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Svetlanka [38]
3 years ago
6

Process X has fixed costs of $10,000 and variable costs of $2.40 per unit. Process Y has fixed costs of $9,000 and variable cost

s of $2.25 per unit. Which of the following statements is true?
a.The crossover point is approximately 6667 units.
b. It is impossible for one process to have both of its costs lower than those of another process.
c. Process Y is cheaper than process X at all volumes; there is no crossover point.
d. Process X should be selected for very large production volumes.
e. Process X is more profitable than process Y and should be selected.
Business
1 answer:
Arada [10]3 years ago
8 0

Answer:

The correct answer is C.

Explanation:

Giving the following information:

Process X has fixed costs of $10,000 and variable costs of $2.40 per unit. Process Y has fixed costs of $9,000 and variable costs of $2.25 per unit.

X= 10,000 + 2.4*x

Y=9000 + 2.25y

We will suppose 5 levels of production

1 units, 1000 units , 5550 units, 20,000 units, 110,111 units.

1 unit:

X= $10,002.4

Y= $9,002.25

1000 units:

X= $12,400

Y= $11,250

5550 units:

X= $23,320

Y= $21,487.5

20,000 units:

X= $58,000

Y= $54,000

110,111 units:

X= $274,266.4

Y= $256,749.75

Process Y has a lower fixed cost and a lower variable cost. In all quantities of production, it will present a lower total cost compare to Process X.

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3 years ago
Partial income statements for Sherwood Company summarized for a four-year period show the following: 1. Restate the partial inco
OlgaM077 [116]

Answer:

1. The corrected gross profit are as follows:

2015 = $704,000

2016 = $836,000

2017 = $859,000

2018 = $1,024,000

2-a  Gross profit percentage before and after correction are as follows:  

Particulars                2015     2016       2017      2018

Before correction      32%       33%        31%        32%

After correction         32%       32%        32%        32%

2-b. Yes. This is because the gross profit percentage for the years are approximately the same at 32% after the correction was made.

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question as follows:

Partial income statements for Sherwood Company summarized for a four-year period show the following:

                          2015             2016                  2017                  2018

Net Sales     $2,200,000   $2,600,000    $2,700,000      $3,200,000

COGS           <u>   1,496,000  </u>   <u>    1,742,00</u>      <u>  1,863,000</u>       <u>   2,176,000</u>

Gross Profit  <u>   $704,000  </u>    <u> $858,000  </u>   <u>  $837,000   </u>    <u> $1,024,000 </u>

An audit revealed that in determining these amounts, the ending inventory for 2016 was overstated by $22.000. The inventory balance on December 31, 2017, was accurately stated. The company uses a periodic inventory system.

Required: 1. Restate the partial income statements to reflect the correct amounts, after fixing the inventory error, 2-a. Compute the gross profit percentage for each year (a) before the correction and (b) after the correction 2-b. Does the pattern of gross profit percentages lend confidence to your corrected amounts?

The explanation of the answer is now given as follows:

1. Restate the partial income statements to reflect the correct amounts, after fixing the inventory error

Note: See the attached excel file for the fixing the inventory error and the restated partial income statements to reflect the correct amounts, after fixing the inventory error.

The effect of the overstatement of closing inventory is reducing the 2016 cost of goods sold. To correct this in the attached excel file, the opening balance is reduced by $22,000 and this makes cost of goods sold of 2016 to increase and the cost of goods sold of 2017 to decrease by $22,000.

2-a. Compute the gross profit percentage for each year (a) before the correction and (b) after the correction

Note: See the attached excel file for the computed the gross profit percentage for each year (a) before the correction and (b) after the correction.

In the attached excel file, the following formula is used:

Gross Profit percentage = Gross profit / Net Sales) * 100

2-b. Does the pattern of gross profit percentages lend confidence to your corrected amounts?

Yes. This is because the gross profit percentage for the years are approximately the same at 32% after the correction was made.

Download xlsx
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Answer:

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d. What is your average miles-per-gallon?  QUANTITATIVE DATA

e. What is your overall rating of your new vehicle? (l- to 10-point scale with 1 Unacceptable and 10 Truly Exceptional) QUANTITATIVE DATA

Explanation:

Quantitative data can be measured in numbers, e.g. 20 miles per gallon. While categorical data refers to non-numerical responses, e.g. higher quality, better looks, and is generally obtained by choosing one response from a group of available answers.

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Answer:

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Answer:

The answer is C.

Explanation:

A decrease in inventory means customers are buying inventories (goods) from the business. It is an inflow because money comes in.

Option A is incorrect because a decrease in common stock means shareholders are withdrawing their shareholding from the business and the business will pay them. This is an outflow.

Option B is incorrect because a decrease in long term debt means the business is paying its debt or redcuing its liability and this is an outflow.

Option D is also incorrect because an increase in fixed assets means the business is buying this asset with cash and this is an outflow

6 0
3 years ago
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