According to Michael Porter, companies should pick one of the three basic strategies and stick with it. Walmart has followed th
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Answer:
The answer is in the explanation
Explanation:
Phoenix Company
Fixed Budget Report
For the 'fear Ended 31st December 2015
Flexible Budget Flexible Budget for
Variable Amount Total Fixed Unit Sales Unit Sales
per unit cost of 14,000 of 16,000
Sales at 210 $ per unit (A) 210 2940000 3360000
Variable cost
Direct Material $ 62.00 $868,000.00 $ 992,000.00
Direct Labor $ 14.00 $196,0000.00 $ 224,000.00
Machinery repairs $ 3.00 $ 42,000.00 $ 48,000.00
Utilities $ 2.00 $ 28,000.00 $ 32,000.00
Packaging $ 6.00 $ 84,000.00 $ 96,000.00
Shipping $ 6.00 $ 84,000.00 $ 96,000.00
Total Variable Expenses (B) $ 93.00 $1,302,000.00 $1,488,000.00
Contribution margin (C=A-B) $ 117.00 $ 1,638,000.00 $ 1,872,000.00
Fixed cost
Depreciation $ 315,000.00 $315,000.00 $ 315,000.00
Plant Management Salaries $ 210,000.00 $210,000.00 $ 210,000..
Utilities $ 180,000.00 $ 180,000.00 $ 180,000.00
Sales Salary $ 235,000.00 $ 235,000.00 $ 235,000.00
Advertising Expenses $ 100,000.00 $ 100,000.00 $ 100,000.00
Salaries $ 241,000.00 $ 241,000.00 $ 241,000.00
Entertainment Expenses $ 85,000.00 $ 85,000.00 $ 85,000.00
Total Fixed Expenses (D) $1,366,000.00 $1,366,000.00 $ I,366,000.00
Net Profit (C-D) $ 272,000.00 $ 506,000.00
Variable Cost Per unit= Variable Cost / 150000
Increase in Operating Income if Sales rise to 18000
Phoenix Company
Forecast contribution Margin Income Statement
For the year Ended 31st December 2015
Sales in Units 15,000 18,000
Contribution Margin Per Unit $ 117 $ 117
Contribution Margin $ 1,755,000 $2,106,000
Fixed Costs $ 1,366,000 $ 1,366,000
Expected increase in Operating Income $ 389,000 $ 740,000
$ 351,000
Income (loss) from operation sale is reduced to 12000
Phoenix company
Forecast contribution Margin Income Statement
For the year Ended 31st December 2015
Sales in Units 15,000 12,000
Contribution Margin Per Unit $ 117 $ 117
Contribution Margin $ 1,755,000 $1,404,000
Fixed Costs $ 1,366,000 $ 1,366,000
Operating Income $ 389,000 $ 38,000
check the attached image for the correct arrangement of the tables and solution
Answer:
9.73%
Explanation:
For computing the after tax cost of debt first we have to determine the cost of debt by applying the RATE formula i.e. to be shown in the attachment below:
Given that,
Present value = $604.42
Future value or Face value = $1,000
PMT = 1,000 × 8% ÷ 2 = $40
NPER = 20 years × 2 = 40 years
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after solving this,
1. The pretax cost of debt is 6.95% × 2 = 13.9%
2. And, the after tax cost of debt would be
= Pretax cost of debt × ( 1 - tax rate)
= 13.9% × ( 1 - 0.30)
= 9.73%
