Answer:
The answer is: A) a production expense that changes with the quantity of output produced.
Explanation:
Variable costs are costs that vary in proportion to production output. Variable costs increase if the production output increases, and decreases if the production output decreases.
For example, packaging costs depend on the amount of final goods produced. If the amount of goods increases, then more packaging will be needed (increasing the variable costs).
Answer:
B. $2900
Explanation:
Given that revenue = 5000
Expenses = 2100
Recall that
Net income = total revenue - total expenses
Thus,
Net income = 5000 - 2100
= $2900
NOTE: account receivable and dividends are not used in the calculation because they are part of the company's revenue for the year and expenses for the period respectively.
Answer:
c)150,000 units
Explanation:
<em>The cost profit volume analysis shows the relationship between the level of activity, cost and profit. It can be used to solve this problem</em>
The units to be sold to make an income of $100,000 can be determined as follows:
Units to be sold = (Fixed cost + Income)/Sales minus variable cost
Fixed cost = 200,000, Selling price = 10, variable cost - 8, income - 100,000
Units to be sold =( 200,000 + 100,000)/ (10-8)
= 150,000 units
Answer:
9.17%
Explanation:
sustainable growth rate = return on equity x retention rate
- return on equity = 13.1%
- retention rate = 1 - payout rate = 1 - 30% = 0.7
sustainable growth rate = 13.1% x 0.7 = 9.17%
A company's sustainable growth rate is the growth rate that the company can achieve without raising new capital either by issuing debt or stocks. It basically refers to how much the company can finance its current or future projects by investing its retained earnings.
