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Vadim26 [7]
3 years ago
9

Psari's, a company that sells fishing​ nets, provides the following information about its​ product: Targeted operating income $

54 comma 000 Sales price per unit 6.00 Variable cost per unit 2.00 Total fixed costs 115 comma 000 What is the contribution margin​ ratio? (Round any intermediate calculations and your final answer to two decimal​ places.) A. 33.33​% B. 66.67​% C. 100​% D. 166.67​%
Business
1 answer:
Molodets [167]3 years ago
6 0

Answer:

B. 66.67​%

Explanation:

Contribution is the difference between the company's total revenue and the total variable cost. The ratio of the contribution to sales or revenue gives the contribution margin ratio.

The contribution may also be derived from the addition of the fixed cost and the operating income.

Contribution margin

= $115,000 + $54,000

= $169,000

Let the number of units to be sold to achieve targeted income be U

6U - 2U - 115,000 = 54,000

4U = 169,000

U = 42,250

Contribution margin ratio = 169000/(6 * 42,250)

= 66.67%

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Assume for a perfectly competitive firm, the market price of one box of tissues is $2. What is the marginal revenue when sales i
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8 0
3 years ago
Serotta Corporation is planning to issue bonds with a face value of $450,000 and a coupon rate of 16 percent. The bonds mature i
Brrunno [24]

Answer:

1. Dr Cash 481,588.61

    Cr Bonds payable 450,000

    Cr Premium on bonds payable 31,588.61

2. March 31

Dr Interest expense 14,447.66

Dr Premium on bonds payable 3,552.34

    Cr Cash 18,000

June 30

Dr Interest expense 14,341.09

Dr Premium on bonds payable 3,658.91

    Cr Cash 18,000

September 30

Dr Interest expense 14,231.32

Dr Premium on bonds payable 3,768.68

    Cr Cash 18,000

December 31

Dr Interest expense 14,118.26

Dr Premium on bonds payable 3,881.74

    Cr Cash 18,000

3. carrying value = $466,726.94

Explanation:

face value = $450,000

maturity = 2 years x 4 = 8 periods

coupon rate = 16% / 4 = 4%

coupon = $18,000

YTM = 12% / 4 = 3%

using a financial calculator, the PV of the bonds = $481,588.61

amortization first coupon = ($481,588.61 x 3%) - $18,000 = $3,552.34

Dr Interest expense 14,447.66

Dr Premium on bonds payable 3,552.34

    Cr Cash 18,000

   

amortization second coupon = ($478,036.27 x 3%) - $18,000 = $3,658.91

Dr Interest expense 14,341.09

Dr Premium on bonds payable 3,658.91

    Cr Cash 18,000

amortization third coupon = ($474,377.36 x 3%) - $18,000 = $3,768.68

Dr Interest expense 14,231.32

Dr Premium on bonds payable 3,768.68

    Cr Cash 18,000

amortization fourth coupon = ($470,608.68 x 3%) - $18,000 = $3,881.74

Dr Interest expense 14,118.26

Dr Premium on bonds payable 3,881.74

    Cr Cash 18,000

5 0
3 years ago
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