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Alekssandra [29.7K]
3 years ago
7

The following situations refer only to the preceding data; there is no connectionbetween the situations. Unless stated otherwise

, assume a regular selling price of $6 per unit. Choose the best answer to each question. Show your calculations.1.The pen is usually produced and sold at the rate of 240,000 units per year (an average of 20,000 per month). The selling price is $6 per unit, which yields total annual revenuesof $1,440,000. Total costs are $1,416,000, and operating income is $24,000, or $0.10 per unit. Market research estimates that unit sales could be increased by 10% if prices were cut to $5.80. Assuming the implied cost-behavior patterns continue, this action, if taken, would
Business
1 answer:
jek_recluse [69]3 years ago
6 0

Answer:

If prices are cut by $0.2 then the operating income will increase by $91,200.

Explanation:

Current Gross Profit is :

Revenue [240,000 * $6] = $1,440,000

Cost of Sales = $1,416,000

Gross Profit = $24,000

If selling price is reduced to $5.80

Revenue $5.80 * [ 240,000 * 1.10 % ] = $1,531,200

Cost of Sales $1,416,000

Gross Profit = $115,200

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c. Only new securities are sold in the primary market.

Explanation:

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  • As an example, think about a company which is increasing its capitalization and wants to emit new stocks: it would do it in the primary market.
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Universal Containers email policy requires that all email traffic remain within its firewall. Currently, the company has 200 sup
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A corporation is a type of partnership that?
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That has share holders and a board of directors.
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3 years ago
Custom Cars purchased $39,000 of fixed assets two years ago that are classified as 5-year MACRS property. The MACRS rates are 20
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Answer:

The after-tax cash flow (after-tax salvage value) from the sale is $18,941.20

Explanation:

The computation of the after-tax cash flow is shown below:

= Purchase of fixed asset - depreciation charged - sale value of machine + profit on sale - tax rate

= $39,000 - ($39,000 × 20% + 32%) - $19,000 + $280 -  21%

= $39,000 - $20,280 - $19,000 + 280 - $58.80

= $18,720 + $280 - $58.80

= $18,941.20

The $18,720 reflect the Written down value of the fixed asset which come from

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