Answer: Capital investment in new machinery
Capital investment in new machinery enables a company to produce more over a given period of time as compared to the old machine.
It also helps the company to take advantage of new orders in the markets and helps it increase its share in catering to the demand for its products
To solve this problem, we
use the formula in calculating for the total variable cost (COGS):
Revenue - COGS - SG&A
= Pretax profits
where SG & A is calculated
as:
SG & A = (Contribution - Prextax income)
<span>SG & A = ($320,000 - $117,000)
SG & A= $275,000 </span>
Calculating for revenue
using the margin ratio:
Contribution margin/Revenue = Contribution Margin Ratio
Revenue = Contribution Margin/Contribution Margin Ratio
Revenue = $320,000/.20
Revenue = $1.6m
Going back to the 1st formula:
Revenue - COGS - SG&A = Pretax profits
1.6m - COGS - 275k = 117k
COGS = $1.6m - $117k - $275k
<span>COGS = $1.208 million</span>
Hello!
The price rises when the quality rises, because the quality of the product depends on the quality of the feedstock.
Hugs!
Answer:
Making bread
Explanation:
Lyta has to specialize in making bread. By specialization, it means that lyta should focus it's productive efforts on making bread, because from the question she clearly has an absolute advantage in making bread Since the question says she is more efficient in making bread compared to the other product. It means she can produce bread in larger quantities at same cost or she can produce same quantity of bread at lower cost.
