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tangare [24]
3 years ago
5

Lister Corporation has provided the following contribution format income statement. Assume that the following information is wit

hin the relevant range. Sales (3,000 units) $ 90,000 Variable expenses 58,500 Contribution margin 31,500 Fixed expenses 21,000 Net operating income $ 10,500 If sales increase to 3,040 units, the increase in net operating income would be closest to: (Round your intermediate calculations to 2 decimal places.)
(A) $420.00
(B) $140.00
(C) $1,200.00
(D) $780.00
Business
1 answer:
g100num [7]3 years ago
7 0

Answer:

(A) $420.00

Explanation:

We know that,

The net income = Sales - variable cost - fixed expense

Since, the sales units are increased by 40 units, so new sales units is 3,040 units

So, the sale per unit equals to

=  Total sales ÷ number of units

= $90,000 ÷ 3,000 units

= $30

So, the new sales

= Sales units × selling price per unit

= $3,040 × $30 = $91,200

The variable cost = Sales units × variable cost per unit

where,

Variable cost per unit =   Total variable cost ÷ number of units

= $58,500 ÷ 3,000 units

= $19.5

So, the new variable cost equals to

= 3,040 units × $19.5

= $59,280

And the fixed expense would remain the same

So, the net income would be equal to

= $91,200 - $59,280 -  $21,-00

= $10,920

The net income given is $10,500

So, the difference equals to

= $10,920 - $10,500

= $420

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3 0
3 years ago
Davidson company received $80,000 from the issuance of bonds, paid cash dividends of $10,000, sold long-term investments for $12
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Based on Davidson Company's cash from bonds, and cash dividends paid, the net cash flow from financing activities is $70,000.

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The net cash from financing acitivities is therefore:

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In conclusion, the net cash from financing is $70,000.

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8 0
2 years ago
Malone Imports stock should return 12 percent in a boom, 10 percent in a normal economy, and 2 percent in a recession. The proba
Rufina [12.5K]

Answer:

6.11%

Explanation:

For computing the variance, first we have to determine the expected return which is shown below:

= (Expected return of the boom × weightage of boom) + (expected return of the normal economy × weightage of normal economy)  + (expected return of the recession × weightage of recession)

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= 5% × (12% - 9.3%) ^2

= 0.3645

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= 85% × (10% - 9.3%) ^2

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For recession:

= 10% × (2% - 9.3%) ^2

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