Answer:
c. Utilities expense is a mixed cost and rent expense is a fixed cost.
Explanation:
Seacrest Enterprises
1000 units 5000 Units
Total Cost Total Cost /Unit Total Cost Total Cost/Unit
Direct materials $5,000 $5.00 $25,000 $5.00
Utilities expense $1,000 $1.0 0 $3,750 $0.75
Rent expense $4,000 $4.00 $4,000 $0.80
Direct Materials show variable Costs
Utilities expense show mixed costs
Rent Expense show fixed costs
The correct answer is
c. Utilities expense is a mixed cost and rent expense is a fixed cost.
The appropriate labels for Curves N and M in the nearby graph is that the Curve N is total cost and Curve M is total variable cost.
<h3>Why is the curve as stated about?</h3>
Because a fixed cost is constant, this is not shown on the graph, however, the movement of the variable cost impacts directly on the total cost as well but it will be higher.
Hence, the appropriate labels for Curves N and M in the nearby graph is that the Curve N is total cost and Curve M is total variable cost.
Therefore, the Option C is correct.
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Answer:
New price (P1) = $72.88
Explanation:
Given:
Risk-free rate of interest (Rf) = 5%
Expected rate of market return (Rm) = 17%
Old price (P0) = $64
Dividend (D) = $2
Beta (β) = 1.0
New price (P1) = ?
Computation of expected rate on return:
Expected rate on return (r) = Rf + β(Rm - Rf)
Expected rate on return (r) = 5% + 1.0(17% - 5%)
Expected rate on return (r) = 5% + 1.0(12%)
Expected rate on return (r) = 5% + 12%
Expected rate on return (r) = 17%
Computation:
Expected rate on return (r) = (D + P1 - P0) / P0
17% = ($2 + P1 - $64) / $64
0.17 = (2 + P1 - $64) / $64
10.88 = P1 - $62
New price (P1) = $72.88
