Answer:
The best transfer price to avoid transfer price problems is $2,310
Explanation:
Transfer Price = Variable cost + Fixed Fee
Variable Cost = Direct Material + Direct labor + Variable Overhead
= 600 + 1,200 + 300
= 2,100
Transfer Price = Variable cost + Fixed Fee
= 2,100 + 210
= $2,310
Therefore, The best transfer price to avoid transfer price problems is $2,310
Answer:
a.the price level is higher than expected making production more profitable.
Explanation:
The sticky wages shows that the output increases if the price level is higher because an increase in price level increases the profitability and the increased profitability increases output.
Answer:
Estimated as Elastic Demand
Explanation:
Elastic demand is where a change in price causes a significant change in demand, therefore 20 hats to 15 hats can be considered significant and we can conclude that it's elastic demand.
Answer:
The Weighted Average cost of capital measures the cost to the company of its current capital structure by using the weights of the various capital measures. WACC usually uses market values so;
Total amount = Debt + Preferred stock + common equity
= 100 million + 20 million + ( 50 * 6 million)
= $420 million
<u>Proportions.</u>
Debt
= 100/420
= 24%
Preferred Stock<u> </u>
= 20/420
= 5%
Common Equity
= 300/420
= 71%
Answer:
$332,000
Explanation:
<u>Cash flow from operating activities</u>
Net Income $252,000
Adjust for changes in working capital items :
Decrease in Accounts Receivable ($80,000 - $70,000 $80,000
Net Cash Provided by Operating Activities $332,000
Conclusion
the cash flows from operating activities to be reported on the statement of cash flows is $332,000
