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masya89 [10]
3 years ago
8

Bluebird Mfg. has received a special one-time order for 15,000 bird feeders at $3 per unit. Bluebird currently produces and sell

s 75,000 units at $7.00 each. This level represents 80% of its capacity. Production costs for these units are $3.50 per unit, which includes $2.25 variable cost and $1.25 fixed cost. If Bluebird accepts this additional business, the effect on net income will be:
A. $45,000 increase.

B. $11,250 increase.

C. $33,750 increase.

D. $7,500 decrease.

E. $33,750 decrease
Business
1 answer:
UkoKoshka [18]3 years ago
8 0

Answer:

The correct answer is B.

Explanation:

Giving the following information:

Special one-time order for 15,000 bird feeders at $3 per unit.

Variable cost= $2.25

<u>Because it is a special offer and there is unused capacity, we will not have into account the fixed costs.</u>

Effect on income= 15,000*(3 - 2.25)= $11,250 increase.

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Ponzi Products produced 100 chain-letter kits this quarter, resulting in a total cash outlay of $10 per unit. It will sell 50 of
vesna_86 [32]

Answer:

Explanation:

From the given information: we are to:

a)  Prepare an income statement for Ponzi for today and for each of the next three quarters. Ignore taxes. (LO1)

An income statement involves depicts the achievement of a certain business over  a period of time .

The income statement for Ponzi for today and for each of the next three quarters is as follows:

                        Quarter 1      Quarter 2       Quarter 3        Quarter 4

Sales                   $0                  $550              $600             $0

 (-)

cost of goods       0                   $500              $500             $0

sold

Net income           0                  $50                 $100               0

We will see that  in the first and the fourth quarter ; the firm neither pay any cash to purchase goods nor collect cash for sales. Thus ; the cashflow will be zero in those instances and we will consider only the second and the fourth quarter for sales income and production cost.

SO:

Quarter 2 sales = 50 × 11 = $550

Quarter 3 sales = 50 × 12 = $600

(b) What are the cash flows for the company today and in each of the next three quarters?

Cash flow is like a database that helps to keep tracks and records the cash inflows and cash outflows of a financial instrument.

The cash flow in each month is as follows:

                        Quarter 1      Quarter 2       Quarter 3        Quarter 4

Sales                   $0                  $550              $600             $0

 (-)

cost of goods       0                   $500              $500             $0

sold

Net income           0                  $50                 $100               0

Inventories         $1000          $500                   0                  0

Account

Receivables       0                    550                  600                0

Net working

capital                 $1000          $1050             $600                0

Change in WC   $1000           $50                 $450              $600

CashFlow           $1000          $0                  $550              $600

Hint:

The Cash flow = net income - change in net working capital

The net working capital = Inventory + Account receivables

Quarter 2 sales = 50 × 11 = $550

Quarter 3 sales = 50 × 12 = $600

(c) What is Ponzi’s net working capital in each quarter? (LO1)

The net working capital in each quarter can be illustrated as :

                        Quarter 1      Quarter 2       Quarter 3        Quarter 4

Inventories        $1000             $500              0                    $0

Account recei-    0                   $550              $600             $0

vables

Net working       $1000             $1050           $600               $0

capital

8 0
3 years ago
You are the executive director of a nonprofit that runs an animal shelter and animal services, such as low-cost spay/neuter prog
KonstantinChe [14]

Answer:

I will:

b) Hold meetings with employees, volunteers, and representatives of other local shelters and listen carefully as they brainstorm ideas.

c) Honestly acknowledge the challenges the organization faces while also communicating optimism about finding the resources to fulfill your mission.

Explanation:

a) Withholding information about the organization's financial picture will not make employees to be loyal.  They are likely to find out the true position sooner than later.  If information is withheld and they find out later, they would never be loyal.  They would certainly leave the organization before financing is found for the organization sustenance.

b) Deceiving people by staying in the office and maintaining a "poker face" is not an option either.  "Poker face" cannot last forever.  One day, the true picture will show on the face.  Deception is not an art for business progress.

8 0
3 years ago
You love peanut butter. You hear on the news that 50 percent of the peanut crop in the South has been wiped out by drought, and
Vinil7 [7]

Answer:

B. your demand for peanut butter increases today.

Explanation:

7 0
3 years ago
Fred Company paid $48,000 for a two-year insurance policy, ($2,000 per month), on October 1 and recorded the $48,000 as a debit
QveST [7]

Answer:

The adjusting entry Fred should make on December 31, the end of the accounting period:

b. Debit : Insurance Expense 6,000 Credit: Prepaid Insurance 6,000

Explanation:

On October 1, Fred Company paid $48,000 for a two-year insurance policy, ($2,000 per month)

From October 1 to December 31, Fred Company has used the insurance for 3 months.

Insurance Expense = $2,000 x 3 = $6,000

The adjusting entry Fred should make on December 31, the end of the accounting period:

Debit Insurance Expense $6,000

Credit Prepaid Insurance $6,000

7 0
3 years ago
Cross Town Cookies is an all-equity firm with a total market value of $695,000. The firm has 46,000 shares of stock outstanding.
Anika [276]

Answer:

$1.67

Explanation:

The amount of shares that was repurchased is:

$300,000/($4,187,100/127,500)

= 9,135 shares

Outstanding shares is:

127,500-9,135

= 118,365 shares

Therefore, the EPS is:

= [$215,600 - ($300,000×.06)]/118,365.

= $1.67

Thus, the amount EPS after the debt was issued is $1.67

3 0
3 years ago
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