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3 years ago

The contribution margin is determined by subtracting _______.

Business

1 answer:

sineoko [7]3 years ago

5 0

Answer:

c. variable product and variable period cost from sales.

Explanation:

Contribution Margin is obtained by subtracting the total variable costs from the sales. This is also known as direct costing. Deducting fixed expenses from the contribution margin yields profit . Contribution margin is used in various ratios such as the contribution margin ratio and break even sales is also determined by using it sometimes. Contribution margin is a tool for managers as sales figures guide cost figures. The variable cost of goods sold varies directly with sales volume and the influence of production on profit is eliminated.by deducting only the variable product costs and not the variable period costs we get gross contribution margin. After deducting the variable period costs we get the contribution margin.

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Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely determined by his division’s return o

baherus [9]

Answer:

NPV: $180,285.49

IRR: 21.336%

simple rate of return: 72.13%

Explanation:

6,100,000 investment

contribution margin 3,000,000

fixed expense: 900,000

EBITA 2,100,000

We will calculate the NPV without the depreciation, as the depreciation is the distribution of the investment cost over the project life.

If we include the depreciation we will be counting the investment amount twice. Entirely at Time 0 and then subtracting on each cash inflow.

We will calculate the NPV at 20% as is the company's discount rate. Even if the current division returns are in 24% as the company accepts project which yields 20%.

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 2,100,000

time 5 years

rate 20% = 20/100 = 0.2

$2100000 \times \frac{1-(1+0.2)^{-5} }{0.2} = PV\\$

PV $6,280,285.49

NPV = PV of cash inflow - investment

6,280,285.49 - 6,100,000 = 180,285.49

the IRR:

The internal rate of return is the rate at which the NPV of a priject is zero.

We calculate this using excel formula IRR

or a financial calculator

it could also be done with trial and error using the PV tables.

I will explain you in Excel

FIrst, you write the inflow and outflow per year:

-6,100,000

2,100,000

then we write on another cell:

=IRR(

then, select the cells

and press enter

21.336%

the simple rate of return:

(total return - investment) / investment

(2,100,000 x 5 - 6,100,000) / 6,100,000 =

4,400,000 / 6,100,000 = 0.721311475 = 72.13%

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Answer:

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Gemiola [76]

Vocational classes provide job focus training for specific roles or careers

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Type the correct answer in the box. Spell all words correctly.

notka56 [123]

Answer:

Doubtful

Explanation:

The company will record the uncollectible $5,670 of its accounts receivable as a debit to uncollectible accounts expense and a credit to the DOUBTFUL account.

This is evident in the fact that the bad debt allowance method has three main principles which are:

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