Answer:
The correct answer is E.
Explanation:
Giving the following information:
Forrester Company is considering buying new equipment that would increase monthly fixed costs from $276,000 to $544,500 and would decrease the current variable costs of $60 by $15 per unit. The selling price of $100 is not expected to change.
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 544,500/ [(100-45)/100]
Break-even point (dollars)= $990,000
Answer:
8.14
Explanation:
The Rate of Return is 8.14 from my calculations which you can find in the attached file.
Now since the Rate of return is 8.14. Which is less than MARR of 12%, it shows that investment is not good.
Answer:
$69,000
Explanation:
The computation of the operating income would be shown below:
= Buying cost - making cost
where,
Buying cost equals to
= 60,000 × $3
= $180,000
And, the making cost would be
= Variable cost + fixed cost × avoid percentage
= $90,000 + $70,000 × 30%
= $90,000 + $21,000
= $111,000
Now put these values to the above formula
So, the value would equal to
= $180,000 - $111,000
= $69,000
Term total utility: The utility is the satisfaction that an individual derives from consuming a good or service. Similarly, total utility is the total satisfaction received from consuming a given total quantity of a good or service.
Marginal utility: Marginal utility is the added satisfaction a consumer gets from having one more unit of a good or service. The concept of marginal utility is used by economists to determine how much of an item consumers are willing to purchase. ... Marginal utility can be positive, zero, or negative.
