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3 years ago

Variable Cost Ratio, Contribution Margin Ratio

Business

1 answer:

xenn [34]3 years ago

4 0

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. The unit variable cost is $45. Fixed factory overhead is $20,000 and fixed selling and administrative expense is $29,500.

To calculate the variable cost ratio, we need to use the following formula:

Variable cost ratio= unitary variable cost / selling price

Variable cost ratio= 45/75= 0.6

The contribution margin rate is the difference between the contribution margin and the selling price:

CM ratio= Contribution margin / selling price

CM ratio= (75 - 45)/ 75= 0.4

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You have a chance to buy an annuity that pays $550 at the beginning of each year for 3 years. You could earn 5.5% on your money

Oliga [24]

Answer:

$1,565

Explanation:

Enter the following inputs into financial calculator, we will have:

n = 3 years

Present value (PV): The amount that you should pay for the annuity. This is the missing value we need to calculate

Future value (FV): FV = 0, there is no future value of an annuity

PMT: The amount that annuity pays per year. ($850)

i/r = 5.5%: The interest you expect to receive from the annuity

PV = $1,484

Since the payment is made at the beginning of each year, you should multiply the PV amount by (1+0.055)

The final answer would be 1,484 x 1.055 = $1,565

The most you should pay is $1,565

7 0

4 years ago

Too Young, Inc., has a bond outstanding with a coupon rate of 6.9 percent and semiannual payments. The bond currently sells for

dlinn [17]

Answer:

7.43%

Explanation:

Where the debt is publicly traded , the cost of debt is equal to the yield to maturity

Approximate yield to maturity = [coupon +(face value - market price )/ number of years to maturity ]/ [{face value + market price]/2]*100

Face value - 2000

Market price - 1905

years to maturity= 30 years

Coupon =( 6.9%*2000)/ 2 = 69

Workings

[69 + (2000-1905)/30] / [(2000+1905]/2 *100)

([69+3.17]/[(3905]/2*100)

(72.17/1952) * 100 = 3.70

Annual yield = 3.7*2= 7.4%

7.4 % being an approximate yield value , the closest option is 7.43%

8 0

3 years ago

The following data refer to Brompton Company’s ending inventory:

Leona [35]

Answer:

Unit cost

Explanation:

They ending inventory

4 0

3 years ago

The most useful allocation basis for the departmental costs of an advertising campaign for a storewide sale is likely to be: Mul

azamat

Answer:

Proportion of sales of each department.

Explanation:

Advertising expense directly effects the sales of the business. As the campaign is made store-wide sales and it does not directly traceable to any specific department. It need proper basis for allocation of expenses. The proportion of sales of each department is the most suitable basis from all of the given options because the share of benefit from the campaign is received in the form of sale. A campaign might mostly effects the sales.

3 0

3 years ago

Delilah purchased a wheelchair with an installment loan that has an APR of 18 percent. The wheelchair sells for $2,007. The stor

alukav5142 [94]

Answer:

$748.48

Explanation:

Cost of wheelchair = $2,007

Down payment = Cost of wheelchair*20% = $2,007*20% = $401.40

Amount of finance = Cost of wheelchair - Down payment = $2,007 - $401.40 = $1,605.60

Interest rate = 18% * 1/12 = 1.5%per month

Term = 54 month

Monthly payment = Amount of finance*I/[1-(1+I)^-n]

Monthly payment = $1,605.60*1.5%/[1-(1+1.5%)^-54]

Monthly payment = $1,605.60*1.5%/[1 - 0.447541]

Monthly payment = $1,605.60*0.015/0.55246

Monthly payment = $43.59411

Total amount paying for loan over a period = Monthly payment * Term = $43.59411 * 54 = $2354.08

Amount of finance charge = Total amount paying for loan - Amount of loan

Amount of finance charge = $2354.08 - $1,605.60

Amount of finance charge = $748.48

5 0

3 years ago