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WITCHER [35]
3 years ago
5

Management of Plascencia Corporation is considering whether to purchase a new model 370 machine costing $512,000 or a new model

220 machine costing $408,000 to replace a machine that was purchased 12 years ago for $455,000. The old machine was used to make product I43L until it broke down last week. Unfortunately, the old machine cannot be repaired. Management has decided to buy the new model 220 machine. It has less capacity than the new model 370 machine, but its capacity is sufficient to continue making product I43L. Management also considered, but rejected, the alternative of simply dropping product I43L. If that were done, instead of investing $408,000 in the new machine, the money could be invested in a project that would return a total of $57,000.
In making the decision to buy the model 220 machine rather than the model 370 machine, the differential cost was:_________

a. $455,000
b. $408,000
c. $512,000
d. $485,000
Business
1 answer:
Rudiy273 years ago
8 0

Answer:

Option d ($485,000) is the correct alternative.

Explanation:

When making the investment decision throughout the 220 model computer, the expense of the opportunity or chance seems to be:

= $485,000

As we know,

⇒ Opportunity cost = Return from alternative investment

i.e.,  $485,000

All other available options weren’t applied to the example mentioned. So, the solution above is the right one.

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________leads to better quality and lower prices?
Nataly [62]

Answer:

a

Explanation:

because it makes sense in the sentence

5 0
3 years ago
What does the process of specialization do for an economy?
Rainbow [258]
It makes production more efficient
7 0
3 years ago
Lasseter Corporation has provided its contribution format income statement for August. The company produces and sells a single p
Margarita [4]

Answer:

$93,600

Explanation:

The computation of the total contribution margin is shown below:

Given that

For 5,100 sales unit, the contribution margin is $91,800

So, for 5,200 sales units, the contribution margin would be

= Contribution margin × new sales units ÷ previous sales units

= $91,800 × 5,200 units ÷ 5,100 units

= $93,600

All other information which is given is not relevant. Hence, ignored it

5 0
3 years ago
A. True
Usimov [2.4K]
The correct answer is false
6 0
3 years ago
The following are the income statements of the Hancock Company for two consecutive years. Increases in which expenses contribute
dsp73

Answer:

Increase in Administrative Expense of $3,300 additional led to loss in the year 2016.

Explanation:

As for the provided details:

Particulars                2016             2015

Revenue                 $30,000         $20,000

Cost of goods sold  $17,800        $12,000

Gross margin          $12,200         $8,000

Operating Exp        

Selling Exp             $4,800            $4,600

Admin. Exp             $7,800            $3,000

Total operating exp $12,600         $7,600

Net Income              ($400)            $400

As we see the major difference which is irrelevant is in administration expense, that is because difference in cost of goods sold is somewhere justified as, when it calculated as a percentage of sale that is $12,000/$20,000 = 60%

Thus for year 2016 also the expense shall be $30,000 \times 60% = $18,000

Thus, it is justified but for administrative expense $3,000/$20,000 = 15%

For 2016 = $30,000 \times 15% = $4,500

But since it is very much exaggerated, by $7,800 - $4,500 = $3,300 this is the main reason of loss.

5 0
3 years ago
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