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mario62 [17]
3 years ago
12

1. The Lounge Company manufactures slippers and sells them at $10 a pair. Variable manufacturing cost is $4.75 a​ pair, and allo

cated fixed manufacturing cost is $0.75 a pair. It has enough idle capacity available to accept a​ one-time-only special order of 30,000 pairs of slippers at $5.50 a pair. Lounge will not incur any marketing costs as a result of the special order. What would the effect on operating income be if the special order could be accepted without affecting normal​ sales: (a)​ $0, (b) $22,500 ​increase, (c) $142,500 ​increase, or​ (d) $165,000 ​increase? Show your calculations. 2. The St. Paul Company manufactures Part No. 498 for use in its production line. The manufacturing cost per unit for 25,000 units of Part No. 498 is as​ follows:
Business
1 answer:
KengaRu [80]3 years ago
3 0

Answer:

1. The Lounge Company

The effect on operating income be if the special order could be accepted without affecting normal​ sales:

(b) $22,500 ​increase

2. Manchester

Explanation:

1. The Lounge Company:

Selling price = $10 per pair

Variable manufacturing cost = $4.75 per pair

Allocated fixed manufacturing cost = $0.75 per pair

Total manufacturing costs = $5.50

Special order of 30,000 pairs

Price of special order = $5.50 per pair

Sales value of special special order = $165,000 (30,000 x $5.50)

Manufacturing cost for special order:

Based on full cost = $165,000 (30,000 x $5.50)

Based on variable cost = $142,500 (30,000 x $4.75)

Contribution = $22,500 ($165,000 - $142,500)

The special order will not bring about any increase in operating income if the full cost is used to determine the net income.  If, however, the variable cost is used, considering that The Lounge Company has idle capacity, then there is a contribution of $22,500 to the operating income.

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Answer:

return on equity = 10 %

Explanation:

given data

current market price = $80 per share

own  invest = $10,000

borrow  additional =  $10,000

interest rate = 8% per year

invest  in stock = $20,000

to find out

rate of return

solution

we know here total investment is 80 × 250 shares = $20,000

and

stock price rise 9 % that is

stock price = 80 × ( 1 + 9%)

stock price = $87.2

and after 1 year investment value will be = 250 × 87.2

after 1 year investment value = $21800

so

payment to broker will be

payment to broker = borrow fund + interest

payment to broker = $10000 × ( 1+ 8% )

payment to broker = $10800

so remaining after payment to broker is = $21800 - $10800  =  $11000

so

return on equity is here

return on equity = \frac{11000-10000}{10000}

return on equity = 10 %

5 0
3 years ago
Concord Company pays cash dividends of $670. The entry for this transaction will include a debit of $670 to
kow [346]

Answer:

c. Dividends

Explanation:

Whenever, dividends are recorded as a liability then that amount is charged against retained earnings, but the final entry for payment of dividend =

Dividend A/c Dr.         $670

To Cash A/c.                           $670

Also at the time of recording as an expense, entry will be

Retained Earnings A/c Dr.       $670

                  To Dividend A/c                $670

Since retained earning balance will be reduced and finally cash balance will also be reduced.

Therefore, entry for payment will include debit to

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4 0
3 years ago
Ou are chatting with one customer when another begins asking you questions. the second customer is in a hurry and wants immediat
Tpy6a [65]
You should prioritize your first customer since they are entitled with your full attention being the one who availed your service first. You can ask the second customer if she can wait. But if the second customer would be so persistent, you can ask permission from the first customer if she is not in a hurry and that you would entertain the second customer first.
3 0
3 years ago
When the market is more optimistic about a firm, its share price will ______; as a result, it will need to issue _______ shares
galben [10]

Answer:

The answer is rise, fewer

Explanation:

When the market is more optimistic about a firm, its share price will RISE OR INCREASE as a result, it will need to issue FEWER shares to raise funds that are needed.

Share price can increase as a result of positive economic environment. For example, the company is making consistent profit, prevailing economic or environmental conditions are favouring the company.

When this happens, company will issue lower shares to raise fund because many investors will be looking to buy their shares.

6 0
3 years ago
Sweet Sue Foods has bonds outstanding with a coupon rate of 5.44 percent paid semiannually and sell for $1,930.36. The bonds hav
tigry1 [53]

Answer:

Current yield=5.6%

Explanation:

<em>The current yield is the proportion of the current price of a bond earned as annual  interest payment.</em>

<em>Current yield = annual interest payment/bond price</em>

<em>Annual interest payment = coupon rate × face value</em>

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                                          = $108.8

Current yield

= annual interest payment/price

= $(108.8/1,930.36) × 100

= 5.6%

Note we used the annual interest payment nothwithstanding that interests are paid semi-annually

6 0
3 years ago
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