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slamgirl [31]
2 years ago
5

Minnesota Company has no beginning and ending inventories, and has the following data about its only product: Fixed manufacturin

g costs $92,000 Fixed selling and administrative costs $69,000 Variable manufacturing costs $1,030,000 Variable selling and administrative costs $120,000 Selling price(per unit) $125 Units produced and sold 23,000 Assume there is excess capacity. The company has received a special order for 1,000 units at $60.00 per unit. If the special order is accepted, what will be the effect on net income
Business
1 answer:
Schach [20]2 years ago
7 0

Answer:

Effect on income= $10,000 increase

Explanation:

Giving the following information:

Variable manufacturing costs $1,030,000

Variable selling and administrative costs $120,000

The company has received a special order for 1,000 units at $60.00 per unit.

Because it is a special offer and there is unused capacity, we will not take into account the fixed costs.

First, we need to calculate the unitary variable cost:

Unitary variable manufacturing cost=  1,030,000/23,000= $44.78

Unitary variable selling and administrative cost= 120,000/23,000= $5.22

Total unitary variable cost= 44.78 + 5.22= $50

Now, we can determine the effect on income:

Effect on income= 1,000*(60 - 50)= $10,000 increase

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3 years ago
The firm negotiates a new agreement with its workers for lower wages. The ATC curve should be __________ and the AFC curve shoul
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Lower; unchanged

  • Average total cost (ATC) in economics is calculated as total fixed and variable costs divided by the number of units produced. The normal shape of the average total cost curve is a U, meaning it drops, bottoms out, and then rises. The total cost of an organization is the sum of its fixed and variable costs.
  • The vertical summation of AFC and AVC must be obtained in order to graph average total costs (ATC). Plot the points as shown on the left after adding the two at each output level. Because it is the result of adding the AFC and AVC curves, the ATC curve is higher than the other two. You can see that it is U-shaped, just like the AVC curve, on the left.

Thus this is the answer.

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4 0
2 years ago
Fenton Manufacturing Company at June 30: Cash in bank account $ 6,455 Inventory of postage stamps $ 74 Money market fund balance
Dmitrij [34]

Answer:

$19,462

Explanation:

The computation of the cash and cash equivalent is shown below:

= Cash in bank account + Money market fund balance + petty cash balance + money orders

= $6,455 + $12,400 + $350 + $257

= $19,462

It includes only cash in bank account, balance in money market, petty cash balance and the money orders

All other information which is given is not relevant. Hence, ignored it

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3 years ago
Fiat borrowed $80,000 on October 1, 2019. Fiat will not make any payments until October 1, 2021, and at that time, Fiat will pay
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Answer:

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interest expense for a year = 4000/2 = $2000

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