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zheka24 [161]
3 years ago
15

Joint Cost Cheyenne, Inc. produces three products from a common input. The joint costs for a typical quarter follow: Direct mate

rials Direct labor Overhead $45,000 55,000 60,000 The revenues from each product are as follows: Product A $75,000 Product B 80,000 Product C 30,000 Management is considering processing Product A beyond the split-off point, which would increase the sales value of Product A to $116,000. However, to process Product A further means that the company must rent some special equipment costing $17,500 per quarter. Additional materials and labor also needed would cost $12,650 per quarter
a. What is the gross profit currently being earned by the three products for one quarter?
b. What is the effect on quarterly profits if the company decides to process Product A further?
Business
1 answer:
Drupady [299]3 years ago
7 0

Answer:

a. Total revenue from the 3 products:

= $75,000 + $80,000 + $30,000

= $185,000

Total costs at the split-off point:

= $45,000 + $55,000 + $60,000

= $160,000

Gross profit currently being earned

= Total revenue - Total costs

= $185,000 - $160,000

= $25,000

b. Incremental revenue from product A:

= $116,000 - $75,000

= $41,000

Incremental costs = Rent for special equipment + Materials and labor cost

= $17,500 + $12,650

= $30,150

Incremental gross margin = Incremental revenue - Incremental costs

= $41,000 - $30,150

= $10,850

So, if product A is further processed, quarterly profits will increase by $10,850.

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Alona [7]

Answer: Liquidation value

Explanation:  

The liquidation value is one of the type of physical assets of an organization and the business value, real estate firms, directories and the equipment are refers as the liquidation value that helps in evaluating the overall worth of the firm.

This organizational value is lower as compared to the market value and it has less time for selling the products in the open market.  

According to the given question, the liquidation value is refers as the actual amount of the stockholder expected value value in the market. Therefore, Liquidation value is the correct answer.

5 0
3 years ago
When Sheri, a socialite, got some bad publicity for her recent choice of evening wear, she decided to change designers. However,
valentinak56 [21]

Answer:

The correct answer is the option C: Relational switching cost.

Explanation:

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To continue, the third one, <em>the relational switching cost</em> refers to the situation where a company has changed its supplier and a big loss of identification and emotional bonds changed as well with it. Furthermore, when relational switching costs take place the personal relationships between the people involved in the transactions of the company are lost and that generates an impact in the new relationships with the new supplier.

5 0
2 years ago
Bonds are securities that can be readily bought and sold. A bond issue consists of a number of bonds, usually in denominations o
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A bond issue consists of a number of bonds, usually in denominations of $1000 or $5000 and is sold to many different lenders.

<h3>What is a bond?</h3>

It should be noted that bonds are securities that can be readily bought and sold.

In this case, a bond issue consists of a number of bonds, usually in denominations of $1000 or $5000 and is sold to many different lenders.

Learn more about bonds on:

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7 0
1 year ago
After graduation, you decide to go into a partnership in an office supply store that has existed for a number of years. Walking
MakcuM [25]

Answer:

257 boxes

Explanation:

The computation is given below;

Daily Demand would be

= 5000 ÷ 365

Standard Deviation = 10 boxes

Lead Time = 2 Weeks + 3 Days = 17 Days

Service Level = 0.98

Reorder Point = avg(d) × LT + z ×  σd × sqrt(LT)

= 5000 ÷ 365 × 17 + 2.05 × 10 × 170.5

= 317

So, the number of boxes should be ordered is  

= 317 - 60

= 257 boxes

6 0
3 years ago
Productivity may best be defined as
AleksandrR [38]
<span>The answer is C. Productivity is the ratio of outputs to inputs. This answer is correct because productivity is a measure of efficiency, and is not a measure of quantity, profit (revenue), or quality. Productivity is the measure of effectiveness in converting inputs to outputs.</span>
3 0
2 years ago
Read 2 more answers
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