Answer:
$140,000 and $195,000
Explanation:
The computations are shown below:
Accounting cost would be
= Jill salary + material and other labor costs + Insurance and mortgage payment
= $40,000 + $80,000 + $20,000
= $140,000
The economic cost would be
= Accounting cost + investment left + loss in salary + loss in rent
= $140,000 + $5,000 + $30,000 + $20,000
= $195,000
The loss in salary would be
= $70,000 - $40,000
= $30,000
The loss in rent would be
= $40,000 - $20,000
= $20,000
Answer:
6,250 units to break even.
Explanation:
Let's call x the number of units needed.
We know the sales price ($200/unit).
We know the cost of production ($120/unit)
And to break even, the Abner Corporation need to cover their fixed costs of $500,000.
That can be modeled like this:
200x - 120x = 500000 (sales price - cost price to get 500K)
we simplify and solve:
80x = 500000 (making $80 profit for each unit)
x = 6,250 units
Abner Corp needs to sell at 6,250 units to break even.
Since it is selling 7,500 units, they are making a profid.
Answer:The answer is $95,000 Loss
Explanation:
Income statement
$
Sales. 450,000
Less:variable cost.
Manufacturing expenses 128,000
Sales commission. 54,000
Shipping. 15,000
---------------- 197,000
-----------------
Contribution. 253,000
Less Fixed Overhead
Advertising. 23,000
Depreciation. 112,000
General factory overhead 49,000
Salary of production line manager 118,000
Insurance on inventories. 6,000
Purchasing department. 40,000
-----------------
348,000
-----------------
Profit/Loss. ( 95,000) Loss
--------------------------
Based on the income statement that showed a loss of $95,000 or decrease in operating income, Yes I would recommend that bilge pump product be discontinued.
