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3 years ago

Higher fixed costs are associated with:_____.

Business

1 answer:

VladimirAG [237]3 years ago

6 0

Answer:

a. 1 and 3.

Explanation:

Given that the operating leverage of a business firm is a sum of its fixed cost and variable cost about the way the firm's cost of business is attributed.

In this case, when a business firm has a high fixed cost, it normally requires a high number of sales to earn more profits. This is termed as "higher operating leverage." This thereby leads such business firms to have "increased risk."

Hence, It is practically correct that in business operation that when a business firm has Higher fixed costs it is associated with "higher operating leverage and increased risk"

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Fleming Company has the following cumulative taxable temporary differences: 12/31/18 12/31/17 $1,600,000 $2,250,000 The tax rate

jeyben [28]

Answer:

Pretax financial income is $3,350,000.00

Explanation:

Fleming's pretax financial income is the taxable income for 2018 plus the increase in cumulative taxable temporary difference in 2018.

Taxable income is $4,000,000

Difference in cumulative taxable difference=$1,600,000-$2,250,000

=-$650,000

pretax financial income=$4,000,000+(-$650,000)

=$4,000,000-$650,000

=$ 3,350,000.00

The pretax financial income for year 2018 is $3,350,000.00

7 0

4 years ago

Which is a primary activity in Porter’s value chain model?

Alexus [3.1K]

Answer:

D. outbound logistics

Explanation:

The rest are secondary activity in Porter's value chain model.

4 0

3 years ago

Two firms, A and B, both produce widgets. The price of widgets is $1 each. Firm A has total fixed costs of $500,000 and variable

Dmitry_Shevchenko [17]

Answer:

A) 11

Explanation:

The degree of operating leverage measures change in earning before interest and tax (EBIT) to change in sales.

Solution:

Formula

DOL = Percentage change in EBIT / Percentage change in sales

Percentage Change in EBIT = EBIT(1) / EBIT(2) - 1

Percentage Change in Sales = Sales(1) / Sales(2) - 1

<em>Strong economic Condition</em>

Sales = $1 Price x 1,200,000 units = $1,200,000

Variable Cost (VC) = $0.5 variable cost x 1,200,000 units = $600,000

Fixed cost (FC) = $500,000

EBIT = Sales - VC - FC

EBIT = $1,200,000 - $600,000 - $500,000

EBIT = $100,000

<em>Weak economic Condition</em>

Sales = $1 Price x 1,100,000 units = $1,100,000

Variable Cost (VC) = $0.5 variable cost x 1,100,000 units = $550,000

Fixed cost (FC) = $500,000

EBIT = Sales - VC - FC

EBIT = $1,100,000 - $550,000 - $500,000

EBIT = $50,000

Solving for DOL:

Percentage Change in EBIT = $100,000/50,000 - 1

Percentage Change in EBIT = 100%

Percentage Change in Sales = $1,200,000/1,100,000 - 1

Percentage Change in Sales = 9.09%

Now, using the above mentioned formula we can calculate DOL:

DOL = 100% / 9.09% - 1 = 11x

4 0

3 years ago

Gold standard required countries to A. keep the supply of foreign exchange less than their domestic money supply. B. restrict th

vladimir1956 [14]

Answer:

D.) Keep the supply of there domestic money fixed in proportion to their gold holdings.

Explanation:

The Gold Standard was a monetary system under which countries fixed the value of their money in terms of a specified amount of gold. With the gold standard, countries agreed to convert the paper money into a fixed amount of gold.

Hope this helps you out! : )

4 0

3 years ago

Virginia owns 100% of Goshawk Company. In the current year, Goshawk Company sells a capital asset (held for three years) at a lo

kumpel [21]

Answer:

a) If Goshawk is a proprietorship, only $21000 long-term capital loss can be deducted in the current year. The remaining $19000 net capital loss is carried forward and then carried back

b) If Goshawk is a C corporation, only $ 18000 long-term capital loss can be deducted in the current year. The remaining $22000 net capital loss is carried back and then forward of Item 2.

Explanation:

The gain or loss on the sale of a property is said to be the difference between between the realized value of goods and its adjusted basis. When there is a gain the realized value would be greater than the adjusted basis, while when there's loss the realized value would be less than the adjusted basis.

A) In this case, if Goshawk is a proprietorship, only $21,000 of the $40,000 long-term capital loss can be deducted in the current year. The loss will offset the short-term capital gain of $18,000 first; then, an additional $3,000 of the loss may be utilized as a deduction against ordinary income. The remaining $19,000 net capital loss is carried forward to next year and years thereafter until completely deducted. The capital loss carryover retains its character as long term.

B) If Goshawk is a C corporation, $18,000 short term capital gain can be set off for long term capital loss. Then the remaining $22,000($40,000 - $18,000) will be carried backwards

3 0

3 years ago