
stealth61 [152]

Kings held all the power within their states' boundaries

5 0
3 years ago
Swifty Company had net credit sales during the year of $1450000 and cost of goods sold of $700000. The balance in accounts recei
Anarel [89]

Answer:

Account Receivable Ratio = 10

Explanation:

Account Receivable Turnover Ratio:

The Account Receivable Turnover Ratio is an accounting measure that indicates the effectiveness of company's ability to collect its receivables from its customers.

A high turnover ratio represents good credit policy and aggressive collections  department with good portfolio of customers.

A low turnover ratio indicates excess amount of old receivables being tied up in working capital.

Formula: Net Credit Sales ÷ (Opening receivable + closing receivable/2)

Receivable Turnover Ratio = $ 1,450,000 ÷ ( $200,000+$90,000/2)

=$1,450,000 ÷ $145,000

= 10

3 0
3 years ago
A precedent refers to
Nuetrik [128]
A rule or a law

Hope it helps!
4 0
4 years ago
Read 2 more answers
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