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aalyn [17]
3 years ago
5

Deep River, a manufacturer of electronic cameras, has excess capacity. The company's New Hampshire plant has the following per-u

nit cost structure for item no. 656: Variable manufacturing $ 50 Fixed manufacturing 35 Variable selling 6 Fixed selling 9 Traceable fixed administrative 2 Allocated administrative 1 The traceable fixed administrative cost was incurred at the New Hampshire plant; in contrast, the allocated administrative cost represents a "fair share" of Deep River's corporate overhead. New Hampshire has been presented with a special order of 5,900 units of item no. 656 on which no selling cost will be incurred. The proper relevant cost in deciding whether to accept this special order would be:
Business
1 answer:
tiny-mole [99]3 years ago
6 0

Answer:

$50 per unit.

Explanation:

Relevant cost are the only cost that will be  affected by the management decision to produce the special order. All fixed costs are sunk costs and are therefore irrelevant to the decision. Since to selling cost will be incurred, this implies that only the Variable manufacturing $50 is relevant.

Therefore, the proper relevant cost in deciding whether to accept this special order would be $50 per unit.

And the total relevant cost would be:

Total relevant cost to order no 656 = Number of units * Variable manufacturing = 5,900 * $50 = $295,000.

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Loaded-Up Fund charges a 12b-1 fee of 1% and maintains an expense ratio of .75%. Economy Fund charges a front-end load of 2%, bu
Rom4ik [11]

Answer:

a. The amount in Loaded-UP Fund will grow to $104.25 after 1 year, while the amount in the Economy Fund will grow to $103.64 after 1 year.

b. The amount in Loaded-UP Fund will grow to $113.30 after 3 years, while the amount in the Economy Fund will grow to $115.90 after 3 years.

c. The amount in Loaded-UP Fund will grow to $151.62 after 10 years, while the amount in the Economy Fund will grow to $171.41 after 10 years.

Explanation:

The following are the relevant formulae to use:

Amount available in Loaded-UP Fund after a certain year = Investment * (1 + Rate of return – 12b-1 fee – Expense ratio)^Number of years ……………….. (1)

Amount available in Economy Fund after a certain year = Investment * (1 – Front-end load) * (1 + Rate of return – Expense ratio)^Number of years ……………….. (2)

Assuming investment is equal to $100 and using equations (1) and (2), we have:

a. 1 year?

Amount available in Loaded-UP Fund after 3 years = $100 * (1 + 6% - 1% - 0.75%)^1 = $104.25

Amount available in Economy Fund after 3 years = $100 * (1 - 2%) * (1 + 6% - 0.25%)^1 = $103.64

Therefore, the amount in Loaded-UP Fund will grow to $104.25 after 1 year, while the amount in the Economy Fund will grow to $103.64 after 1 year.

b. 3 years?

Amount available in Loaded-UP Fund after 3 years = $100 * (1 + 6% - 1% - 0.75%)^3 = $113.30

Amount available in Economy Fund after 3 years = $100 * (1 - 2%) * (1 + 6% - 0.25%)^3 = $115.90

Therefore, the amount in Loaded-UP Fund will grow to $113.30 after 3 years, while the amount in the Economy Fund will grow to $115.90 after 3 years.

c. 10 years?

Amount available in Loaded-UP Fund after 3 years = $100 * (1 + 6% - 1% - 0.75%)^10 = $151.62

Amount available in Economy Fund after 3 years = $100 * (1 - 2%) * (1 + 6% - 0.25%)^10 = $171.41

Therefore, the amount in Loaded-UP Fund will grow to $151.62 after 10 years, while the amount in the Economy Fund will grow to $171.41 after 10 years.

7 0
2 years ago
Martin purchased municipal bonds that yield 7% annually and certificates of deposit which yield 9% annually.
jeka94

Answer:

the amount invested in municipal bond is $8,000

the amount invested in certificated on deposits = $11,000 - $8,000

= $3,000

Explanation:

Data provided in the question:

Annual yield on municipal bond = 7% = 0.07

Annual yield on certificated of deposits = 9% = 0.09

Initial investment = $11,000

Annual income = $830

Now,

Let the amount invested in municipal bond be 'x'

Therefore,

the amount invested in certificated of deposits = $11,000 - x

Thus,

according to question

⇒ 0.07x + 0.09( $11,000 - x ) = $830

⇒ 0.07x + $990 - 0.09x = $830

⇒ -0.02x = $830 - $990

⇒ -0.02x = -$160

⇒ x = $8,000

Hence,

the amount invested in municipal bond is $8,000

the amount invested in certificated on deposits = $11,000 - $8,000

= $3,000

7 0
3 years ago
What is an outstanding check?
Solnce55 [7]

<span>An outstanding check is a check issued by the payor and released to the payee that remains to be undeposited or uncashed check at a certain financial period. When reconciling the bank statements with company books, an outstanding check is deducted from the unadjusted bank balance to arrive at the adjusted bank balance.  </span>

3 0
3 years ago
I want to buy a new car. My choices are a red convertible sports car or a full-size pick-up
Galina-37 [17]
pickup and 20,000 i think
5 0
2 years ago
Suppose the marginal cost curve in the short run first decreases and then increases. If marginal cost is decreasing, _____ must
In-s [12.5K]

Answer: D. marginal product; increasing; average variable cost; decreasing

Explanation:

The Marginal product curve is hump-shaped and the marginal cost curve is U-shaped because these two move in opposite directions to each other.

If the marginal cost is decreasing therefore, the marginal product must be increasing. If the marginal cost is decreasing and the marginal product is increasing, average variable cost will have to fall because every additional unit produced incurs less cost so the average has to fall as well.

6 0
3 years ago
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