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harkovskaia [24]
3 years ago
6

Fixed vs variable cost preference. bates operates a kiosk at a local mall, selling duck calls for $30 each. the variable cost to

make a duck call is $18. a new mall is opening where bates wants to locate a new kiosk. the mall operator offers the following two options for bates: 1. paying a fixed rent of $15,000 a month, or: 2. paying a fixed rent of $9,000 per month plus 10% of revenue earned from each duck call, the amount of monthly sales (in units) at which bates would be indifferent as to which plan to select is: a) 1,900 b) 2,000 c) 1,500 d) 1,600​
Business
1 answer:
DochEvi [55]3 years ago
8 0

Answer:

b) 2,000

Explanation:

sales price = $30

10% from each sale = $3

the amount of rent paid as a percentage of sales = $15,000 - $9,000 = $6,000

the indifference point in units = $6,000 / 10% revenue margin = $6,000 / $3 = 2,000 units

If Bates sells less than 2,000 units, then he should prefer option 2, but if he sells more than 2,000 units, then option 1 is better for him.

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Imperial Jewelers manufactures and sells a gold bracelet for $403.00. The company’s accounting system says that the unit product
AysviL [449]

Answer:

a) Financial advantage   <u> $2,208 </u>

b) The company should accept the special order, as it will increase its profit by $2,208

Explanation:

<em>The relevant costs for decision to accept the special order are  </em>

<em>I Incremental Revenue from the special order  </em>

<em>2. incremental variable cost </em>

<em>3. The cost of the special tool</em>

Unit variable cost = 143 + 90 + 8 + 7 = $240

<em>Note that that the increase in material cost of $8 and the variable manufacturing overhead of $7 are relevant to the special order decision. Hence they are added.</em>

<em>And the balance of manufacturing overhead would be incurred either way. Therefore , they are not relevant for the decision</em>

                                                                                                       $

Sales revenue from special order

(22× $361.00)                                                                               7942

Variable cost of special order

(22× $240 )                                                                                    (5280 )

Cost of special tool                                                                      <u> (454)</u>

Financial advantage                                                                    <u> 2,208 </u>

The company should accept the special order, as it will increase its profit by $2,208

3 0
2 years ago
What does the size of the dividend per share of stock depend on?
defon

Answer:

The size of the dividend per share of stock depends on: The corporation's profit

Dividend per share is calculated by: Total dividend / Total shares outstanding,

Which means that dividend per share will increase if the total dividend increases.

Meanwhile, the total dividend will be increased if the company gains more profit

4 0
3 years ago
Read 2 more answers
What tends to cause structural unemployment?<br> Economics
Yuri [45]

Answer:

Structural unemployment occurs because workers lack the requisite job skills or live too far from regions where jobs are available and cannot move closer. Jobs are available, but there is a serious mismatch between what companies need and what workers can offer.

Explanation:

4 0
3 years ago
You are evaluating the balance sheet for PattyCake’s Corporation. From the balance sheet you find the following balances:
goldenfox [79]

Answer:

Explanation:

Current Assets are those asset which will be liquidated within next one year.

cash and marketable securities        $360,000

accounts receivable                           $1,280,000

inventory                                             <u>$2,180,000</u>

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Current Liabilities are those which is payable within next one year.

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Total Current Liabilities                       <u>$2,060,000</u>

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5 0
3 years ago
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Vadim26 [7]

Answer:

Sole proprietorship

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6 0
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