1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
ollegr [7]
3 years ago
7

Frank Co. is currently operating at 80 percent of capacity and is currently purchasing a part used in its manufacturing operatio

ns for $25 unit. The unit cost for Frank Co. to make the part is $30, which includes $3 of fixed costs. If 20,000 units of the part are normally purchased each year but could be manufactured using unused capacity, what would be the amount of differential cost increase or decrease for making the part rather than purchasing it
Business
1 answer:
azamat3 years ago
5 0

Answer:

If the company makes the product, income will decrease by $40,000.

Explanation:

Giving the following information:

Purchase price= $25

Production cost:

The unit cost for Frank Co. to make the part is $30, which includes $3 of fixed costs.

First, we need to calculate the total cost of buying the part:

Total cost= 20,000*25= $500,000

Now, the total cost of production:

We won't take into account the fixed costs, because there is unused capacity.

Total cost= 20,000*27= $540,000

If the company makes the product, income will decrease by $40,000.

You might be interested in
A.
borishaifa [10]

internet service providers

3 0
2 years ago
A major state university in the South recently raised tuition by 12%. An economics professor at this university asked his studen
Nady [450]

Answer:

Highly inelastic

Explanation:

Price elasticity of demand is a measure of the demand of a given service or commodity by utilizing it's price change. It can be calculated using the formula;

Price elasticity of demand=%change in quantity demanded/%change in price

%change in quantity demanded=((Final demand-Initial demand)/Initial demand)×100

((299-300)/300)×100=-0.33%

%change in price=12%

12%>0.33%

The change in price is larger than the change in demand, therefor the product is highly inelastic

3 0
3 years ago
Summarize the effect of credit card interest on the real cost of items.
JulijaS [17]

Answer with its Explanation:

The result is that some of the credit cards pays interests on the cash surplus and charges interests on the cash deficit. If the interest rate is higher then the interest on the real cost of items that are finance with the negative balance will be charged interest on the higher interest rate because the interest rate is higher. If the interest rate is lower then the effect of credit card interest rate would be higher on the real cost of items.

3 0
3 years ago
Suppose you are the manager of a local water company, and you are instructed to get consumers to reduce their water consumption
Veronika [31]

The price of the water needs to be raised by 40% when the consumption of water reduces by 10% and the price elasticity of demand results to 25%.

<h3>What is meant by the price of elasticity of demand?</h3>

The price elasticity of demand is determined as the proportionate variation in quantity with respect to variation in the price of a good.

Given values:

Change in water consumption (fall): 10%

Price elasticity of demand: 25%

Computation of percentage change in the price of water:

\rm\ Change \rm\ in \rm\ price \rm\ of \rm\ water=\frac{\rm\ Change \rm\ in \rm\ water \rm\ consumption}{\rm\ Price \rm\ elasticity \rm\ of \rm\ demand} \\\rm\ Change \rm\ in \rm\ price \rm\ of \rm\ water=\frac{10\%}{25\%} \\\rm\ Change \rm\ in \rm\ price \rm\ of \rm\ water=40\%

Therefore, there is an increase in water price by 40%.

Learn more about the price elasticity of demand here:

brainly.com/question/15010897

#SPJ1

6 0
1 year ago
The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses i
o-na [289]

Answer:

From the attached excel file, we havee:

Revenue and spending income from operations variance = $4,566 Favorable

Activity income from operations variance = -$5,860 Unfavorable

Explanation:

Note: See part a of the attached excel file for the flexible budget performance report that shows both revenue and spending variances and activity variances for September.

Also Note: See parts b and c of the attached excel file for the calculations of revenue and spending variances and activity variances respectively for September.

Download xlsx
8 0
2 years ago
Other questions:
  • The number of minorities in the workforce is _____. a. diminishing b. increasing c. unchanging d. decreasing
    10·1 answer
  • Which is least like the others<br> Bear, badger, elephant, hamster
    13·1 answer
  • What would NOT be part of making a comparison?
    7·1 answer
  • Which of the following is a disadvantage of electronic communication
    15·1 answer
  • The two stocks in your portfolio, X and Y, have independent returns, so the correlation between them, rXY is zero. Your portfoli
    10·1 answer
  • Santorino Company produces two models of a component, Model K-3 and Model P-4. The unit contribution margin for Model K-3 is $6;
    12·1 answer
  • Which option in a webmail program allows you to type a new message? The option allows you to create a new message. NextReset
    14·1 answer
  • The Talley Corporation had taxable operating income of $495,000 (i.e., earnings from operating revenues minus all operating cost
    11·2 answers
  • DS Unlimited has the following transactions during August.
    14·1 answer
  • The Talbot Company uses electrical assemblies to produce an array of small appliances. One of its high cost / high volume assemb
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!