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d1i1m1o1n [39]
3 years ago
7

Wheeler Company can produce a product that incurs the following costs per unit: direct materials, $9.90; direct labor, $23.90, a

nd overhead, $15.90. An outside supplier has offered to sell the product to Wheeler for $45.44. If Wheeler buys from the supplier, it will still incur 40% of its overhead cost. Compute the net incremental cost or savings of buying.
Business
2 answers:
Dmitry [639]3 years ago
4 0

Answer:

$2.1 per unit

Explanation:

The total cost per unit would be

= Direct materials per unit + direct labor per unit + overhead cost per unit

= 9.90+23.90+15.90

= $49.7

Purchase price + overhead cost

=45.44 + 15.90 x 40%

= $51.8

The difference would be

= $51.8 - $49.7

= $2.1

The difference between both values is the net incremental cost or savings of buying.

Tasya [4]3 years ago
3 0

Answer:

Net incremental cost of buying                = $2.1 per unit

Explanation:                                                

                                                                            $/unit

Relevant variable cost of production

= 9.90 + 23.90 + (60%*15.90)=                       43.34

External purchase price                                  <u>45.44</u>

Net incremental cost of buying                           <u>2.1 </u>

Note the only 60% of the overhead are relevant, the balance of 40% would still be incurred whether the the product is produced internally or purchased from outside

Net incremental cost of buying = $2.1 per unit

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Answer:

Net operating cash flow   $68,300

Explanation:

Operating cash flow is the amount of cash generated by a company from its main and normal business activity. This cash flow is useful to gauge the financial viability of a firm's business activity; the larger the better.

It is essentially computed as the net movement of cash inflow and outflow in respect of a business activities.

It is computed as follows:                          

                                                                  $

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Add deprecation                                      17,200

Less increase in receivable                    (11.200)

add increase in payables                         <u>13,300</u>

Net operating cash flow                          <u> 68,300</u>

Note that only items that relate to trading which is the core business area of the Pearl Corporation are considered. Depreciation is  added because it is a non-cash item initially deducted from net income.

An increase in receivable means a reduction in cash while an increase in payables implies cash savings

Net operating cash flow   $68,300

3 0
2 years ago
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Answer:

B. Search Ads 360

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3 0
3 years ago
Firms pursuing global standardization or transnational strategies tend to prefer _____ arrangements.
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Wholly owned subsidiary arrangements are preferred by firms which pursue global standardization or transnational strategies.

This arrangement gives a firm an advantage since it is able to use profits from one market to improve its position in another competitive market.

Another few advantages of wholly owned subsidiary arrangements are tax benefits, limited liability, promotes diversification.

Learn more about wholly owned subsidiary arrangements here:

https://brainly.in/question/8819903

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1 year ago
The northwoods university it department is planning to buy additional computers for the computer lab. pedro bechara, manager of
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The market size and market growth rates in the foreign market can be influenced negatively by:______.A. population sizes, income
Nikitich [7]

Answer:

A. population sizes, income levels and cultural influences, the current state of the infrastructure and distribution and retail networks available.

Explanation:

The reason is that the foreign markets are affected by the cultural differences for example if US clothing brand enters Suadia Arabia then it can not sell its brands here because in the Suadia Arabian culture girls wear full sleeves and are not skin tight fits. This means that the culture have an influence over the foreign markets. Likewise the income level tells about how much the customer can spend on luxury items, population of customers available is also an attractive part that the investors see to move in the markets. The infrastructure of a country and the regional importance of the state are also the motivators for the foreign companies to move in to the market.

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