1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
ryzh [129]
3 years ago
15

Finch Modems has excess production capacity and is considering the possibility of making and selling paging equipment. The follo

wing estimates are based on a production and sales volume of 1,600 pagers. Unit-level manufacturing costs are expected to be $26. Sales commissions will be established at $1.60 per unit. The current facility-level costs, including depreciation on manufacturing equipment ($66,000), rent on the manufacturing facility ($56,000), depreciation on the administrative equipment ($13,800), and other fixed administrative expenses ($74,950), will not be affected by the production of the pagers. The chief accountant has decided to allocate the facility-level costs to the existing product (modems) and to the new product (pagers) on the basis of the number of units of product made (i.e., 5,600 modems and 1,600 pagers). Required a. Determine the per-unit cost of making and selling 1,600 pagers. (Do not round intermediate calculations. Round your answer to 3 decimal places.) b. Assuming the pagers could be sold at a price of $40 each, should Finch make the pagers
Business
1 answer:
Naily [24]3 years ago
3 0

Answer:

a). Per unit cost = $ 159.31

b). Yes, Finch Modems should make the pagers.

Explanation:

a). Facility level cost proposed to be allocated to the pager line

$=\frac{1600}{5600+1600} \times (66,000+56,000+13,800+74,950)$

= 0.22 + 210750

= $ 210750.22

Facility cost per unit of pager = $\frac{210750.22}{1600}$ = $ 131.71

Cost per unit of pager = $ 26 + $ 1.60 + $ 131.71

                                     = $ 159.31

b). At the selling price of $ 40 per unit, the pager line will result in an operational loss, the profit for the company as a whole will increase if it decides to manufacture the pagers.

Contribution margin per unit of pager = $ 40 - ( $ 26 + $ 1.60)

                                                               = $ 15.6

Total contribution margin per unit of pager = 1600 x $ 15.6

                                                                        = $ 24,960

The net operating income for the company would increase by $ 24.960 if the pagers are added to its product portfolio.

Hence Finch Modems should make the pagers.

You might be interested in
A(n) _____ refers to a situation where a publicly traded company is purchased and then taken off the stock market.
dalvyx [7]
Leveraged buyout/////////////////
4 0
3 years ago
Shiffon Electric Group wants to enter the European market via a wholly owned subsidiary where there are already well-established
Aleonysh [2.5K]

The most suitable mode of entry for Shiffon Electric into the European market will be through <u>acquisition</u>.

<h3>What is an acquisition?</h3>

This is a business arrangement whereby a company purchases most or all of another company's shares to gain control of that company.

Thus, this business arrangement will allow Shiffon Electric Group to enter into the market effectively and have market share despite number of well-established incumbent enterprises.

Read more about acquisition

<em>brainly.com/question/24519774</em>

5 0
2 years ago
ANSWER QUICKLY PLEASE: What do certifications show a potential employer? Answer in 3–4 sentences.
Nat2105 [25]

Answer: That you are qualified for the job role

Explanation:

Certifications allows an employees to show a current or future hiring manager that they possess the skill set and expertise needed for the job.

They help the employers hire the most competent and qualified personnel for the job as it shows you know your way around the job. And when that certification is now backed by real world on the job experience, this gives the hiring manager a sense of security.

3 0
3 years ago
Which of the following is a mutually exclusive cost pool used in activity-based cost accounting? a. All of the answers are corre
VikaD [51]

Answer:

The correct answer is A: All of the answer are correct

Explanation:

ABC defines production as consisting of a variety of activities, and it assigns costs to those activities. An activity cost pool is an aggregate of all the costs associated with performing a particular business task, such as making a particular product. By pooling all costs incurred in a particular task, it is simpler to get an accurate estimate of the cost of that task.

Cost pool is created for those costs more closely aligned with the production of goods or services. It is very common to have separate cost pools for each product line. If production batches are of greatly varying lengths, then it has to consider creating cost pools at the batch level, so that it can adequately assign costs based on batch size.

To conclude, the creation of a cost pool and the subsequent assignment of costs will vary according to the length of production and the possibility to discriminate and assign costs.

4 0
3 years ago
Which of the following statements is true? Group of answer choices An explicit cost is an actual cost; an implicit cost is a the
professor190 [17]

Answer:

Economic costs include both explicit costs and implicit costs.

Explanation:

  • In economics, costs can be in the form of explicit and implicit as implicit costs are opportunity costs and are opportunities for engaging in business. While the explicit costs are accounting costs which are involved in the production of raw matter, wages etc.
7 0
3 years ago
Other questions:
  • "how long will it take to double your savings if you earn 7.2 percent interest, compounded annually?"
    13·1 answer
  • Park &amp; Company was recently formed with a $5,400 investment in the company by stockholders. The company then borrowed $2,400
    15·1 answer
  • Identify and discuss the “needs” of a society.
    7·1 answer
  • A small consulting company in Waikiki, Hawaii struggles financially because of limited access to economic resources. This compan
    6·1 answer
  • Which of the following policies are consistent with the goal of increasing productivity and growth in developing countries? Chec
    8·1 answer
  • To find an error, you should do all of the following except double-check every entry. find the difference between debits and cre
    13·1 answer
  • the gross sales for store B were 876500. the custmer returns and allowances were 10%. what was the dollar amount of returns and
    9·1 answer
  • Dove, Inc., had additions to retained earnings for the year just ended of $643,000. The firm paid out $40,000 in cash dividends,
    5·1 answer
  • An airline company is interested in the opinions of their frequent flyer customers about their proposed new routes.​ Specificall
    14·1 answer
  • Calculating Lower-of-Cost-or-Net Realizable Value
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!