Answer:
Operating income increases by $40,000.
Explanation:
Given that,
Total fixed costs = $840,000
Sale price per unit = $60
Variable cost per unit = $30
Additional amount spend on advertising = $35,000
Sales volume would increase by 2,500 units.
Contribution margin:
= Sales - Variable costs
= $60 - $30
= $30 per unit
Increase in operating income:
= Increase in contribution margin - Increase in Fixed costs
= ($30 × 2,500 units) - $35,000
= $75,000 - $35,000
= $40,000
Answer:
Bonita’s break-even point in units for 2020 is 812.50 units.
Explanation:
Break-even point in units refers to the number of units of commodity that must sold by a company in order for its cost to be equal to revenue and therefore make no profit but also no loss. This can be determined for Bonita Industries as follows:
Selling price in 2020 = Selling price in 2019 * (100% - Percentage cut in selling price) = $1,000 * (100% - 40%) = $1,000 * 96% = $960
Variable expenses = $700
Fixed expenses = $780,000
Contribution per unit = Selling price in 2020 - Variable expenses = $960 - $700 = $260
Bonita’s break-even point in units for 2020 = Fixed expenses / Contribution per unit = $780,000 / $960 = 812.50 units
Therefore, Bonita’s break-even point in units for 2020 is 812.50 units.
Answer:
D. $ 367.500
Explanation:
We have to first compute the total direct labor cost. This is done by multiplying the estimated direct labor hours with the hourly rate.
Total Direct Labour costs $ 17.50 per hour * 15,000 hours = $ 262,500
Estimated manufacturing overhead per the data in the question is 140 % of Direct labor cost,
Estimated manufacturing overhead is $ 262,500 * 140 % = $ 367,500
Answer:
$9,760.48
Explanation:
Present value of annuity due = P* [[1 - (1+r)^-(n-1)] / r] + P. Where P = Periodic payment = $1,000, r = Rate of interest per period 4% (0.48/12), n = number of payments 12 (12*1)
Present value of annuity = $1000 * [[1 - (1 + 0.04)^-(12-1)] / 0.04] + $1000
Present value of annuity = $1000*8.760475 + $1000
Present value of annuity = $8760.48 + $1000
Present value of annuity = $9,760.48
Answer:
encompasses allocating indirect costs to a cost object
Explanation:
Cost assignment -
It refers to the distribution of the cost in various objects and activities which initiate the proper bifurcation of the costs , is referred to as cost assignment .
The method is used in the activity - based costing .
It is also known as cost allocation .
All the direct and indirect cost are allotted with the help of cost assignment .
Hence , from the given information of the question ,
The correct answer is -
encompasses allocating indirect costs to a cost object .
