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Semenov [28]
3 years ago
8

The SP Corporation makes 40,000 motors to be used in the production of its sewing machines. The average cost per motor at this l

evel of activity is:
Direct materials $ 9.90
Direct labor $ 8.90
Variable manufacturing overhead $ 3.65
Fixed manufacturing overhead $ 4.60
An outside supplier recently began producing a comparable motor that could be used in the sewing machine. The price offered to SP Corporation for this motor is $25.15. If SP Corporation decides not to make the motors, there would be no other use for the production facilities and none of the fixed manufacturing overhead cost could be avoided. Direct labor is a variable cost in this company. The annual financial advantage (disadvantage) for the company as a result of making the motors rather than buying them from the outside supplier would be:

Multiple Choice

($76,000)

$254,000

108,000

$184,000
Business
1 answer:
Yuri [45]3 years ago
5 0

Answer:

c) 108,000 dollars

Explanation:

Buy option:

Purchase:        40,000 motors at 25.15 = 1,006,000

unavoidable fixed cost: 40,000 x 4.60 =    184,000

                                                               1,190,000.00

Produce option:

Manufacturing Cost (9.9 + 8.9 + 3.65) x 40,000 = 898,000.00

Fixed cost:                                                                  184,000.00

Total Cost                                                          1,082,000.00

Differential:  1,190,000 - 1,082,000.00 = 108,000.00

It is advantageous to continue the production as the unavoidable cost will make the buy option a worse deal

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Answer: This presentation helps you choose which of the five health insurance options works best for your family.

Explanation:

From the question, we are informed that employees usually choose a health care plan without carefully considering their options and they end up blaming someone else for not informing them sufficiently of their options ahead of time.

Due to this reason, the person want the employees to attend a fair and take the time to carefully weigh their options. Of the options given, the correct answer is that "this presentation helps you choose which of the five health insurance options works best for your family".

Emphasis is been placed on choice as the employees can choose what works best for them. A simple language is also used to pass the message across.

8 0
4 years ago
Suppose that the demand for a particular t-shirt the UNC Student Stores sells is deterministic with 2 units per day. Each t-shir
Veseljchak [2.6K]

Answer:

EOQ = 220.6052281 shirts rounded off to 221 shirts

The order should be placed after every 110 days.

Explanation:

The EOQ or economic order quantity is the optimum order level or quantity which minimizes the inventory related costs. This is the order quantity where the cost of ordering and the cost of holding the inventory is the minimum. The formula for EOQ is,

EOQ = √(2 * AD * O) / H

Where,

  • AD refers to annual demand
  • O is ordering cost per order
  • H is holding cost per unit per year

Annual demand for t shirts (assuming 365 days per year) = 2 * 365 = 730

Holding cost per unit per year = 0.5 * 12 = $6

EOQ = √(2 * 730 * 200) / 6

EOQ = 220.6052281 shirts rounded off to 221 shirts

To calculate how frequently the order should be placed,we will calculate the number of orders per year by dividing the total annual demand by the EOQ.

Number of orders per year = 730 / 220.61

Number of orders per year = 3.309 or 3.31 orders per year

Number of days per order = 365 / 3.309

Number of days per order = 110.305 days or 110 days

8 0
4 years ago
What is the IRR for a project that costs $100,000 and provides annual cash inflows of $30,000 for 6 years starting one year from
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Answer:

19.91 %

Explanation:

The Internal Rate of Return (IRR) is the Interest rate that will make the present values of cashflows equal to the price of the Initial investment.

<u>Calculation of IRR of Project A using a Financial Calculator : </u>

($100,000) CFj

$30,000         Cfj

$30,000         Cfj

$30,000         Cfj

$30,000         Cfj

$30,000         Cfj

$30,000         Cfj

Shift IRR/YR 19.9054 or 19.91 %

6 0
3 years ago
Lenovo, HP, Dell, Acer Group, and Apple dominate 70% of the world market for personal computers). Smaller competitors survive by
Over [174]

Answer:

Oligopoly

Explanation:

Oligopoly is simply defined as the situation in which more than two firms own/control the largest market share, while other smaller firms contend for the remaining share of the market.

For better understanding;

  • Monopoly: one firm owning/controlling the largest market share.
  • Duopoly: two firms own/control the largest market share.
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In this type of competition (Oligopoly), the smaller firms survive by offering unique features in their products and services while some offer cheaper prices for their products and services.

4 0
3 years ago
The preemptive right is important to shareholders because it a. allows managers to buy additional shares below the current marke
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Answer:

C. protects the current shareholders against a dilution of their ownership interests.

Explanation:

Preemptive rights are rights given to shareholders in an organization allowing them to buy additional shares in any future issue in order to maintain their percentage ownership, before the shares are available to the general public. It guards against dilution or decrease in a shareholders stake or ownership interest buy allowing them buy more shares for future issues before it is available for the general public to own shares. In doing so, shareholders avoid involuntary dilution.

6 0
4 years ago
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