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Aloiza [94]
3 years ago
5

Jack's Lumber Yard receives 8,000 large trees each period that it subsequently processes into rough logs by stripping off the tr

ee bark and leaves (i.e., one tree equals one log). Jack's then must decide whether to sell its rough logs (for use in log cabin construction) at split-off or to process them further into refined lumber (for use in regular construction framing). Jack's normally sells logs for a per-unit price of $500. Alternately, each log can be processed further into 800 feet of lumber at an additional cost of $0.15 per board foot. Also, lumber can be sold for $0.75 per board foot.What is the contribution to income from selling the logs for log cabin construction?What is the contribution to income from processing the logs into lumber?Should Jack's continue to sell the logs or process them further into lumber?
Business
1 answer:
ivann1987 [24]3 years ago
7 0

Answer:

(i) $4,000,000

(ii) $3,840,000

Explanation:

(i) Contribution to income from selling the logs for log cabin construction:

= Large trees receive each period × per-unit price of logs

= 8,000 × $500

= $4,000,000

(ii) Contribution to income from processing the logs into lumber:

= Large trees receive each period × each log can be processed (feet) × (Selling price of lumber per board foot - Additional cost per board foot)

= 8,000 × 800 × (0.75 - 0.15)

= $3,840,000

(iii) Jack's continue to sell the logs only, because income from processing it as lumber is lower than log.

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Five consumers have the following marginal utilities of apples and pears: Consumer Marginal Utility of Apples Marginal Utility o
Leokris [45]

Answer:

Options C and E

Only Nick and Jake are optimising over his choice of fruit?

Explanation:

The marginal utility obtained from the purchase of a product is the amount of satisfaction derived from purchasing an additional unit of the product.

The utility is maximised when the satisfaction in terms of marginal utilities obtained from each product is equal to each other.

We obtain this simply by dividing the marginal utilities for each fruit by their price, and comparing them.

Dmitiri:

Apples: 8/1 =8

Pears: 10/2 =5

8/1 is not equals to 10/2

Frances:

Apples: 7/1 =7

Pears: 16/2 =8

7 is not equals to 8

Jake:

Apples: 6/1 =6

Pears: 12/2 =6

The marginal utility is equal hence Jake's choice is optimal

Latasha:

Apples: 5/1 =9

Pears: 9/2 =4.5

9 is not equals to 4.5

Nick:

Apples: 4/1 =4

Pears: 8/2 =4

The marginal utility is equal hence Nick's choice is optimal

5 0
3 years ago
In the short run, if average variable cost equals $50, average total cost equals $75, and output equals 100, the total fixed cos
musickatia [10]

Answer: $2500

Explanation:

From the question,

Average variable cost(AVC) = $50

Average total cost (ATC) = $75

Output (Q) = 100

Since Average fixed cost is the difference between the average total cost and the average Variable cost. This will be:

AFC = ATC - AVC

AFC = $75 - $50

AFC = $25

We should note that:

AFC = TFC / Q

TFC = AFC × Q

TFC = $25 × 100

TFC = $2500

Therefore, total fixed cost is $2500

5 0
3 years ago
Ramble On Co. wishes to maintain a growth rate of 8 percent a year, a debt-equity ratio of 0.37, and a dividend payout ratio of
Delvig [45]

Answer: 16.55%

Explanation:

Profit margin is the amount of earnings that a company has left when every expenses and costs have been deducted.

From the information given, firstly, we calculate the return on equity. This will be:

= Growth rate /(1 + Growth rate) × Retention ratio

= 8% / (1 + 8%) × 46%

= 0.08/(1 + 0.08) × 0.46

= 0.08/1.08 × 0.46

= 0.08/0.4968

= 0.1610

= 16.10%

Return on equity, ROE = 16.10%

We then calculate the profit margin. This will be:

= ROE / Asset turnover × Equity Multiplier

where,

Equity Multiplier = 1 + debt-equity ratio

= 1 + 0.37 = 1.37

Profit margin = ROE / Asset turnover × Equity Multiplier

= 16.10% / {(1/1.41) × 1.37}

= 16.10% / 0.71 × 1.37

= 0.1610 / 0.9727

= 0.1655

Profit margin = 16.55%

6 0
3 years ago
Prior to adjustment at August 31, Salary Expense has a debit balance of $322,200. Salaries owed but not paid as of the same date
Phantasy [73]

Explanation:

The Journal entry is shown below:-

a. Salary Expense Dr,             $2,550

          To salaries payable                $2,550

(Being accrual of salary is recorded)

b. Income summary Dr,           $324,750

        To Salary expense                    $324,750

($322,200 + $2,550)

(Being closing of salary expense is recorded)

4 0
3 years ago
Since the costs of producing an intermediate product do not change regardless of whether the intermediate product is sold or pro
Snowcat [4.5K]

Answer: a) true

Explanation:

The costs incurred to produce the intermediate products have already been incurred and as such are referred to as sunk costs.

They will not change regardless of whether the good is sold before further processing or if it is sold after. They therefore do not matter in the decision to either process or sell and so are not considered.

8 0
3 years ago
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