Solution:
Differential Analysis:
Continue Eliminate Net income
Inc/Dec
Sales 201000 0 -201000
variable cost 176000 0 176000
Contribution margin 25000 0 -25000
Fixed cost 30000 20300 9700
Net income / (loss) -5000 -20300 -15300
No, The Product line shall not be eliminated
What poster are you referring to? There’s nothing there but the question
The correct answer is retailing.
Retailing is the process of selling goods and services to individuals for their personal use. You have stores, which are considered to be retailers of particular goods and services, and then you have customers who go there to buy those goods and services.
Answer:
A total interest $37,246.54
B It will pay $18,304.50 dollar per year
<em>It is better to use the boan borrowing as the installment per year is lower.</em>
Explanation:
A installment times time less principal = total interest
18,935.22 x 7 - 95,300 = 37,246.54
B calcualte the installment of the bank offer:
PV 95,300.00
time 7
rate 0.08
C $ 18,304.500
<u>As it is lower than manufactures quota it should be accepted </u>
Answer: $2,400
Explanation:
The best transfer price is the related cost to the division in question and this is usually the Variable cost of production.
Since there is excess capacity, we can assume that no benefits will be lost in transit.
To calculate therefore, we simply add up all the Variable costs of production.
= Direct labor + Direct Material + Variable Overhead.
= 1,300 + 700 + 400
= $2,400
$2,400 is the best transfer price to avoid transfer price problems.
