1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
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)                                                  

You might be interested in
After saving money in her piggy bank for three years, Beverly decided to deposit $5,000 of the money in the Millertown Bank. If
Nitella [24]

$20,000 is correct

When they ask for the amount the bank can "create" they are really asking for the <u>change in the money supply</u><u>.</u> They are required to reserve 20%, so they can loan out 80%

80% * $5,000= $4,000

Now, the bank can use this $4,000 by loaning it out to other customers and earning interest on those loans. The customers can use the money for investments or spending. So the first little deposit of $5,000 has now spread to a lot more people and created a lot more opportunity for growth. This is known as the <u>multiplier effect.</u> To put the multiplier effect in dollar amounts, we need to know how much we are multiplying by. This is called the <u>deposit multiplyer</u> and the formula is 1/(required reserve ratio). The reserve ratio here is 20% or .2

1/(.2)= 5

Our deposit multiplier which will calculate the multiplier effect on the money supply (aka the amount the bank can "create") is 5

5* $4,000= $20,000

7 0
3 years ago
Suppose a company wants to structure its assets and liabilities such that its equity is unaffected by interest rate risk. To acc
Andreas93 [3]

Answer: b. The duration of its liabilities must equal the duration of its assets

Explanation:

Since the company wants to structure its assets and liabilities such that its equity is unaffected by interest rate risk, then the duration of its liabilities must equal the duration of its assets.

It should be noted that when the duration of its liabilities is shorter than the duration of its assets, the duration gap is positive and when there's a rise in interest rate, the worth of assets will be affected more.

When duration of its liabilities is longer than the duration of its assets, the duration gap is negative and when there's a rise in interest rate, the worth of liabilities will be affected more.

Finally, when the duration of its liabilities is equal the duration of its assets, its equity is unaffected by interest rate risk.

7 0
2 years ago
Joe is an accountant and plans to join a group of accountants. he compares a group in a general partnership with a group in a li
Artyom0805 [142]
An organization in which all accomplices are constrained accomplices is a limited liability partnership(LLP). It along these lines shows components of associations and companies. In a LLP, one accomplice is not dependable or obligated for another accomplice's offense or carelessness. Joe would not be subject if another accomplice were to commit an error. The answer is the 4th one. 
6 0
3 years ago
Read 2 more answers
A person may have very strong ethics in the way he or she treats family and friends, but not understand how failure to submit ta
Arturiano [62]

Answer: (D) Application of ethics to business situations

Explanation:

 The applications of the business ethics is one of the form of professional ethics in an organization that helps in examine the overall ethical principle and also the moral problems in the environment.

It also helps in governing the actions during the decision making process and also manage the behavior of the person in an organization.

It is also refers to the unwritten principle and the values in an organization that helps managing the company. According to the given question, the application of the business ethics situation is basically encountered by the ethical maturity model.  

Therefore, Option (D) is correct answer.

6 0
3 years ago
Assume that the farmer and the rancher can switch between producing pork and producing tomatoes at a constant rate. Assume that
dusya [7]

Answer:

C) 6 pounds of pork and 8 pounds of tomatoes

Explanation:

Explanation:

            Labor hours to make 1 lb. of:          lbs. produced in 24 hours

                 Pork                  Tomatoes              Pork            Tomatoes

Farmer         6                            3                       4                       8

Rancher       4                            4                       6                       6

If both decide to specialize in producing only one good, the farmer will produce 8 pounds of tomatoes per day and the rancher will produce 6 pounds of pork per day.

This way when the rancher trades 4 pounds of pork in exchange for 6 pounds of tomatoes, he is gaining 2 pounds of pork which is equivalent to 8 labor hours.

When the rancher trades 6 pounds of tomatoes in exchange for 4 pounds of pork, he is gaining 2 pounds of tomatoes which is equivalent to 6 labor hours.

3 0
3 years ago
Other questions:
  • Yachts are produced by a perfectly competitive industry in Dystopia. Industry output​ (Q) is currently​ 30,000 yachts per year.
    8·1 answer
  • Steady As She Goes Inc. will pay a year-end dividend of $3.40 per share. Investors expect the dividend to grow at a rate of 5% i
    13·1 answer
  • If the month-end bank statement shows a balance of $54,000, outstanding checks are $15,000, a deposit of $6,000 was in transit a
    12·1 answer
  • Nell and Kirby are in the process of negotiating their divorce agreement. What should be the tax consequences to Nell and Kirby
    13·1 answer
  • Select all that apply. Which of the following items demonstrate poor choices made by private property owners?
    15·2 answers
  • Item 5Item 5 Internationally, legislators and professional bodies have focused on corporate governance issues in making recommen
    14·1 answer
  • Which of the following is NOT counted in the unemployment rate?
    9·2 answers
  • Examples of popular persuasive ads
    12·1 answer
  • Factors of production examples ​
    9·2 answers
  • FACTS: Your second client is a 42-year-old man. He graduated high school and then immediately started working for a lumberyard i
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!