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
zhannawk [14.2K]
3 years ago
6

Data for Hermann Corporation are shown below:

Business
1 answer:
nata0808 [166]3 years ago
4 0

Requirement (a)

The cost benefit analysis will be suitable here for short term decision making.

                                                                Cost         Benefit         Net

Increase in Fixed Cost (W-1)              ($5000)                         ($5000)

Increase in Total Contribution (W-2) <u>               </u>     <u>$2700 </u>      <u> $2700 </u>

Net Decrease in Operating Income   ($5000)     $2700       ($2300)

Working 1 The net increase in the fixed cost is $5000 which is given in the requirement (a).

Working 2 Net increase in Total contribution by increasing the monthly advertising expense by $5000 is:

30% * $9000 = $2700

Requirement (b)

As the net difference is a decrease in operating income by $2300 so it is not a suitable option for the company.

Requirement 2

Again here we will appraise the suitability of the option by using cost benefit analysis.

                                                                 Cost         Benefit         Net

Increase in T.Variable Cost (W-3)        ($4400)                       ($4400)

Increase in Total Contribution (W-4)   <u>              </u>     <u>$1000 </u>      <u> $1000 </u>

Net Decrease in Operating Income   ($4400)     $1000      <u>($3400)</u>

Decision: As the net difference is $3400 negative so it is better that we don't opt to increase the component cost by $2.

Working 3 The net increase in the Total Variable cost is:

Increase in Total Variable cost = $2 net increase in variable cost per unit * total units after opting to higher quality components

Increase in Total Variable cost = $2 * (2000*110%) = $4400

Working 4 Net decrease in contribution per unit is $2 as a result of increasing the Variable cost per unit by $2.

Due to the increase in the total number of units sold the total contribution will increase if the difference of contribution on increased units and contribution on older number of units is positive.

Total Contribution after taking the decision to increase variable cost by $2 is:

Total contribution = 2000 * 110% * $(27-2)  = $55000

Total Contribution before taking the decision to increase variable cost by $2 is:

Total contribution = 2000 * $27 = $54000

So the Net difference is $1000 positive (55000-54000).

You might be interested in
John kenneth galbraith said that in the past all societies had an economy of ______________; now the united states had what galb
djyliett [7]
John Kenneth Galbraith is an economist, most widely read economists and is considered to be the most well known economist. In the past, he had said that all societies had an economy of scarcity. In the present, the united states had acquired what Galbraith said, calling an economy of abundance.
6 0
3 years ago
Uestion 5
konstantin123 [22]

Answer:

BROOKLYN LTD

The selling price should be set at Shs. 15,000.  At this price, there are more sales in unit and value than at the selling price of Shs. 24,000.

Explanation:

a) Data and Calculations:

                                            Shs. 15,000   Probability  Expected Sales

Forecasted Sales Volume     20,000              10%         2,000

Forecasted Sales Volume     30,000              60%       18,000

Forecasted Sales Volume     40,000              30%       12,000

Total Expected sales                                                     32,000

Total Sales Value = Shs. 480,000,000 (Shs. 15,000 x 32,000)

                                       Shs. 24,000     Probability  Expected Sales

Forecasted Sales Volume       8,000              10%             800

Forecasted Sales Volume     16,000              30%          4,800

Forecasted Sales Volume    20,000              30%          6,000

Forecasted Sales Volume    24,000              30%          7,200

Total Expected sales                                                      18,800

Total Sales Value = Shs. 451,200,000 (Shs. 24,000 x 18,800)

3 0
3 years ago
The following information is available for completed Job No. 402:
Margarita [4]

Answer:

b. $140000.

Explanation:

We know that

cost of finished goods in stock= (total production cost ÷ number of units produced)×number of units unsold

= [(170000+230000+160000)/8000]*(8000-6000)

= $140000

Option b) is the correct answer

7 0
3 years ago
Accounting involves the _____ of the financial activities for firms. _____ contribute to and benefit from information that use i
Minchanka [31]

Answer:

Summarizing; Knowledge worker

Explanation:

Summarizing: It is a financial activity that involve collection of financial data and information to be presented in a specified format as per accounting standard to make it easier to understand and analyse.

Knowledge worker: These are professionals whose job is to innovate, discovering new ideas, analysing information, etc. Thinking is the job requirement for these professionals. Few examples of knowledge worker are Scientists, programmer, architect, accountant, etc. Knowledge worker are different from other worker as they know how to get the task done with easier technique and knowledge.

8 0
3 years ago
I had the flu last month. My fever is better, but I still have a chronic cough. It just will not go away! Drinking tea with hone
nata0808 [166]

Answer:

B

Explanation:

Short-lived or not lasting

4 0
3 years ago
Read 2 more answers
Other questions:
  • Observing children's needs and interests should affect the way you plan activities.
    10·1 answer
  • Assume that you are a high-level manager for a shoe manufacturer. You know that your firm could increase its profit margin by pr
    9·1 answer
  • Walnut has received a special order for 2,700 units of its product at a special price of $200. The product normally sells for $2
    9·1 answer
  • You are the manager of the packaging department in a cookie factory. (Obviously, the packaging employees cannot eat the cookies
    11·1 answer
  • The Accumulated Earnings column of the employee earnings record (A) shows net pay for the year. (B) is the total earnings since
    5·1 answer
  • Sterling Corporation prepares its financial statements in accordance with IFRS. Sterling paid $10,000 of interest during the yea
    5·1 answer
  • Phil, age 20, is single and can be claimed as a dependent on his parent's return. He had $150 in interest income and wages of $7
    10·1 answer
  • dentify a true statement about sales-oriented firms. a. They target their products to specific groups of people. b. They recogni
    13·1 answer
  • Question 1 / 10
    9·1 answer
  • the initial impact of an increase in an investment tax credit is to shift aggregate a. demand left. b. supply left. c. supply ri
    13·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!