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Anastasy [175]
3 years ago
9

It costs Bonita Industries $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for $35. A f

oreign wholesaler offers to purchase 3100 scales at $15 each. Garner would incur special shipping costs of $1 per scale if the order were accepted. Bonita has sufficient unused capacity to produce the 3100 scales. If the special order is accepted, what will be the effect on net income?
a. $46500 increase.
b. $6200 increase.
c. $6200 decrease.
d. $9300 decrease.
Business
1 answer:
LenKa [72]3 years ago
5 0

Answer:

Effect on income= $6,200 increase

Explanation:

<u>Because it is a special offer, and there is unused capacity, we will not take into account the fixed costs:</u>

<u />

Total unitary variable cost= 12 + 1= $13

Selling price per unit= $15

<u>To calculate the effect on income, we need to use the following formula:</u>

<u></u>

Effect on income= number of units*unitary contribution margin

Effect on income= 3,100*(15 - 13)

Effect on income= $6,200 increase

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Answer:

B

Explanation:

Net present value is a tool used to analyze how profitable a project by deducting the present value the difference between cash inflow and cash outflow over a period of time.

The formula is (cash flow)/(1+r)^i

Revenue - $750,000

Expenses - $650,000

Increase in net income - 100,000

Annual depreciation charge - 650000/5 =$130,000

Discount rate - 12%=3.605

Present cash value =( $100,000+$130000) = $230,000

Please note that depreciation is added back as it is a non cash expenses

Present value of cash flow = annual cash flow * discount rate

=$230,000*3.605 =829,150

Net present value = 829150-650000= 179,150

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Explanation:

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If the economy is at potential output and the fed increases the money supply, in the long run real gdp will likely decrease.

<h3><u>What is supply?</u></h3>
  • A basic economic notion called supply refers to the total amount of a particular commodity or service that is made available to consumers.
  • When shown as a graph, supply can refer to the quantity that is offered at a particular price or the quantity that is offered over a range of prices.
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Trends in supply and demand are what underpin the modern economy. Based on price, utility, and personal choice, any particular commodity or service will have its own unique supply and demand patterns.

Know more about supply with the help of the given link:

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Please see attachment

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