Answer:
Increase by $31,500
Explanation:
Calculation to determine the operating income
First step is to calculate the Total relevant cost
DIFFERENTIAL ANALYSIS
MAKE BUY
Variable cost $144,900 $0
(2,100*$69)
Fixed cost $46,200 $0
(2,100*55*40%)
Purchase cost $0 (2100*76) = $159,600
Total relevant cost $191,100 $159,600
Now let determine the Increase or decrease of the company's operating income
Increase by =($191,100- $159,600)
Increase by = $31,500
Therefore Buying the valves from the outside supplier instead of making them would cause the company's operating income to: Increase by $31,500
Answer:
The correct answer is option A.
Explanation:
The monetary base can be defined as the amount of money that is in circulation in the hands of the public or held as reserves by banks.
The monetary base in an economy is equal to all currency in circulation plus reserves held by banks.
In other words, it includes highly liquid funds such as coins, notes, and bank deposits.
The money supply is a broader concept than the monetary base and includes the monetary base and other assets as well.
Answer:
<h2>The specific identification method</h2>
a) matches each unit of inventory with its actual cost
d) would be beneficial to a company that makes fine jewelry
Explanation:
The specific identification inventory valuation method is one of the inventory valuation method allowed by U.S. GAAP. The other allowed methods are weighted average; and first in, first out (FIFO). The specific identification method identifies every item kept in inventory and its price and tracks it from purchase to resale. Some types of businesses that use the specific identification method are jewelry companies and stores, car dealerships, art galleries, and furniture stores, who can easily identify each item and track the cost and price respectively.
Answer:
Franchisee
Explanation:
A franchise business is a form of business arrangement where a business owners , who is known as the franchisor , sells the right to operate its business to another entity known as the Franchisee.
This business arrangement is legally binding an it gives right to the use of the business name , logo ,and model to third party retail outlet.
This explains the type of business arrangement that Sana is planning , considering the explanation given in the question.
Answer:
20.1%
Explanation:
In capital asset prcing model (CAPM), cost of equity (or cost of retained earnings in this context) is calculated as below:
<em>Cost of equity = risk-free rate of return + beta x (market index return - risk-free rate of return)</em>
Please note that <em>(market index return - risk-free rate of return)</em> is equal to <em>market risk premium</em>
Putting all the number together, we have:
Cost of equity/retained earnings = 2.5% + 2.2 x 8% = 20.1%
<em>Note: The dividend growth rate, tax rate & stock standard deviation is not relevant in answering the question.</em>
