Answer:
Financial advantage of accepting the special order =$112,480
Explanation:
Unit price of the special order = (100- 16)%× $46 = $38.64
Variable cost = 15 + 6 + 3= 24
$
Sale revenue ($38.64
× 7000) = 270,480
Variable cost (24× 7,000) = (168,000
)
Cost of special machine (14,000)
Add Savings in variable selling expenses (25%*96,000) <u>24,000
</u>
Net additional income from accepting the order $112,480
Note the fixed costs are not relevant for this special order decision. Hence, they were not considered.
Financial advantage of accepting the special order =$112,480
Answer:
Computation of net cash provided by operating activities under the indirect method
<em>Cash flow from Operating Activities</em>
Net Income $370,000
<u>Adjastment for Non-Cash Items:</u>
Depreciation $92,500
<u>Adjastment of Other Items already included:</u>
Loss on Disposal of Plant Assets $37,000
Net Cashflow from Operating Activities $499,500
Explanation:
Indirect method makes adjastment to Net Income on the following items:
1.Non-Cash Items already included in the Calculation of Net Income
In this case Depreciation is a non-cash item and is added back to arrive at cash flow amount related to Net Income
2.Other items already included in other sections of cashflow statement
Loss on disposal is added back to Net Income. This relates to Activity in Investments
3. Changes to Working Capital
No further details applied to this section in the question.
It takes place in the Primary Auditory Cortex.
Answer:
Degree of operating leverage
= <u>Sales -Variable cost </u>
Sales - Variable cost - Fixed cost
= <u>Contribution</u>
Pre-tax net income
= $48,000/$12000
= 4
The correct answer is A
Explanation:
Degree of operating leverage is the ratio of contribution to pre-tax net income. Contribution = $48,000 and pre-tax net income = $12,000.
The division pf contribution by pre-tax net income gives the degree of operating leverage.