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umka2103 [35]
2 years ago
9

Gordon Corporation produces 1,000 units of a part per year which are used in the assembly of one of its products. The unit cost

of producing these parts is:
Variable manufacturing cost $15
Fixed manufacturing cost 12
Total manufacturing cost $27
The part can be purchased from an outside supplier at $20 per unit. If the part is purchased from the outside supplier, two-thirds of the total fixed costs incurred in producing the part can be avoided. The annual financial advantage (disadvantage) for the company as a result of buying the part from the outside supplier would be: _____
Business
1 answer:
polet [3.4K]2 years ago
3 0

Answer:

Gordon Corporation produces 1,000 units of a part per year which are used in the assembly of one of its products. The unit cost of producing these parts is:

Variable manufacturing cost $15

Fixed manufacturing cost 12

Total manufacturing cost $27

The part can be purchased from an outside supplier at $20 per unit. If the part is purchased from the outside supplier, two-thirds of the total fixed costs incurred in producing the part can be avoided. The annual financial advantage (disadvantage) for the company as a result of buying the part from the outside supplier would be: <u>$3000</u>

Explanation:

As calculated ,

Total relevant cost to make = 1000*(15+12/3*2)= $23000

Total relevant cost to buy = 1000*20 = $20000

Financial advantage of buying = Total relevant cost to make - Total relevant cost to buy  = 23000-20000 = $3000

Hence,The annual financial advantage (disadvantage) for the company as a result of buying the part from the outside supplier would be: <u>$3000</u>

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Stephen runs a pet salon. He is currently grooming 130130 dogs per week. If instead of grooming 130130 ​dogs, he grooms 131131 ​
borishaifa [10]

Answer:

Profit will increase by $2.3

Explanation:

Data provided in the question:

If instead of grooming 130130 ​dogs, he grooms 131131 ​dogs

Marginal cost = $65.82

Marginal revenue = $68.12

Now,

The effect on his profits of grooming 131 dogs instead of 130 ​dogs will be:

Change in profit = Marginal revenue - Marginal cost

or

Change in profit = $68.12 - $65.82

or

Change in profit = $2.3

Hence,

Profit will increase by $2.3

7 0
2 years ago
R.S. Green has 250,000 shares of common stock outstanding at a market price of $28 a share. Next year’s annual dividend is expec
zhannawk [14.2K]

Answer:

WACC 6.18%

Explanation:

to get the cost of capital we solve using the gordon model:

\frac{divends}{return-growth} = Intrinsic \: Value

\frac{divends}{Price} = return-growth

\frac{divends}{Price} + growth = return

$Cost of Equity =\frac{D_1}{P)} +g

D1 1.55

P 28

f 0.00

g 0.02

$Cost of Equity =\frac{1.55}{28} +0.02

Ke 0.075357143

Then for the cost of debt, we need to calculate the YTM of the bonds:

which is the rate at which the present value of the coupon payment and maturity equals the market price:

For the complexity this is done with excel or a financial calculator there is also an approximation formula

YTM with excel: 0.073516565

now that we good this we need to determinate the weigth of equity and debt:

250,00 shares x 28 dollars each = 7,000,000

1,500 bonds of $1,000 each at 98% = 7,350,000

value of the company: 7,000,000 + 7,350,000 = 14,350,000

Ew: 7,000,000 / 14,350,000 = 0.487804878

Dw: 7,350,000 / 14,350,000 =0.512195122

Now we got all values and we can determinate the WACC:

WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})

Ke 0.075357143

Equity weight 0.487804878

Kd 0.074

Debt Weight 0.512195122

t 0.34

WACC = 0.075357143(0.48780487804878) + 0.074(1-0.34)(0.51219512195122)

WACC 0.0617752 = 6.18%

7 0
3 years ago
Gardening supplies are hot now, but they haven't always been. Why is this true of other businesses, too?
9966 [12]

i think your answer is B

ok

:P

╦___________________________________╦

│Hope this helped  _____________________│

│~Xxxtentaction ^̮^ _____________________│

╩___________________________________╩

5 0
2 years ago
41 had investments in stock funds 91 had investments in bond funds 60 had investments in money market funds 47 had investments i
Evgesh-ka [11]

Answer:

The answer is "22 and 80"

Explanation:

The important part is to understand how the Venn diagram can assist you with your numbers.

You cannot draw this one, and you can create one as follows:

the 3 sorts of funding, then make your way back thru the list

this is the figure in the center - "22 had all 3 funds"

where the four dimensions meet. In the next three statements, you'll be able to:

Work out where 2 circles connect (remember all 22 of those circles are connected).

That's because the numerals have been already placed throughout the center zone.

bond & money market solenoid valves at a ratio of 36-22=14

36-22=14 as to where the corporate market and the term deposit intersect

47-22=25 as to where equities and bonds connect You can use the top 3 statements to work out all the values in a table.

(Set of) just one circle (circle)

for stock the number is 141-(22+14+25)=80

for the bond, the number is91-(22+14+25)=30

for the money market, the number is 60-(22+14+14)=10

(universal set) Lastly, get the number that goes into the rectangle.

\to 200-(80+30+10+25+14+14+22)=5

a) 22\\b) 80

7 0
3 years ago
In a process costing system, the application of factory overhead usually would be recorded as an increase in: (CPA adapted) A. F
otez555 [7]

Answer: Factory overhead control

Explanation: Factory overhead is the account where the amount of cost incurred while manufacturing a product is recorded and no direct labour or material is recorded. When the manufactured goods are finished and produced they are recorded as expenses when the goods are sold as manufactured finished products.

All the expenses related to the factory are included in this account such as rent, utility, electricity, supplies, tools. Factory overhead is known as manufacturing burden or expenses.  

7 0
3 years ago
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