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Digiron [165]
3 years ago
6

Otool Inc. is considering using stocks of an old raw material in a special project. The special project would require all 150 ki

lograms of the raw material that are in stock and that originally cost the company $2,236 in total. If the company were to buy new supplies of this raw material on the open market, it would cost $8 per kilogram. However, the company has no other use for this raw material and would sell it at the discounted price of $7.10 per kilogram if it were not used in the special project. The sale of the raw material would involve delivery to the purchaser at a total cost of $86 for all 150 kilograms. What is the relevant cost of the 150 kilograms of the raw material when deciding whether to proceed with the special project?
Business
1 answer:
frez [133]3 years ago
5 0

Answer:

The relevant cost of the 150 kilograms of the raw material when deciding whether to proceed with the special project: $979.

Explanation:

We do not use the original cost $2,236 because it is sunk cost.

We do not use market value because Otool Inc. does not either incur this cost nor sacrifice any benefit from not buying at market price.

The relevant cost of these raw material should be the benefit sacrificing from not selling the raw material, instead using it in the project; calculated as:

Selling price x Amount sold - Cost of delivery = 7.1 x 150 - 86 = $979.

Thus, the answer is $979.

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Beginning WIP is 45% complete and ending WIP is 10% complete as to conversion costs. Materials are added at the beginning of the
lara [203]

Answer:

c. none of these

units started into the process this period plus units in beginning inventory

Explanation:

In FIFO , the physical units are divided between the beginning units, units started in process and the ending units. But as all the materials is added at the beginning of the process so the FIFO physical units would be divided between the units started into the process this period plus units in beginning inventory and hence the equivalent units for materials will be calculated.

So the best choice is option c.

5 0
3 years ago
In a failed attempt at extending its brand to a new product line, Bic introduced a line of disposable underwear. To the extent t
kodGreya [7K]

Answer:

brand dilution

Explanation:

Brand dilution simply refers to a successful brand becoming a weak brand due to excessive overuse.

This usually happens when:

  • a company extends a successful brand into every single product that they can come up with.
  • in order to increase volume, the company starts to add cheaper versions of the same brand that do not have the same quality.

In this case, Bic started to brand products that aren't related with its main business.

3 0
3 years ago
A municipal dealer quotes a 4 year, 4% term revenue bond at 98. the yield to maturity is:
madam [21]
Yield to maturity (YTM) = [(C+(F-P)/n) / ((F+P)/2)]*100  
Given:
 Duration/term = n = 4 year
 Interest rate or coupon= 4%
 Price = P = 98 
 To find: Yield to maturity 
 Face value of the bond = F = 100
 So, interest/C = 4% of 100= 4 
 Solution: 
 Yield to maturity (YTM) = [(C+(F-P)/n) / ((F+P)/2)]*100 
 Now, putting values in the formula, 
  [(4+(100-98)/4) / ((100+98)/2)]*100  Answer = 4.54% is the yield to maturity

5 0
4 years ago
Consider the data on expected returns and betas for a variety of assets in the table below. what is the expected return on share
artcher [175]
I hate your answer choice
6 0
3 years ago
Activity-based costing allocates selling and administrative expenses a.based on sales volume in dollars. b.in accordance with GA
ollegr [7]

Based on how each product consumes activities, activity-based costing allocates selling and administrative expenses. Hence, Option D is the correct statement.

<h3>What do you understand by Activity-based costing?</h3>

A costing technique that identifies activities in an organization and assigns the cost of every activity to all services and products in line with the real consumption via way of means of each is referred to as Activity-based costing.

This version of the costing technique assigns greater indirect costs into direct fees as compared to traditional costing.

Hence, Based on how each product consumes activities, Activity-based costing allocates selling and administrative expenses. Option D is the correct statement.

learn more about Activity-based costing:

brainly.com/question/6654166

#SPJ1

5 0
2 years ago
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