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liubo4ka [24]
3 years ago
11

Gelb Company currently manufactures 40,000 units per year of a key component for its manufacturing process. Variable costs are $

1.95 per unit, fixed costs related to making this component are $65,000 per year, and allocated fixed costs are $58, 500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.50 per unit.
a. Calculate the total incremental cost of making 40,000 units. (Round "variable cost per unit" answer to 2 decimal places.)

b. Calculate the total incremental cost of buying 40,000 units. (Round "Purchase price per unit" answer to 2 decimal places.)
Business
1 answer:
pogonyaev3 years ago
8 0

Answer:

a. $143,000

b. $140,000

Explanation:

The computation is shown below:

a. For making 40,000 units

Particulars Relevant Amount per Unit Relevant Fixed Costs Total Relevant Costs

Variable cost per unit $1.95                                              $78,000

Fixed manufacturing costs                   $65,000             $65,000

Total incremental cost to make                                                     $143,000

The $78,000 is come from

= $1.95 × 40,000 units

= $78,000

b. And, for buying 40,000 units

Particulars  Relevant Amount per Unit Relevant Fixed Costs Total Relevant Costs

Purchase price per unit   $3.50                                             $140,000

The $140,000 is come from

= $3.50 × 40,000 units

= $140,000

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ddd [48]

Answer:

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Explanation:

The effective tax rate is the hypothetical tax rate adjusted for the tax cost or benefit from permanent difference.

the dividend received deduction reduces the Effective tax rate

= 50,000*21%

= 10,500/1,000,000

= 1.05%.

Effecttive tax rate is 21% - 1.05% = 19.95%

Therefore, TarHeel's accounting effective tax rate is 19.95%

5 0
3 years ago
Actual fixed overhead is $33,300 (12,000 machine hours) and fixed overhead was estimated at $34,000 when the predetermined rate
Anuta_ua [19.1K]

Answer:

C. $34,500

Explanation:

Given the above information, applied fixed overhead is computed as;

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Standard hours allowed for actual production = 11,500

Predetermined rate = $3 per hour

Then,

Applied fixed overhead

= 11,500 hours × $3 per hour

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3 0
3 years ago
Alto and Solo are all-equity firms. Alto has 2,400 shares outstanding at a market price of $24 a share. Solo has 4,000 shares ou
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Answer:

$100

Explanation:

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Alto's total value = Share value + Incremental value of acquisition = $57,600 + $5,500 = $63,100

Net present value (NPV) = Alto's total value - Cost of acquisition =  $63,100 - $63,000 = $100

Therefore, the net present value of acquiring Alto to Solo is $100.

7 0
3 years ago
Which of the following is an INCORRECT statement regarding the right to stop delivery of goods in​ transit? A. If the lessee rep
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Answer:

B. The lessor does not have the right to stop delivery in transit due to the​ lessee's breach of the lease​ agreement; instead, the lessor must deliver the goods to the lessee in spite of the​ breach, and then sue the lessee for damages.

Explanation:

During the transit of goods, if the lessor learns of a breach of the lease agreement, he has every right to stop the delivery of the goods in transit by notifying  the goods carrier or bailee. Since the carrier of the goods reports directly to the lessor, once he receives instructions from the lessor to stop delivery of goods, and he still has sufficient time, the delivery should be stopped.

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7 0
2 years ago
Suppose that TapDance, Inc.’s, capital structure features 65 percent equity, 35 percent debt, and that its before-tax cost of de
stealth61 [152]

Answer:

WACC 8.53600%

Explanation:

WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})

The Weighted average cost of capita lconsiders the weight of the equity times the cost of it.

And the wight of the dbet times the cost of financing after the tax shield.

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t 0.34

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WACC 8.53600%

7 0
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