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OLEGan [10]
3 years ago
14

The selling price of imported olive oil is $20 per case. Your cost is 15 Euros per case, and the exchange rate is currently 1.25

, so it takes 1.25 Euros to buy $1. Your largest customer has ordered 15,000 cases of olive oil. How much is the pretax profit for this transaction?
Business
1 answer:
My name is Ann [436]3 years ago
5 0

Answer:

$120,000

Explanation:

According to this question, the selling price (S.P) of one case of imported olive oil is $20 while the cost price (C.P) is €15.

The currencies are not the same. They have to be the same in order to work with them. The exchange rate of both currencies, according to the question is:

€1.25 = $1

We'll be making both the S.P and C.P dollars ($).

Hence, €15 will be 15 ÷ 1.25 = $12

This means that the C.P is $12 and the S.P is $20 per case.

If a customer ordered 15,000 cases of olive oil;

A) the cost price (C.P) of 15,000 cases of olive oil will be $12 × 15,000 = $180,000

B) the selling price (S.P) of 15,000 cases of olive oil will be $20 × 15,000 = $300,000

In any business, the profit is always the selling price minus the cost price i.e. P = S.P - C.P

Hence, the pretax profit on the 15,000 cases of olive oil will be;

$300,000 - $180,000 = $120,000.

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A new public works project requires 20,000 hours of labor to complete. a. Suppose the labor market is perfectly competitive and
Bumek [7]

Answer:

a. $300,000

b. $200,000

Explanation:

a. The opportunity cost for labor is calculated by multiplying the hours of labor needed to complete the project with the market wage rate.

20,000 hours * $15 per hour = $300,000

b. There are some labors that are unemployed and has agreed to work for $10 per hour. The opportunity cost will now be lower than the previously calculated

20,000 hours * $10 per hour = $200,000

c. The opportunity cost depends on the wage rate of the labor. When the labors are employed at market rate, the opportunity cost is high and when there is unemployment the labors are willing to work for lower wage rate. The opportunity cost is decreased.  

6 0
3 years ago
EvenFlo Pipes forecasts a small increase in sales next year. To achieve this growth in sales, however, the firm must purchase an
TEA [102]

Answer: a. The firm must purchase lumpy assets to achieve the increase in sales.

Explanation:

EvenFlo Pipes needs to sell more pipes in order to see an increase in sales. Assuming they are the producers, they will need to produce more pipes than they have been doing and this will need them to increase their production capacity.

To do so they would have to invest in fixed assets as these are what produce pipes. This is why the firm will have to purchase lumpy assets that will help them produce and sell more pipes.

3 0
3 years ago
Tirri Corporation has provided the following information: Cost per UnitCost per PeriodDirect materials$ 7.05 Direct labor$ 4.20
Kazeer [188]

Answer:

Contribution margin per unit= $12.85

Explanation:

Giving the following information:

Direct materials$ 7.05

Direct labor$ 4.20

Variable manufacturing overhead$ 1.55

Sales commissions $ 1.15

Variable administrative expense$ 0.40

<u>To calculate the contribution margin, we need to use the following formula:</u>

Contribution margin per unit= selling price - total unitary variable cost

Contribution margin per unit= 27.2 - (7.05 + 4.2 + 1.55 + 1.15 + 0.4)

Contribution margin per unit= $12.85

8 0
2 years ago
Craftmaples, a chain of handicraft stores, was established with the purpose of preserving traditional handicrafts. The company's
Tomtit [17]

Answer: Company mission

Explanation: The company mission refers to the objectives mentioned  in the mission statement of the organisation. It is a short statement which describes why the organisation exists and what are its goals. This statement also states the location of the organisation and other important factors like major customers.

In the given case, Craftmaples has the purpose of traditional handicrafts. Thus, all their operations and activities will move towards this one goal.

Hence from the above we can conclude that this case is an example of mission statement.

3 0
3 years ago
Stadford Inc. is financed with 40 percent debt and 60 percent equity. This mixture of debt and equity is referred to as the firm
lesya692 [45]

Answer: Capital structure                            

Explanation: In simple words, capital structure refers to the proportion of different securities that an organisation uses as a combination to fund its operations. In other words, the amount of debt and equity in total capital in hand of the business is termed as capital structure.

Capital structure is of high importance to the investors as it directly impacts the liquidity and profitability of the organisation.

The ability of a company to bear its short term obligation is called liquidity and the ability to generate profit with given amount of resources is called profitability.

8 0
3 years ago
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