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2 years ago

Speedy Bikes could sell its bicycles to retailers either assembled or unassembled.

Business

1 answer:

Feliz [49]2 years ago

7 0

Answer:

Speedy Bikes

a. Incremental Analysis for the sell-or-process-further decision:

Cost of an Cost an Difference

unassembled bike assembled bike

Alternative 1 Alternative 2 Increment

Sales price of unassembled bike $450 $495 $45

Manufacturing cost per unit $290 $312 (22)

Net operating income $160 $183 $23

b. Speedy should process the bikes further.

c. It will generate an incremental net operating income of $23 per bike.

Explanation:

a) Data and Calculations:

Cost of an Cost an

unassembled bike assembled bike

Direct materials $150 $155

Direct labor 70 80

Variable overhead (70% of direct labor) 49 56 ($80 * 70%)

Fixed overhead (30% of direct labor) 21 21

Manufacturing cost per unit $290 $312

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3 years ago

Jilk Inc.'s contribution margin ratio is 61% and its fixed monthly expenses are $47,500. Assuming that the fixed monthly expense

JulsSmile [24]

Answer:

$36,070

Explanation:

Given that,

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3 years ago

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Answer:

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3 years ago

On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds mature at t

ss7ja [257]

Answer and Explanation:

The amortization schedule is presented below:

Date Cash Interest expense Amortization Balance

A B C = (A - B)

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E = D - C

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End of Year 4 $3,944 $3,671 $273 $58,000

Working notes:

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= $3,717 ÷ $58,998

= 6.30%

For year 2,

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= $58,771 × 6.30%

= $3,702.573

For year 3,

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= $58,530 × 6.30%

= $3,687.39

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3 years ago

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Answer:

The answer is absorption costing.

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3 years ago