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murzikaleks [220]
3 years ago
5

Laskowski Company manufactures a part for its production cycle. The annual costs per unit for 5,000 units of the part are as fol

lows:
Per Unit

Direct materials $3.00
Direct labor 5.00
Variable factory overhead 4.00
Fixed factory overhead 2.00
Total costs $14.00

The fixed factory overhead costs are unavoidable. Hendricks Company has offered to sell 5,000 units of the same part to Laskowski Company for $14 per unit. The facilities currently used for the part could be used to make 5,000 units annually of a new product that would contribute $5 a unit to fixed expenses. No additional fixed costs would be incurred with the new product. Laskowski Company should ________.

A) make the part to save $5,000
B) make the part to save $15,000
C) make the new product and buy the part to save $5,000
D) make the new product and buy the part to save $15,000​​​​​​​ (this is the correct answer, please explain why)
Business
1 answer:
kaheart [24]3 years ago
4 0

Answer:

D) make the new product and buy the part to save $15,000​​​​​​​

Explanation:

Total Cost to Make a Product = Cost per unit * units = 14*5,000 =70,000

Relevant cost to Buy the Product

= Cost to purchase per Unit + Fixed Overhead Per Unit - Contribution Per Unit From New Product

= $14+2 -5 = 11.00 Per Unit

Cost to Buy = 11,,00*5000 =55,000

Net Advantage to Buy = 70,000-55000 = $15,000

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4. Suppose the supply of apples sharply increases because of perfect weather conditions throughout the growing season. Assuming
koban [17]

Answer:

Apples supply increase imply new equilibrium at lower price, higher quantity. Demand downwards expansion on the curve itself is due to lower price.

Explanation:

Market is at equilibrium where Market Demand = Market Supply, & downward sloping  demand curve intersects upward sloping demand curve.

If supply of apples increase & supply curve shifts rightwards, there is Excess Supply at previous equilibrium. Excess Supply creates competition among sellers, reduces new market price.

At lower price, demand expands & supply contratcs. New Equilibrium quantity is higher where new (rightwards shifted) supply curve intersects demand curve.

Quantity demanded increases (expands - downwards movement on demand curve) due to lower price, despite of no change in demand.

7 0
2 years ago
At Bargain Electronics, it costs $30 per unit ($20 variable and $10 fixed) to make an MP3 player that normally sells for $45. A
Burka [1]

Answer:

The special order should be : Accepted

Explanation:

<u>Analysis of whether or not to accept special order</u>

Revenues (3,000 x $25)                             $75,000

Less Variable expenses :

Costs - Manufacturing (3,000 x $20)       ($60,000)

Shipping (3,000 x $3)                                  ($9,000)

Net Income                                                    $6,000

Conclusion :

Since Net Income has increased by $6,000 as a result of special order, it should be accepted

6 0
2 years ago
if the market risk premium is 7%, the risk-free rate is 2% and the beta of a stock is 2.0, what is the expected return of the st
Len [333]

Expected return of the stock is greater than 12%.

Using formula, Risk free rate + beta (market risk rate - risk free rate)\

= 2% + 2.0 (7%-2%)

= 13.6 - 0.4* risk premium

Risk premium of a stock is greater than 12%.

A stock's total return takes into account both capital gains and losses as well as dividend income, as opposed to a stock's nominal return, which only displays its price movement. In addition to considering the actual rate of return, investors should consider their ability to withstand the risk involved with a given investment. An investment's return on investment (ROI) provides a general indication of its profitability. The return on investment (ROI) is calculated by subtracting the investment's initial cost from its final value, dividing the result by the cost of the investment, and finally multiplying the result by 100.

Note that the full question is:

If the market risk premium is 7%, the risk-free rate is 2% and the beta of a stock is 2.0, what is the expected return of the stock?

A. less than 12%.

B. 12%.

C. greater than 12%.

D. cannot be determined.

To learn more about returns: brainly.com/question/24301559

#SPJ4

3 0
1 year ago
The interest rate that should be used when evaluating a capital investment project is sometimes called the ______________. i. in
OlgaM077 [116]

The interest rate that should be used when evaluating a capital investment project is sometimes called the appropriate discount rate and cost of capital.

The cost of capital refers to the minimum rate of return needed from an investment to make it worthwhile, whereas the discount rate is the rate used to discount the future cash flows from an investment to the present value to determine if an investment will be profitable. Appropriate Discount Rate means, at any time, the real (i.e., not inflation adjusted) weighted average cost of capital (after taxes payable by the concession business).

Cost of Capital = (Risk-Free Rate of Return + Credit Spread) × (1 – Tax Rate)

To know more about cost of capital here

brainly.com/question/16031467

#SPJ4

3 0
1 year ago
Consider the borrowing rates for Parties A and B. A wants to finance a $100,000,000 project at a FIXED rate. B wants to finance
QveST [7]

Answer:

party A will pay floating rate while party B will pay fixed rate

Explanation:

For A

Sources at floating rate = prime 1%

received fixed rate = 8.9%

For B

sources fixed rate = 8.9%

Received floating rate = prime 1%

For a mutually beneficial interest only swap that makes money for A,Band the swap bank in equal measure, the party A will pay floating rate while party B will pay fixed rate

4 0
3 years ago
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