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
Svetllana [295]
3 years ago
6

Russell Preston delivers parts for several local auto parts stores. He charges clients $1.30 per mile driven. Russell has determ

ined that if he drives 3,500 miles in a month, his average operating cost is $0.85 per mile. If he drives 4,500 miles in a month, his average operating cost is $0.75 per mile. Use this information and the high-low method to determine that his monthly cost equation is: total cost = $1,220.00 + $0.29 per mile.
A. Determine how many miles Russell needs to drive to break even?
B. Assume Russell drove 2,500 miles last month. Without making any additional calculations, determine whether he earned a profit or a loss last month.
C. Determine how many miles Russell must drive to earn $2,135.00 in profit.
D. Prepare a contribution margin income statement assuming Russell drove 2,500 miles last month.
E. Use the above information to calculate Russell’s degree of operating leverage.
Business
1 answer:
Lapatulllka [165]3 years ago
8 0

Answer:

A. Determine how many miles Russell needs to drive to break even?

break even formula = total fixed costs / contribution margin

  • total fixed costs = $1,220
  • contribution margin = $1.30 - $0.29 = $1.01

break even formula = $1,220 / $1.01 = 1,207.9 ≈ 1,208 miles

B. Assume Russell drove 2,500 miles last month. Without making any additional calculations, determine whether he earned a profit or a loss last month.

if he drove 2,500 he made a profit because it is more than the break even point.

C. Determine how many miles Russell must drive to earn $2,135.00 in profit.

($1,220 + $2,135) / $1.01 = 3,321.7 ≈ 3,322 miles

D. Prepare a contribution margin income statement assuming Russell drove 2,500 miles last month.

total revenue                         $3,250

<u>- variable costs                       ($725)</u>

contribution margin              $2,525

<u>- fixed costs                         ($1,220)</u>

net income                            $1,305

E. Use the above information to calculate Russell’s degree of operating leverage.

Degree of operating leverage = contribution margin / operating income = $2,525 / $3,250 = 0.7769 or 77.69%

You might be interested in
Which of the following institutions makes up the largest part of the Federal Reserve System organization
vlada-n [284]

The Correct answer choice for question 1 is : <u>Federal Reserve Banks</u>

<h3>What is Federal Reserve Banks?</h3>

While the Board of Governors is a sovereign government agency, the Federal Reserve Banks are set up like private companies. Member banks hold stock in the Federal Reserve Banks and earn profits. The Federal Reserve's interest is determined principally from the interest on U.S. government securities that it has received through open market operations.

                                                   AND

The Correct answer choice for question 2 is : <u>Buy government securities</u>

<h3>What is Recession?</h3>

A recession is a business cycle recession which occurs in a general slowdown in financial activity. Macroeconomic indicators such as GDP, finance spending, capacity utilization, household income, business profits, and inflation fall, while failures and the unemployment rate rise.

Therefore, we can conclude that the correct option of 1 is (B) and 2 is (A).

Your question is incomplete, but most probably your full question was:

1. Which of the following institutions makes up the largest part of the Federal Reserve System organization?

A. Board of Governors

B. Federal Free Market Committee

C. Federal Reserve Banks

D. Member banks and other depository institutions

2. If the United States falls into a recession, which action would the Federal Reserve take to encourage employment?

A. Buy government securities

B. Increase reserve requirements

C. Raise federal funds and prime rates

D. Sell government securities

Learn more about Federal Reserve System on:

brainly.com/question/999538

#SPJ4

7 0
2 years ago
In a criminal tax case, Darth Vader was charged with several counts of tax evasion and filing a false income tax return, stemmin
Vitek1552 [10]

Answer:

<em>Darth's response is not adequate as he has systemically illegitimately manipulated the Jedi's assets to evade taxes. Therefore all those funds in question will be taken into account when measuring Jedi's taxable income. </em>

It can be inferred after that that that the Jedi has some existing gain / retained earnings or not.

<em>When Darth considers himself guilty, he shall be liable for charges of fine, reward and prosecution under sec.7201.</em>

<em></em>

7 0
3 years ago
The Rowe Corporation uses a standard cost system. The company applies manufacturing overhead to units of product based on machin
Viefleur [7K]

Answer:

Allocated overhead= $216,000

Explanation:

Giving the following information:

Estimated overhead= $225,000

Estimated machine-hours= 25,000

At standard, each unit of finished product requires 3 machine-hours. Units of product completed 8,000 units

<u>To allocate overhead, we need to use the standard number of machine-hours that would take to produce 8,000 units.</u>

First, we need to determine the estimated overhead rate:

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

Estimated manufacturing overhead rate= 225,000/25,000= &9 per machine hour

Now, we can allocate overhead:

Allocated overhead= 9*(8,000*3)= $216,000

7 0
3 years ago
When might adding an additional employee be bad for a small business?
Anarel [89]

Answer:

If the demand for the product or services goes down

Explanation:

A reduction in demand for a good or service results in a decline in its price. As per the law of supply and demand, a decline in demand while holding other factors constant pushing the equilibrium price down. Reduced prices mean that the revenues obtained from the sales of the product or service will decline.

Hiring an extra worker when the demand is low will lead to losses. Low demand causes low prices, which implies that the cost of the new employee will be greater than the benefits obtained from the worker.  A reduction in prices will mean that the marginal product of labor will be lower than the cost of labor.

3 0
2 years ago
Cost of Bank Loans Gifts Galore Inc. borrowed $1.6 million from National City Bank. The loan was made at a simple annual interes
babymother [125]

Answer: 23456

Explanation: its math

3 0
3 years ago
Other questions:
  • Authority to conduct open market operations, which consists of buying and selling of , rests with the Committee. Reserves equal
    13·1 answer
  • Prepare Job-Order Cost Sheets, Predetermined Overhead Rate, Ending Balance of WIP, Finished Goods, and COGS At the beginning of
    8·1 answer
  • Todd Mountain Development Corporation is expected to pay a dividend of $3 in the upcoming year. Dividends are expected to grow a
    8·1 answer
  • Internationally diversified firms: a. are more likely to produce below-average returns for investors in the long run. b. may nee
    11·1 answer
  • Kelly received a $60,000 salary during 2017. Her federal income tax withholding rate was 20%, and the Social Security base amoun
    14·1 answer
  • A stock had returns of 18.58%, -5.58%, and 20.81% for the past three years. What is the variance of returns?
    7·1 answer
  • Features, Advantages and disadvantages free market economy?
    14·1 answer
  • Which of the following statements is a valid critique of rational choice theory?A. People will rarely choose the acceptable opti
    5·1 answer
  • Which option correctly describes a benefit of using professional networking websites? OA Reach out to friends and relatives for
    8·1 answer
  • The income effect indicates that a ______ price increases the purchasing power of income, enabling consumers to purchase ______
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!