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Licemer1 [7]
2 years ago
15

You currently purchase a part used in your production process from an outside supplier, and have decided to begin making this pa

rt in-house. You have two equipment options for moving production in-house: special-purpose equipment and general-purpose equipment. Cost information for these two options is as follows:
ALTERNATIVE
Special-Purpose Equipment
General-Purpose Equipment FIXED COST
$200,000 per year
$50,000 per ye ar VARIABLE COST
$15 per unit
$20 per unit
Use Scenario 2.6 to solve this mystery. At an annual requirement of 40,000 units, what does the company save per year by selecting the low-cost option?
a) $40,000
b) $50,000
c) $150,000
d) $300,000
Business
1 answer:
KIM [24]2 years ago
7 0

Answer:

At an annual requirement of 40,000 units, selecting the low-cost option will save the company per year:

b) $50,000

Explanation:

a) Data and Calculations:

ALTERNATIVE                           FIXED COST            VARIABLE COST

Special-Purpose Equipment     $200,000 per year      $15 per unit

General-Purpose Equipment     $50,000 per year     $20 per unit

Total Cost of Production for 40,000 units under the two alternatives:

ALTERNATIVE       FIXED COST    VARIABLE COST         TOTAL  COSTS

Special-Purpose   $200,000      $600,000 ($15*40,000)    $800,000

General-Purpose     $50,000    $800,000 ($20*40,000)   $850,000

b) The difference between the two alternatives in total costs is $50,000 ($850,000 - $800,000) with the low-cost alternative as the Special-Purpose Equipment.

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Yuliya22 [10]
Here is the correct order of investments from Lower Risk to Higher Risk: <span> Treasury bond − Diversified mutual fund – Stock

Treasury bond is released by Government, so unless your country went bankrupt, it is safe to assume that you will get the investment back.

Diversified mutual fund puts your eggs in a lot of baskets So in case one of your investment fail, the others could still support your overall investments

Since the stock is a single entity and really fluctuative, it is considered as the most dangerous type of investment.

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3 0
3 years ago
Monette Corporation has found that 70% of its sales in any given month are credit sales, while the remainder are cash sales. Of
hoa [83]

Answer and Explanation:

The preparation of cash collection budget is shown below:-

                            Cash Collection Budget

               For the month of January through March

                                   January         February         March          Quarter

Cash sales                   $43,500      $37,500           $58,500      $139,500

Collection on Credit sales

20% month of sale       $20,300      $17,500        $27,300      $65,100

40% month after            $33,600     $40,600       $35,000      $109,200

24% two months after    $17,640        $20,160        $24,360        $62,160

Total Cash collection      $115,040      $115,760      $145,160        $375,960

Working Note 1

                   November        December       January     February     March

Total Sales   $105,000          $120,000       $145,000    $125,000   $195,000

Cash sales   $31,500            $36,000       $43,500     $37,500     $58,500

Credit sales   $73,500            $84,000       $101,500      $87,500     $136,500

Credit sales is 70% of Total sales every month

Cash Sales is 30% of Total sales every month

Working Note 2

                            January        February       March         Quarter

Cash sales            $43,500      $37,500      $58,500        $139,500

Cash collection from credit sales of

November            $17,640                                                 $17,640

December          $33,600      $20,160                               $53,760

January                $20,300     $40,600        $24,360         $85,260

February                                   $17,500       $35,000         $52,500

March                                                          $27,300            $27,300

Total collections  $115,040     $115,760      $145,160           $375,960

6 0
2 years ago
The Weimer Corporation wants to accumulate a sum of money to repay certain debts due on December 31, 2030. Weimer will make annu
valentinak56 [21]

Answer:

the fund balance is $1,727,056.25

Explanation:

The computation of the fund balance is shown below:

Given that

PMT = $125,000

NPER  = 10

RATE = 7%

PV = $0

The formula is shown below:

= -FV(RATE,NPER,PMT,PV,TYPE)

After applying the above formula, the fund balance is $1,727,056.25

Here basically the future value formula should be applied

7 0
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The nations selling the gasoline would be in trouble. They would earn less money and the possibility of a depression like the one the US had under Hoover and FDR would occur.
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2 years ago
When looking for capital, bankers and other lenders will usually feel most comfortable investing in a/an
lilavasa [31]
Existing business with a proven record. When you ask for investments, the lending institution will most definitely ask for your financial track record. They would want to know if you are a good paymaster because they will need the assurance that you can pay them back. Even if you have a really original idea and want to start a new business, there will still be some reservation if you have no track record because the lenders do not know if you are trustworthy or not. Unlike if you already have a proven record that you are a good paymaster, then you at least have proof that you can pay back. 
7 0
2 years ago
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