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irakobra [83]
2 years ago
12

Chiquita produces bananas for an average explicit cost of $0.25 per banana and sells 1 million bananas per week for a price of $

0.50 per banana. The implicit costs per week are $200,000. Which of the following statements is true? Group of answer choices Chiquita makes an accounting profit of $50,000. More than one answer is correct. Chiquita makes an economic profit of $250,000. Chiquita makes an economic profit of $450,000. Chiquita makes an accounting profit of $250,000.
Business
1 answer:
VLD [36.1K]2 years ago
5 0

Answer:

Chiquita makes an economic profit of $250,000.

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Selected accounts with amounts omitted are as follows: Work in Process Aug. 1 Balance 268,300 Aug. 31 Goods finished 168,800 31
Darina [25.2K]

Answer:

b.$12,990

Explanation:

Calculation to determine the amount debited to Work in Process for factory overhead in August, assuming a factory overhead rate of 30% of direct labor costs

Using this formula

Overhead applied = Direct labor cost * Predetermined overhead rate

Let plug in the formula

Overhead applied= 43,300 * 30%

Overhead applied= $12,990

Therefore the amount debited to Work in Process for factory overhead in August, assuming a factory overhead rate of 30% of direct labor costs is $12,990

8 0
2 years ago
The common stock of the C.A.L.L. Corporation has been trading in a narrow range around $145 per share for months, and you believ
user100 [1]

<u>Solution and Explanation:</u>

a) Let us calculate the value of call using Put-Call Parity,

i.e. Put + Stock = Call + Present Value of Exercise Price (note that it is 6 - months time period)

\text { i.e. } 8.19+145=\mathrm{call}+145 / 1.09^{\wedge} 0.5

\text { i.e. } 8.19+145=\mathrm{call}+145 / 1.044

Therefore, Call = $ 14.31

b1) The option strategy best suited in the given condition is - Short or Sell Straddle.

In shorting a straddle, you simultaneously sell a call and a put, thereby earning premium in both the legs of the strategy. It is a neutral options strategy wherein profits can be made when stock price is expected to remain stagnant. However it is to be noted that the profits are limited to the option premium earned on call and put but the risk is unlimited. i.e. only when you are reasonably sure as to the stock price remaining more or less constant, go for short straddle.

b2) Assuming that we went for short straddle, we earn $ 8.19 premium on put and $ 14.31 premium on call i.e. we earn maximum of $ 22.50 on this stock due to our position in options.

b3) WITHOUT CONSIDERING TIME VALUE -

Now, CONSIDERING TIME VALUE - the stock price would need to swing in either direction by (22.50 * 1.09 \times 0.5)= $ 23.49 for us to start incurring losses.

c) Buy the call, sell the put and lend $ 138.8848

Let 'Price' in the table below denote the stock price at the end of 6 months.

If we take a long position in call, the immediate CF is $ 14.31 (premium outflow).

If we take a short position in put, the immediate CF is $ 8.19 (premium inflow)

Position       Immediate CF      CF in 6 months         CF in 6 months

                                                         (if price < X)        (if price > X)

Call (Long)   -14.31                          0                      Price - 145

Put (Short)       8.19                         - (145 - price)               0

Lending Position  145 / 1.09^{\wedge} 0.5=138.88  145                     145

Total                                           Price                    Price

NOTE- FIGURES ARE SUBJECT TO ROUNDING OFF.

3 0
3 years ago
What is home equity?
shepuryov [24]
Difference between the purchase price of the home and its current market price
3 0
3 years ago
Read 2 more answers
Your cousin has asked you to bankroll his proposed business painting houses in the summer. He plans to operate the business for
Sonbull [250]

Answer:

the annual rate of return is 15.24%

Explanation:

The computation of the annual rate of return is shown below:

Given that

NPER = 5

PV = -$15,000

PMT = $4,500

FV = $0

The formula is shown below:

= RATE(NPER,PMT,-PV,FV,TYPE)

AFter applying the above formula, the annual rate of return is 15.24%

6 0
3 years ago
Blanchard Company manufactures a single product that sells for $ 180 per unit and whose total variable costs are $ 126 per unit
Nuetrik [128]

Answer:

Part 1

<u>Income Statement at 15,600 units</u>

Sales ($ 180 x 15,600)                                     $2,808,000

Less Variable Costs ($126 x 15,600)             ($1,965,600)

Contribution                                                        $842,400

Less Fixed Costs                                               ($842,400)

Net Income                                                                    $0

Part 2

$3,278,000

Explanation:

Break even (units) = Fixed Cost ÷ Contribution per unit

                               = $ 842,400 ÷ ($ 180 - $126)

                               = 15,600 units

<u>Assume the company's fixed costs increase by $ 141.000</u>

Break even (units) = Fixed Cost ÷ Contribution per unit

                               = ($ 842,400 + $ 141.000) ÷ ($ 180 - $126)

                               = 18,212 units

Break even Revenue = 18,212 x  $ 180 =  $3,278,000

6 0
2 years ago
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