Answer:
the solutions are below.
Explanation:
1. The wages and utility bills that Andrew pays is <u>explicit cost</u>
2. The rental income Andrew could receive if he choose to rent out his showroom <u>is implicit cost</u>
3. The salary Andrew could earn if he worked as a financial advisor s an <u>implicit cost</u>
4. The wholesale cost for the boats that Andrew pays the manufacturer is an <u>explicit cost.</u>
<u></u>
<u>accounting profit = </u>revenue - explicit cost
= 793000-[430000+301000]
=$62000
<u>Economic profit = revenune - [explicit cost + implicit cost]</u>
<u>= </u>793000-[430000+301000+50000+15000]
= 793000-796000
= -$3000
<u></u>
<u></u>
<u></u>
<u></u>
<u></u>
Answer:
139 units
Explanation:
In order to compute the number of orders place each year so that it can minimize the total inventory cost we need to use the economic order quantity formula i.e shown below:
The computation of the economic order quantity is shown below:
where,
Annual demand = 80,000 cases
Ordering cost = $12
And, the carrying cost = $100
Now placing these values to the above formula
So, the economic order quantity is
= 139 units
Answer:
option (c) 8 years
Explanation:
Data provided in the question:
Cost of the machine = $240,000
Useful life = 10 years
Salvage value = 0
Net income = $6,000 each year
Now,
Using the straight-line method of depreciation
Annual depreciation = [ Cost - Salvage value ] ÷ Useful life
= [ $240,000 - 0 ] ÷ 10
= $24,000
Thus,
Cash flow = $6,000 + $24,000
= $30,000
Therefore,
The payback period = ( Cost ) ÷ ( Cash flow )
= $240,000 ÷ $30,000
= 8 years
Hence,
the correct answer is option (c) 8 years
Answer:
$210,000
Explanation:
The computation of the external price is shown below
Making cost = buying cost
$120,000 + $25,000 + $45,000 + $30,000) = external price + Unavoidable fixed cost (30,000-20,000)
$220,000 = External price + $10,000
So,
External price = 210,000
Hence, the same is to be considered
Therefore the external price is $210,000
