Answer:
1.- financial advantage for $31,720
2.- the minimum price can be 6.80 dollars
Explanation:
For the special order we should only consider the variable cost as will not alter the fixed cost structure for the firm:
sales price $ 19.00
variable cost
Direct Materials 1.70
Direct Labor 3.00
Variable overhead 0.60
Variable S&A <u> 1.50 </u>
Total variable: 6.80
contribution per unit: $12.2
total contribution for 2,600 units: $31,720
2.- the inferior units can be sold for the variable cost to avoid a negative contribution.
Answer:
B. has no effect on total assets.
Explanation:
Both cash and accounts receivable are assets. When a sale is made on credit, the entries required are debit accounts receivable and credit revenue.
On receipt of cash, debit cash and credit accounts receivable.
Hence the collection of a $1,000 Accounts Receivable will have no effect on total assets as one asset was credited ( a reduction) while the other was debited(an increase) by the same amount.
Well that's not really a question. More of an opinion.
Answer:
Risk return you expect to pay high average return since it will give us better economic conditions.
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