What is the net cost today of the cheapest option?

Gelb Company currently manufactures 52,500 units per year of a key component for its manufacturing process. Variable costs are $

Hoochie [10]

Answer:

Gelb Company should choose to Buy the Component since it is the cheaper option. This gives a cost advantage of $28,875.

Explanation:

For each Option, include costs which are unavoidable because those would change as a result of this decision, they are relevant costs items.

Total incremental cost : Making

Variable costs (52,500 x $4.05) $212,625

Fixed Costs (unavoidable) $75,500

Total $288,125

Total incremental cost : Buying

Purchase Price ( 52,500 x $3.50) $183,750

Fixed Costs (unavoidable) $75,500

Total $259,250

Conclusion :

Gelb Company should choose to Buy the Component since it is the cheaper option. This gives a cost advantage of $28,875 ($288,125 - $259,250).

7 0

3 years ago

Imagine yourself as a business owner just before an economic event such as a recession or depression. What impact would

never [62]

I’d be like —> aww hecc my business gonna lose so much customers now I gotta figure out ways to cut costs and I may have to fire some people. Now I have to decrease my prices... stupid economy. I want my good paying customers back ;(

5 0

3 years ago

The following statements accurately describe the difference between saving and investing EXCEPT…

vagabundo [1.1K]

Answer:

Saving can only be done in person. Investing can be done both in-person and online.

Explanation:

Saving refers to keeping some funds aside for use during emergencies. Individuals and institutions also save as a way of accumulating funds for a specific intention. Banks and other deposit-taking institutions offer saving services to pool funds and lend them for investment and consumption.

Saving will attract lower interest rates, sometimes below the inflation rate. Banks offer lower rates on saving and charges a higher interest rate to borrowers to make profits. Because saving offer lower returns, they are suitable for short-term periods. Savings are relatively safer than investment.

Investments offer higher returns but have a higher risk. Due to their price volatility, investments are suited for the long-term to safeguard against price fluctuations.

8 0

3 years ago

Why is the separating of recordkeeping from the custody of assets a limitation of an internal control system?

yanalaym [24]

The separating of recordkeeping from the custody of assets a limitation of an internal control system because:

In example above, fraud could occur only if the two employees collude (agree to work together to commit fraud)
Employee maintaining accounting records has no incentive to falsify records.
Employee controlling asset will know if another person is maintaining records or not.
The employee who controls/has access to an asset should not maintain that asset's accounting records.

<h3>What is meant by Internal Control?</h3>

Internal controls are the mechanisms, rules, and procedures implemented by a corporation to ensure the integrity of financial and accounting information, promote accountability, and stop fraud.
Internal controls can help improve operational efficiency by improving the accuracy and timeliness of financial reporting, besides complying with laws and regulations and preventing employees from stealing assets or committing fraud.

To learn more about asset's accounting records: brainly.com/question/24012821

#SPJ4

6 0

2 years ago

Cost-benefit analysis attempts to A. compare the real worth, rather than the market values, of various goods and services. B. co

statuscvo [17]

Answer:

<u>Letter D is correct. C</u>ompare the benefits and costs associated with any economic project or activity.

Explanation:

A cost-benefit analysis is a business approach used to ascertain the main strengths and weaknesses of an organization as a whole. This includes the process of all organizational activities, transactions, and other substantial requirements for the company. The purpose of this approach is to compare the benefits and costs associated with the organization's activities and find ways to reduce costs, time and maximize earnings.

8 0

3 years ago