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Answer:
d. Income would increase by $40,000
Explanation:
Calculation to determine what the acceptance of the special order would affect net the income
Net income=(Additional unit price*Additional units)-(Variable cost *Additional units
Let plug in the formula
Net income = ($140× 1,000)-($100×1,000)
Net income= $140,000-$100,000
Net income=$40,000 Increase
Therefore If the company has sufficient capacity to produce the additional units, acceptance of the special order would affect net income as follows Income would increase by $40,000
Answer:
a. Compute the ratio of times-interest-earned.
times-interest-earned = EBIT / interest expense
- EBIT = $4,839,900
- interest expense = $2,210,000
times-interest-earned = $4,839,900 / $2,210,000 = 2.19
b. Compute the debt-to-equity ratio.
debt-to-equity ratio = total liabilities / total stockholders' equity
- total liabilities = $900,000
- total stockholders' equity = $400,000
debt-to-equity ratio = $900,000 / $400,000 = 2.25
Preliminary calculations:3 units of A at $ 55.00 each - $ 165.004 units of B at $ 30.50 each - $ 122.001 unit of C at $ 32.00 each - $ 32.00Selling price of a composite unit - $ 319.00
Contribution margin of A ($ 165.00 x 30%) - $ 49.50Contribution margin of B ($ 122.00 x 25%) - $ 30.50Contribution margin of C ($ 40 x 50%) - $ 20.00Contribution margin of composite unit - $ 100.00
(a) Break-even point in composite units = $ 67,200 / $ 100 = 672 composite unitsBreak-even point in sales dollars = 672 x $ 319 = $ 214,368.00
(b) At break-even point,672 x 3 = 2,016 units of A672 x 4 = 2,688 units of B672 x 1 = 672 units of C
Answer:
D) To gain access to low-cost inputs of production
Explanation:
Since Gazprom is the world's largest natural gas producer, its operation costs must be relatively low due to economies of scale. Since Exxon Mobile is setting a new plant in Azerbaijan, it will need a large supply of natural gas and the cheaper it is, the better. In this case, Gaxprom provides the raw material and Exxon Mobile processes the materials.
