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3 years ago

Select the correct statement regarding break-even point analysis.

Business

1 answer:

svetoff [14.1K]3 years ago

3 0

Answer:

Option B is true.

Explanation:

Giving the following information:

The break-even point in units formula is:

Break-even point= fixed costs/ contribution margin

What changes the break-even point:

A variation in fixed costs.

A variation on the selling price.

A variation in the unitary variable cost.

<u>The higher the fixed costs, the higher the number of units. Lower the contribution margin, the higher the number of units.</u>

Therefore:

a. An increase in contribution margin per unit causes the break-even point in units to increase. False, is the opposite.

b. An increase in fixed costs causes the break-even point to increase. True, now the organization needs to sell more units to cover the fixed costs.

c. The break-even point in sales dollars equals total fixed costs divided by contribution margin per unit. False, in dollars you need to divide it for the contribution margin ratio (contribution margin / selling price).

d. A decrease in the variable cost per unit causes the break-even point in units to increase. False, is the opposite.

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The main goal of resource development is to find ways to promote the central planning of resource utilization so that resources

Brilliant_brown [7]

Answer:

Allocate existing resources more efficiently among competing uses.

Explanation:

The main goal of resource development is to find ways that allocate resources more efificiently, to spread the available resources in a way that maximizes economic and social benefit taking into account the different competing uses.

Resource development does not necessarily promote central planning because it can make use of market strategies to achieve its goal, and it cannot increase the amount of resources available as well, because these are determined by the natural endownment that each area has.

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3 years ago

2. The Jasmine Tea Company purchased merchandise from a supplier for $43,338. Payment was a noninterest-bearing note requiring J

cestrela7 [59]

Answer:

Explanation:

Given the following :

Purchased merchandise = $43,338

Number of payments required = 6

Payment per period = $8,000

PV factor (PVIFA) = (purchased merchandise / payment per period)

PVIFA = (43,338 / 8000) = 5.41725

Using the PVIFA table, we locate the interest rate on PVIFA factor of 5.41725 for a period of 6 years.

For PVIFA of 5.4172, the interest rate is 3%

Hence the implicit Interest t rate = 3%

PVIFA = [1 - (1+r)^-n] ÷ r

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3 years ago

Bauer's Supply Chain Management Student Organization provides networking opportunities and dinner meetings with hiring managers,

givi [52]

Answer:

Bauer SPO

Explanation:

Bauer SPO is a primer student organization of the supply chain and management at the university of Houston C.T. Bauer College of Business.

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3 years ago

If a company has excess capacity, increases in production level will increase variable production costs but not fixed production

den301095 [7]

Answer; True

Explanation;

When a company has excess capacity, it means that potentially it could produce more than it is producing at the moment. As this potential already takes into account the fixed costs, this means that given the fixed costs it currently has, more goods could be produced on those same fixed costs and they wouldn't increase.

Increasing production level would therefore only increase variable costs which rise whenever production rises as they are directly related to the production of goods.

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3 years ago

On January 1, year 1, Dave received 1,000 shares of restricted stock from his employer, RRK Corporation. On that date, the stock

butalik [34]

Answer:

Taxes on January 1, year 1= $1400

Taxes on Dec 31, year 4=$3300

Explanation:

The question relates to 'EQUITY GRANT', which is some sort of compensation given to somebody, especially/specifically to employees of an entity provided that certain conditions/vesting requirements are satisfied by the employee.

Now on January 1, year 1 Dave has received 1000 shares, for him the shares received is treated is income for Dave, as the shares are being offered against certain services rendered by Dave to RRK corporation. So on January 1 Dave would record income and pay income tax as follows:

Value of shares on Jan 1/ income= 1000×$7

Value of shares on Jan 1/ income= $7000

<em>Lets assume income tax is 20% and marginal tax rate is 10%,</em> the tax consequences would be as follows:

TAXES = $7000×20%

TAXES = $1400

There will be no tax consequences at the vesting date and at the end of year 4 (the date when he sells them) there will be tax consequences of $4000.

At year 4 = 1000×$40

Amount realized= $40000 -$7000

Taxes at marginal rate= $33000×10%

Taxes at marginal rate= $3300

(Note: $7000 is subtracted because it's already present in $40000).

8 0

3 years ago