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nadezda [96]
2 years ago
7

benjamin company has the following results of operations for the pat tyear. A foreign company (whose sales will not affect Benja

min's market) offers to buy 4,500 units at $8.05 per unit. In addition to variable manufacturing costs, selling these units would increase fixed overhead by $650 and selling and administrative costs by $350. assuming benjamen has excess capacitty and Benjamin accepts the offr, its profits will:
Business
1 answer:
maks197457 [2]2 years ago
5 0

Answer:

Increase by $5,975

Explanation:

Calculation to determine the profit

First step is to calculate the Direct Material and Direct labor per unit

Direct Material and Direct labor per unit=$100,000/16,000

Direct Material and Direct labor per unit=$6.25

Second step is to calculate the Relevant Variable Overhead

Relevant Variable Overhead = 20,000 * 20%

Relevant Variable Overhead= $4,000

Third step is to calculate the

Relevant Variable Cost per unit = $4,000 / 16,000

Relevant Variable Cost per unit= $0.25

Fourth step is to calculate the Total Relevant Variable cost per unit

Total Relevant Variable cost per unit = $6.25 + $0.25

Total Relevant Variable cost per unit= $6.5

Fifth step is to calculate the Relevant Contribution Margin per unit

Relevant Contribution Margin per unit = $8.05 - $6.5

Relevant Contribution Margin per unit= $1.55

Sixth step is to calculate the Total Contribution

Total Contribution = 4,500 * $1.55

Total Contribution= $6,975

Now let calculate the profit using this formula

Profit = Contribution - Fixed Cost

Let plug in the formula

Profit = $6,975 - $650 - $350

Profit = $5,975

Therefore If Benjamin accepts the offer, its profits will:Increase by $5,975

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Find the APR, or stated rate, in each of the following cases (Do not round intermediate calculations and round your final answer
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Answer:

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   11.85%                    Semiannually                             12.2 %

   12.37%                    Monthly                                      13.1%

   110.27%                    Weekly                                       10.8%

   13.54%                    Infinite                                        14.5%

Explanation:

EAR = ( 1 + ( APR / m )^m)-1

Semiannually

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0.059 x 2 = APR

APR = 0.1185 = 11.85%

Monthly

m = 12  / 1 = 12

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0.1310 + 1 = (1 + ( APR / 12 ) )^12

1.1310 = ( 1 + ( APR / 12 ) )^12

APR = 12.37%

Weekly

m = 52

0.1080 = ( ( 1 + ( APR / 52 ) )^52) - 1

0.1080 + 1 = (1 + ( APR / 52 ) )^52

1.1080 = ( 1 + ( APR / 52 ) )^52

APR = 10.27%

Infinite

m = 20,000

0.1450 = ( ( 1 + ( APR / 12 ) )^12) - 1

0.1450 + 1 = (1 + ( APR / 12 ) )^12

1.1450 = ( 1 + ( APR / 20,000 ) )^20,000

APR = 13.54%

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