1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
madam [21]
3 years ago
8

Fabri Corporation is considering eliminating a department that has an annual contribution margin of $35,000 and $70,000 in annua

l fixed costs. Of the fixed costs, $25,000 cannot be avoided. The annual financial advantage (disadvantage) for the company of eliminating this department would be: A. $10,000 B. $(10,000) C. $35,000 D. $(35,000)
Business
1 answer:
aleksandrvk [35]3 years ago
3 0

Answer:

Fabri Corporation is considering eliminating a department that has an annual contribution margin of $35,000 and $70,000 in annual fixed costs. Of the fixed costs, $25,000 cannot be avoided.

The annual financial advantage for Fabri Corporation of eliminating this department would be:

A. $10,000

Explanation:

Annual Contribution margin =                                         $35,000

Annual departmental fixed costs = $70,000

Annual unavoidable fixed costs = $25,000

Therefore, the avoidable fixed cost (70,000 -25,000) = 45,000

Loss incurred by not eliminating the department =      ($10,000)

b) Fabri Corporation will avoid incurring the loss amounting to $10,000 by eliminating the department.  This implies that it will have some financial advantage by stopping the erosion of its profit margin from other departments.

You might be interested in
Why is it important to site? Name at least three reasons
Lapatulllka [165]

Answer:

It gives proper credit to the author, it helps you avoid plagiarism, and it helps to create more ideas in your mind.

8 0
3 years ago
Read 2 more answers
Goods in process inventory account of a manufacturing company that uses an overhead rate based on the direct labor cost has a 4,
mafiozo [28]

Answer:

Overhead absorption rate

= Overhead absorbed/Actual labour cost x 100

= $4,400/$800  x 100

= 550% of direct labour cost

Explanation:

Since the overhead absorbed is $4,400, there is need to divide the overhead absorbed by actual direct labour cost multiplied by 100. This gives the overhead application rate.

7 0
3 years ago
EB8.
Stolb23 [73]

Answer:

The fixed costs per unit when 20,000 units are produced are $6.05 per unit.

Explanation:

Fixed costs per unit can be determined by using the following formula:

Fixed costs per unit = Total fixed costs/ number of units are produced

In a company, Total fixed costs do not depend on the level of activity (Fixed costs do not change).

In the company, Total fixed cost = $11 x 11,000 = $121,000

When 20,000 units are produced, Fixed costs per unit = $121,000/20,000 = $6.05 per unit.

3 0
3 years ago
Carow Corporation purchased on January 1, 2020, as a held-to-maturity investment, $60,000 of the 8%, 5-year bonds of Harrison, I
tigry1 [53]

Answer:

Entries are given below

Explanation:

Requirement A.

On January 1, 2020 Carrow purchased held to maturity investment, $60,000 of the 8% 5year bonds of Harrison, Inc for $65,118

Entry                                                DEBIT   CREDIT

Held-to-maturity securities            $65,118

cash                                                                $65,118

Requirement B.

The receipt of semiannual interest and premium amortization

Entry                                                DEBIT   CREDIT

cash (60,000 x 8% x 6/12)             $2,400  

held to maturity sercurities                            $446

interest revenue(65,118 x.6% x6/12)             $1,954

6 0
3 years ago
Six months before filing for bankruptcy, shirley sold her new car to her brother, claude, for $100 so that her creditors could n
Ket [755]
<span>In this case, the transfer could be considered voidable by the trustees. This is because Shirley did not receive the fair value for the car, but simply received a negligible amount as a way of trying to defraud her creditors. In this case, the transfer could be voided.</span>
7 0
3 years ago
Other questions:
  • What is debt funding?
    11·1 answer
  • Assume that the required reserve ratio is 5 percent. If a commercial bank has $2 million cash in its vault, $1 million in govern
    12·1 answer
  • Below is selected financial information for Panettone, Inc. Balance Sheet ($ in Millions) Income Statement ($ in Millions) Asset
    13·1 answer
  • I need help on Personal Finance.
    14·1 answer
  • Suppose that the MC Software Corporation earns a profit of $10 per share. If the prevailing interest rate is 12 percent and the
    5·1 answer
  • In the current year, Norris, an individual, has $59,000 of ordinary income, a net short-term Capital loss (NSTCL) of $9,100 and
    15·1 answer
  • The net cost to society from the imposition of a tax is also known as:
    13·1 answer
  • Why is it important to start saving for retirement early?
    10·2 answers
  • n e-mails, it is okay to send messages that are _____. a. Aggressive and mean-spirited in nature b. Filled with text abbreviatio
    13·1 answer
  • If you were running a marathon which type of muscle fibers.
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!