Answer:
a. decrease of $18,000
Explanation:
The calculation of overall effect on the company's monthly net operating income is shown below:-
<u>Particulars Current Proposed
</u>
Sales $800,000 $837,000
($200 × 4,000) (200 - 14) × (4,000 + 500)
Variable
expenses $160,000 $180,000
(40 × 4,000) (40 × (4,000 + 500))
Contribution
margin $640,000 $657,000
Fixed
expenses $531,000 $566,000
($531,000 + 350,00)
Net operating
income $109,000 $91,000
Decrease in net operating income is
= $109,000 - $91000
= $18,000
Answer:
cost of machining per ceiling fan= $18 per unit
Explanation:
<em>Activity-based costing is a form of absorption costing where overheads are charged to product using cost drivers. Under this method, overheads are first analyzed and categorized by the activities responsible for them and then charged to product based on the amount of benefits enjoyed using cost drivers.</em>
For example, the machining overhead would charged to each ceiling fan using the machining overhead rate per machine hours.
Cost of machining per ceiling fan = Machining hours × overhead rate per machine hours
= 2.50 × $7.20= $18 per unit
cost of machining per ceiling fan= $18 per unit
Answer:
The maximum growth rate to my calculations is 8.32%, since it is closer to option E), I´d choose E) 8.37%
Explanation:
Hi, in order to find the growth rate given all the info of the problem, we need to use the following formula.
Where:
g = growth rate
b=retention ratio
R = return on equity
Since R = Earnings / Equity, and our dividend payout ratio (equals to 1 - b)our fromula changes to:
So, everything should look like this:
So, the growth rate is equal to 8.32% but this option is not available, therefore we´ll go for the closest one, that is E) 8.37%.
Best of luck.
Answer:
(a)70 years
(b)23.33 years
(c)8.75 years
Explanation:
According to the Rule of 70, for a given interest rate x, funds double in 
years.
(a)For a savings account earning 1% interest per year,
The number of years it will take the fund to double= 
=70 years
(b)For a U.S. Treasury bond mutual fund earning 3% interest per year.
The number of years it will take the fund to double= 
=23.33 years
(c)For a stock market mutual fund earning 8% interest per year.
The number of years it will take the fund to double= 
=8.75 years
The real interest rate would be 5%.
You are getting 8% interest and losing 3% due to inflation= 5%
