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zhuklara [117]
3 years ago
6

Bailey Corporation manufactures and sells a number of products, including Product G. Results for last year for the manufacture a

nd sale of Product G are as follows: Sales $750,000 Less expenses: Variable production costs $450,000 Sales commissions 110,000 Salary of product manager 95,000 Fixed product advertising 80,000 Fixed manufacturing overhead 70,000 805,000 Net operating loss ($55,000) Assume that dropping Product G would result in a $40,000 increase in the contribution margin of other product lines. If Bailey chooses to drop Product G, then the change in net operating income next year due to this action will be a: Bailey is trying to decide whether or not to discontinue the manufacture and sale of Product G. All expenses other than fixed manufacturing overhead are avoidable if the product is dropped. None of the fixed manufacturing overhead is avoidable. by Dropping G and increasing the contribution margin of other products will cause an increase of $25,000
Business
1 answer:
snow_lady [41]3 years ago
8 0

Answer:

Effect on income= $25,000 increase

Explanation:

Giving the following information:

Sales $750,000

Variable production costs $450,000

Sales commissions 110,000

Salary of product manager 95,000

Fixed product advertising 80,000

Fixed manufacturing overhead 70,000

Net operating loss ($55,000)

Assume that dropping Product G would result in a $40,000 increase in the contribution margin of other product lines.

We need to calculate the effect of dropping Product G.

Effect on income= - Net operating loss + increase in contribution margin - fixed overhead costs

Effect on income= 55,000 + 40,000 - 70,000= 25,000 increase

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3 0
1 year ago
You are thinking of purchasing a home. The house costs $300,000. You have $43,000 in cash that you can use as a down payment on
Anna35 [415]

Answer:

Annual payment= $3,250.77

Explanation:

Giving the following information:

You are thinking of purchasing a home. The house costs $300,000. You have $43,000 in cash that you can use as a down payment on the house, but you need to borrow the rest of the purchase price. The bank is offering a 30-year mortgage that requires annual payments and has an interest rate of 6% per year.

FV= 300,000 - 43,000= $257,000

i=6%

n= 30

Annual payment= ?

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

Isolating A:

A= (FV*i)/{[(1+i)^n]-1}

A= (257,000*0.06)/{[1.06^30]-1}= $3,250.77

3 0
3 years ago
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Marta_Voda [28]

Answer:

They would cause relatively smaller reductions in death from heart disease.

Explanation:

Since in the question it is mentioned that the government incurred $45 million for research on the heart disease and gain that decreased the death occured from the heart disease. Now if the law of diminishing retuns hold, so the extra rise in expenditure on heart disease result in relatively small decline as it decreases the returns

Therefore the same is to be considered

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Answer:

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Explanation:

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A direct source

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