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Ksju [112]
2 years ago
5

Direct material $ 8.40 Direct labor 24.40 Overhead 42.00 Total product costs per unit $ 74.80 An outside supplier offers to prov

ide Epsilon with all the units it needs at $66.20 per unit. If Epsilon buys from the supplier, the company will still incur 30% of its overhead. Epsilon should choose to:
Business
1 answer:
yaroslaw [1]2 years ago
8 0

Answer:

Epsilon should  make the product instead of buying it

Explanation:

Direct material = $8.4

Direct labor = $24.4

Overhead = $42

Relevant cost = $8.4 + $24.4 + ($42x70%)

Relevant cost = $8.4 + $24.4 +$29.4

Relevant cost = $62.2

Cost to make = $62.2

Cost to buy = $66.2

Difference = $4

Epsilon should make this product instead of buying it from another supplier

because the cost to make the product is much lower than buying it.

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Jerry, a partner with 30% capital and profit interest, received his Schedule K-1 from Plush Pillows, LP. At the beginning of the
Kisachek [45]

Answer:

The Jerry's adjusted basis in his partnership interest at the end of the year is $45,500

Explanation:

The adjusted basis of Jerry in his partnership is shown below:

= Partnership interest - Ordinary loss + long term capital gain + dividend - non deductible expense + cash contribution - share reduction

= $50,000 -$15,000 + $3,000 + $2,000 - $500 + $10,000 -$4,000

= $45,500

The ordinary loss, share reduction, and non deductible expense would decrease the Jerry interest in partnership firm while all other cost would increase his interest. That's why the amount is added and subtracted.

Hence, the Jerry's adjusted basis in his partnership interest at the end of the year is $45,500

5 0
3 years ago
Identify three features of an economic that is In the stage of ‘’economic growth’’
Pani-rosa [81]

Answer: They include land (including natural resources), capital, and labor.

Explanation:

6 0
2 years ago
Technology helps managers to monitor and control business activities and includes each of the following except:
rewona [7]

Answer:

Correct Answer:

b. Less extensive testing of records

Explanation:

Technology which is the use of machines or electronical devices to make work easier is applied in most organizations by organizational managers. <em>Unfortunately, less extensive testing of records is not one of its uses but rather detailed and extensive testing in order to check if there is any error in the records.</em>

8 0
3 years ago
Clean Tel, Inc. is considering investing in an 11-year project with annual cash inflows of $1,000,000. These cash inflows have a
cupoosta [38]

Answer:

d. 8%

Explanation:

The computation of the discount rate is shown below:

Initial investment = Present value of cash inflows

where,

Initial investment is $7,139,000

And, the present value of cash inflows

= Annual cash inflows × discount rate

We assume the discount rate be X

$7,139,000 = $1,000,000 × X

So,

X = 7139000 ÷ 1000000 = 7.139

= 8%

We simply applied the above formula in order to find out the discount rate

8 0
3 years ago
Suppose that two factors have been identified for the U.S. economy: the growth rate of industrial production, IP, and the inflat
Delicious77 [7]

Answer:

11.3%

Explanation:

Given that,

Growth rate of industrial production, IP = 4%

Inflation rate, IR = 3.0%

Beta = 1.1 on IP

Beta = 0.5 on IR

Rate of return = 7%

Before the changes in industrial production and inflation rate:

Rate of return = α + (Beta on IP) + (Beta on IR)

7% = α + (1.1 × 4%) + (0.5 × 3%)

7% = α + 4.4% + 1.5%

7% - 4.4% - 1.5% = α

1.1% = α

With the changes:

Rate of return:

= α + (Beta on IP) + (Beta on IR)

= 1.1% + (1.1 × 7%) + (0.5 × 5%)

= 1.1% + 7.7% + 2.5%

= 11.3%

Therefore, the revised estimate of the expected rate of return on the stock is 11.3%.

6 0
3 years ago
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