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den301095 [7]
2 years ago
5

The management of Bonga Corporation is considering dropping product D74F. Data from the company's accounting system for this pro

duct for last year appear below: Sales $ 942,000 Variable expenses $ 415,000 Fixed manufacturing expenses $ 356,000 Fixed selling and administrative expenses $ 263,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $217,000 of the fixed manufacturing expenses and $128,000 of the fixed selling and administrative expenses are avoidable if product D74F is discontinued. What would be the financial advantage (disadvantage) from dropping product D74F
Business
1 answer:
xenn [34]2 years ago
5 0

Answer:

Financial disadvantage from dropping = $(182,000)

Explanation:

<em>A product should be shut down if doing so would make the savings in fixed costs associated with the product to exceed the lost contribution. Other wise , the product should remain.</em>

In a shut down decision , the following relevant cash flows should be considered:

1. Lost contribution from the product to be shut down

2. Savings in fixed directly attributable to the product under consideration.

So, we will apply these principles as follows:

Lost contribution from the product to be shut down:

(942,000-415,000)                                                                 (527,000)

Savings from fixed direct fixed cost:

(217,000+128,000)                                                                 <u>  345,000</u>

Net loss contribution                                                            <u>  (182,000)   </u>    

Financial disadvantage from dropping = $(182,000)                                                  

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gayaneshka [121]

Answer:

A. - The net public debt decreases

The net public debt decreases because the government has obtained more funds in tax revenue. For this reason, the government will likely run a budget surplus.

B. - The net public debt increases

The government was already running a budget deficit (albeit a small one). With the effects of the hurricane, the government will have to spend more to help the people affected, and will likely have to borrow even more, increasing its deficit.

C. - The net public debt remains unchanged

There was a transfer of funds from one government agency to the other, and the net effect of such transfer is likely to be very small to make any significant change in the net public debt. The net public debt remains unchanged.

4 0
3 years ago
What type of international risk exposure measures the change in present value of a firm resulting from changes in future operati
Alex787 [66]

Answer:

operating exposure

Explanation:

Based on the scenario being described within the question it can be said that the term being mentioned is known as operating exposure and deals with the company's operations over various months or years and the changes incurred due to unexpected changes in the exchange rate. The exchange rate is the price at which one currency is traded for another. Drastic changes in these rates can cause assets value to decline drastically.

4 0
3 years ago
You are writing the financial analysis for a snowboarding apparel business you are hoping to open in Topeka. Which tips should y
Lubov Fominskaja [6]

Answer: c. Outline a realistic start-up budget.

d. Present an operating budget that projects costs.

Explanation:

If one is writing the financial analysis for a snowboarding apparel business that one is hoping to open in Topeka, tye tios to follow include outlining a realistic start-up budget and presenting an operating budget that projects costs.

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Catherine is starting her own catering company. So far she has researched
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A. She needs to acquire funding for her business.

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3 years ago
Hex Industries reports the following information for May: Sales $ 990,000 Fixed cost of goods sold 118,000 Variable cost of good
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The gross profit of Hex Industries for May under absorption costing is $604,000.

<h3>What is absorption costing?</h3>

Under absorption costing, the total or full costs of manufacturing or (variable and fixed) cost of goods sold are included when determining the gross profit.

<h3>Data and Calculations:</h3>

Sales $ 990,000

Variable cost of goods sold 268,000

Fixed cost of goods sold 118,000

Total cost of goods sold = $386,000

Gross profit = $604,000 ($990,000 - $386,000)

Fixed selling and administrative costs 118,000

Variable selling and administrative costs 143,000

Total period costs = $261,000 ($118,000 + $143,000)

Net income = $343,000 ($604,000 - $261,000)

Thus, the gross profit of Hex Industries for May under the absorption costing method is $604,000.

Learn more about the absorption costing method at brainly.com/question/14609187

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4 0
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