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diamong [38]
2 years ago
7

Cool Compartments Inc. has offered to sell 20,000 ice-makers to Refrigerator Company for $28 per unit. If Refrigerator accepts C

ool Compartments' offer, the facilities used to manufacture ice-makers could be used to produce water filtration units. Revenues from the sale of water filtration units are estimated at $80,000, with variable costs amounting to 60% of sales. In addition, $6 per unit of the fixed overhead associated with the manufacture of ice-makers could be eliminated.
For Refrigerator Company to determine the most appropriate action to take in this situation, the total relevant costs of make vs. buy, respectively, are:________
Business
1 answer:
r-ruslan [8.4K]2 years ago
7 0

Answer:

$680,000 vs $440,000

Explanation:

Total Costs to Make :

Manufacturing Costs ($34 x 20,000)                                     $680,000

Total                                                                                          $680,000

Total Cost to Buy :

Purchase Price ($28 x 20,000)                                               $560,000

<u>Less Savings :</u>

Fixed overhead ($6 x 20,000)                                                ($120,000)

Total Cost                                                                                  $440,000

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Gomez runs a small pottery firm. He hires one helper at $11,500 per year, pays annual rent of $7,000 for his shop, and spends $2
madreJ [45]

Answer:

in this problem, we need to calculate Gomez's accounting and economic profit. To do this, let us first classify and list the explicit and implicit costs. Revenue: Sales: $85,000 Explicit costs: Cost of one helper: $18,000 Rent: $8,000 Materials: $24,000 These are the costs that require an outlay of cash. Implicit costs: Opportunity cost of funds invested in equipment: $7,000 Gomez could have invested the funds in another asset that could earn him $7,000 Opportunity cost of working as a potter in his own shop: $20,000 Gomez could have worked as a potter for a competitor that could earn him $20,000. This is the worth of Gomez's skill as a potter. Entrepreneurial talent: $4,000 This is the worth of Gomez's talent in running the business. These costs do not require an outlay of cash. These are the implicit costs. Now, we are ready to calculate both the accounting and economic profit of Gomez. a. Calculate the accounting profit for Gomez's pottery firm. $_ Accounting profit = Total Revenue − Total Explicit Costs Accounting profit = $ 85 , 000 − ( $ 18 , 000 + $ 8 , 000 + $ 24 , 000 ) Accounting profit = $ 85 , 000 − $ 50 , 000 Accounting profit = $ 35 , 000 The accounting profit is equal to $35,000. b. Now calculate Gomez's economic profit. $_ Economic profit = Total Revenue − Total Explicit and Implicit Costs Economic profit = $ 85 , 000 − ( $ 18 , 000 + $ 8 , 000 + $ 24 , 000 + $ 7 , 000 + $ 20 , 000 + $ 4 , 000 ) Economic profit = $ 85 , 000 − $ 81 , 000 Economic profit = $ 4 , 000 The economic profit is equal to $4,000.

8 0
3 years ago
People in the engineering, marketing, and operations departments were angry at each other, and to stop the finger-pointing, the
Licemer1 [7]

Answer:

The correct word for the blank space is: human.

Explanation:

Human or interpersonal skills are those abilities people have that let them interact with others effectively. Human skills are a must-need capability managers should develop at the moment of resolving conflicts within their organizations and dealing with employees in the day by day firm's operations.

4 0
3 years ago
The records of Pippins, Inc., included the following information: Net sales $ 1,000,000 Gross margin 475,000 Interest expense 50
Lelu [443]

Answer:

Times interest earned (TIE) = 7.4 times

Explanation:

The times interest earned (TIE) ratio is a measure used to analyze the company's ability to meet its debt obligations on the basis of its current income level. The TIE ratio is calculated as follows,

Times Interest Earned (TIE)  =  EBIT / Total Interest expense

Where,

  • EBIT is the earnings of the company before interest and tax

To calculate TIE, we first need to determine the EBIT. EBIT can be calculated by backward working. Thus, EBIT is:

EBIT = Net income + tax + interest expense

EBIT = 240000 + 80000 + 50000

EBIT = $370000

Times interest earned (TIE) = 370000 / 50000

Times interest earned (TIE) = 7.4 times

6 0
3 years ago
Derived demand is demand: Group of answer choices
Aleks [24]

Answer:

C) linked to the production and sale of some other item.

Explanation:

• Derived demand is an economic term describing the demand for a good/service resulting from the demand for an intermediate or related good/service.

• Derived demand is solely related to the demand placed on a good or service for its ability to acquire or produce another good or service.

• The principles behind derived demand work in both directions; if the demand for a good decrease, the demand for the goods required to produce the item will also decrease.

5 0
3 years ago
Suppose Kendall's had cost of goods sold during the year of $ 260 comma 000. Beginning merchandise inventory was $ 20 comma 000​
kiruha [24]

Answer:

Inventory turnover = 9.45

Explanation:

Inventory turnover is defined as the ratio between Cost of good sold and average inventory.

Average inventory is defined as follows, where BI = Beginning merchandise inventory and EI = Ending merchandise inventory:

Average Inventory = \frac{BI + EI}{2}

Average Inventory=\frac{20000+35000}{2}=27500

then:

Turnover = \frac{260000}{27500} \\Turnover = 9.45

6 0
2 years ago
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