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Digiron [165]
3 years ago
10

Assuming the Fashion line is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the Fashio

n line is used to increase the production of Hiking boots by 250%, how will operating income be affected
Business
1 answer:
horrorfan [7]3 years ago
7 0

Answer:

A) Increase $137,500

Explanation:

Calculation for how will operating income be affected

CHANGE IN OPERATING INCOME

Sales Revenue (Additional) $850,000

(250 %* 340,000)

Less Variable expenses (Additional) ($587,500)

(250 % *$ 235,000)

Contribution Margin $ 262,500

($850,000-$587,500)

Less Fixed Expenses ($76,000)

($262,500-$76,000)

Operating Income $ 186,500

( $ 262,500-$76,000)

Less Previous Operating Income ($49,000)

Operating Income $137,500 Increase

($ 186,500-$49,000)

Therefore the operating income will increase by $137,500

You might be interested in
under the securties act of 1933, which statements are true regarding a regulation D private placement exemption? adveristing per
Keith_Richards [23]

Answer:

advertising is not permitted

Commissions can be received in connection with the offering.

Explanation:

Under the securities act of 1993, a regulation D private placements have some rules which included: advertising was not permitted and Commissions can be received in connection with the offering. These were only a few rules as Regulation D allows a "private placement" exemption if an issue is sold to a maximum of 35 "non-accredited" investors.

7 0
3 years ago
Your grandfather wants to establish a scholarship in his father’s name at a local university and has stipulated that you will ad
Paul [167]

Answer:

the answer for the first question is $166667.

the answer for the second question is $210526

the answer for the third question is An inverse.

Explanation:

given information that i will invest in a $10000 scholarship that will pay forever.

the interest rate charged is 6.00% per annum therefore this is a perpetuity present value problem where there is streams of income forever therefore we use the formula :

Pv of perpetuity= Cf/r

where Cr is the cash flows payed by the single investment forever in this case $10000 then r is the interest rate of the investment amount which is 6% in this case.

Pv of Perpetuity= $10000/6%

                           =$166667 therefore i must invest this amount to get the scholarship running with streams of $10000 forever.

in the second problem if now the interest rate is changed from 6% to 4.75% then the amount to be invested would be :

Pv of perpetuity = $10000/4.75%

                              =$210526 therefore this is the amount to be invested for a forever $10000 stream of incomes for a scholarship.

the relationship is indirect cause as the interest rate decreases the present value of the perpetuity that must be invested increases.

3 0
3 years ago
How hospital capacity considerations differ from a factory.
sleet_krkn [62]

Answer:

One of the differences between hospital and factory capacity is that a hospital can add capacity easily by adding more staff and beds. A factory is usually technologically limited and therefore must plan well in advance to add capacity.

Explanation:

3 0
2 years ago
As the burden of taxes grows, the role of the auditor becomes increasingly important to the organization. True or false
Mila [183]

Answer:

False

Explanation:

In the case when the tax burden increased so the role of the auditor is to audit the financial statements of the company and based on this they given the opinion that could be either favorable or unfavorable also they look into the operational effectiveness and efficiency but the role of the auditor is not increasingly important as for the tax purpose the tax accountant should be considered such as Chartered accountant, etc

8 0
3 years ago
Suppose that last year the equilibrium price and the quantity of good X were $10 and 5 million pounds, respectively. Because of
grandymaker [24]

Answer:

Explanation:

Last year the equilibrium price and the quantity of good X were $10 and 5 million pounds, respectively.

The producer surplus is the difference between the minimum price that a producer is willing to accept and the price it actually gets. It can be found by calculating the area between the supply curve and the market price.

The producer surplus

= \frac{1}{2}\ \times\ base\ \times\ height

= \frac{1}{2}\ \times\ quantity\ \times\ price

= \frac{1}{2}\ \times\ 5\ \times\ 10

= $25

Because of strong demand this year, the equilibrium price and the quantity of good X are $12 and 7 million pounds, respectively.

The producer surplus

= \frac{1}{2}\ \times\ base\ \times\ height

= \frac{1}{2}\ \times\ quantity\ \times\ price

= \frac{1}{2}\ \times\ 7\ \times\ 12

= $42

5 0
3 years ago
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