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defon
3 years ago
6

Process A has fixed costs of $1000 and variable costs of $5 per unit. Process B has fixed costs of $500 and variable costs of $1

5 per unit. What is the crossover point between process A and process
B?

a. 50 units
b. 200 units
c. $2,500
d. $5,000
e. $9,500
Business
1 answer:
nadezda [96]3 years ago
3 0

Answer:

a. 50 units

Explanation:

The Crossover Analysis is totally inevitable when we need to identify the point whether we can switch one product to another that do have similarity in benefit, while they have different variable and fixed costs.

Then we should find the point for Crossover Units. Crossover Unit=(Fixed Cost 1 –Fixed Cost 2)/(Variable Cost 2-Variable Cost 2)

We have:

Process A with Fixed Cost=1000 and Variable Cost=5 for unit

Process B with Fixed Cost=500 and Variable Cost=15 for unit

Crossover point of unit=(Fixed Cost 1 –Fixed Cost 2)/(Variable Cost 2-Variable Cost 2)= (1000-500)/(15-5)=50 units.

This means that at 50 units, the total cost of each of the two projects is equal.  If you expect to sell more than 50 units then Project A would be the best choice.  If you expect to sell less than 50 units then Project B would be the best choice.

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Ben learns that the company was going to be laying off several employees over the next several months. He knew that the rumor mi
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Answer:

D. Call an all staff meeting and give everyone the news at once.

Explanation:

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3 years ago
The direct labor budget begins with the required production in units from the production budget.
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Both competitive firms and monopolies produce at the level where marginal cost equals marginal revenue. ​Then, other things rema
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Answer:

A. Competitive markets face perfectly elastic demand and marginal​ revenue, while monopolies face​ downward-sloping demand and marginal revenue.

Explanation:

In the case when competitive firms and monopolies generated at the level in which the marginal cost is equivalent to marginal revenue keeping the other things constant so the price should be less in the competitive market as compared to the monopoly because in the competitive markets it face perfectly elastic demand but in the monopoly it face the down ward sloping demand curve

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3 years ago
You are given the following information for O'Hara Marine Co.: sales = $75,500; costs = $35,200; addition to retained earnings =
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Answer:

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Depreciation Expense is:

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Explanation:

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sales = $75,500;

costs = $35,200;

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dividends paid = $8,420;

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tax rate = 23 percent

Net Income:

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dividends paid = $8,420

Total net income = $18,000

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Income tax (23%) of $23,377 = $5,377

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costs = $35,200

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