All categories

3 years ago

Kuzio Corporation produces and sells a single product. Data concerning that product appear below:

Business

1 answer:

lorasvet [3.4K]3 years ago

3 0

Answer:

The overall effect on the company's monthly net operating income of this change is $ 6,900, increase

Explanation:

Company's monthly net operating income before the change:

Sales (5,500× $ 150) 825,000

Less Variable Costs( 5,500 × $ 60) (330,000)

Contribution 495,000

Fixed Expenses (208,000) (208,000)

Net Operating Income 287,000

Company's monthly net operating income after the change:

Sales ((5,500+150)× $ 150) 847,500

Less Variable Costs ((5,500+150) × $ 60) (339,000)

Contribution 508,500

Fixed Expenses (208,000+6,600) (214,600)

Net Operating Income 293,900

Effect on the company's monthly net operating income:

Net Operating Income - After Change 293,900

Net Operating Income - Before Change 287,000

Change in Net Operating Income 6,900

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2 years ago

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Kryger [21]

A. The items that fall under the DIRECT MATERIAL category include the following:
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2. Electricity cost for the X ray department.
3. Maintenance and repair on the X ray machine.
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Overhead cost refers to all other costs that are incurred during the process of production.These costs can not be traced to a specific department per say, but it cover the whole business unit. Overhead cost is of two types: administrative and manufacturing overheads. Examples of overhead costs are rent, utilities, insurance, depreciation, etc.

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2 years ago

Crockin Corporation is considering a machine that will save $9,000 a year in cash operating costs each year for the next six yea

Roman55 [17]

Answer:

IRR = 16.5%

Explanation:

The IRR is the discount rate that equates the present value of cash inflows to that of cash outflows. At the IRR, the Net Present Value (NPV) of a project is equal to zero

If the IRR greater than the required rate of return , we accept the project for implementation

If the IRR is less than that the required rate , we reject the project for implementation

IRR = a% + ( NPVa/(NPVa + NPVb)× (b-a)%

NPV = PV of annual savings - initial cost

PV of annual savings = A× (1- (1+r)^(-n) )/r

A- annual savings in operating cost , r- rate of return, n- number of years

NPVa at 10% discount rate

PV of cash inflow = (9,000× 1-1.1^-6)/0.1 = 39,197.35

NPV = 65,328.91 - 33,165 = 6,032.35

NPVb at 20% discount rate

PV of cash inflow = (9,000× 1-1.2^-6)/0.2= (3,235.41)

NPV = 29,929.59 -33,165 = (3,235.41)

IRR = a% + ( NPVa/(NPVa + NPVb)× (b-a)%

IRR = 10% + ( (6,032.35/(6,032.35 +3,235.41) )× (20-10)%= 16.51%

IRR = 16.5%

8 0

3 years ago

Two firms, A and B, each currently dump 50 tons of chemicals into the local river. The government has decided to reduce the poll

vitfil [10]

Answer:

d. Firm A will spend $4,000.

Explanation:

Since Firm B cost of Cleanup before it gets the the river is less than the cost of pollution permits, it will choose to clean up its pollution.

However, since Firm A cleanup cost per ton ($100) is greater than the cost of the pollution permit, it will choose to buy permits.

Maximum Allowable Number of Permits=40

Therefore, Firm A will clean up 10 Tons and dump 40 Tons of Waste.

Cost =(10 Tons *$100)+(40 Tons * $75)

=$(1000+3000)

=$4000.

Firm A will spend $4000.

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3 years ago

Read 2 more answers

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Vera_Pavlovna [14]

Answer:

The answer would be PRICE SIGNALING

Explanation:

Price signaling may occur when consumers have imperfect information about product quality. To infer quality, consumers may rely on previous experience or may use some of the product’s observable characteristics, such as the product’s price. We examine the scenario whereby the firm can endogenously change consumers’ beliefs about the product’s quality by altering both the price and quality of its product. Our main findings are that, in this type of setting, price signaling causes the firm to raise its price, lower its quality, and dampen the degree to which it responds to cost shocks. If the cost of adjusting quality is sufficiently high, the dampening effect is pronounced in the downward direction, meaning that price signaling causes prices to respond less to cost decreases than cost increases.

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3 years ago