Costs and benefits that should be ignored when making decisions are called _____

Tiny went back to his office after the meeting and began to crunch the numbers on the rapid inflator. At a price of $10 per unit

Artist 52 [7]

Solution and Explanation:

Part A - Inflatable divisions's Current Return on Investment = Yearly Earnings / Investment Cost * 100

There the Inflatable Division is Currently Earning $ 250,000 annually from an Asset base of $ 1,250,000

Therefore, ROI = $250000 / 1250000 * 100=20 \%$

Part B - Let the maximum variable cost be X.

Given that - 1. Selling Price per Unit = $10 , 2. No of Units to be produced = 40000 , 3. Annual Fixed Cost = $ 140000

Therefore , ROI = Current Earning + New Earning / Current Assets + New Assets

20% = $250000+[(10-\mathrm{X}) * 40000-\underline{140000}] / 1250000+100000$

Solve for X getting, X = 6

Therefore maximum variable cost it can incur without change in current ROI is $ 6 per unit

Resulting Contribution Margin per Unit = SP - VC = $10 minus $6 = $4 per unit

part C - Minimum Transfer Lightning division Should charge

Given Information - Capacity of Lightning division is 150000 units and Utilized capacity is 135000 units. Therefore Spare capacity is 15000 units .Also Market Price of Product of Lightning division is $ 5 and Variable cost is $3 per unit.

So for the First 15000 units of Requirement of Inflatable division - Transfer Price should be Variable cost i.e $ 3 per unit because Lightning division has spare capacity in this.

For the next 25000 units of requirement of Inflatable division - Transfer Price should be Market Price i.e $ 5 per unit as Lightning division has to reduce is external sale.

Therefore Minimum TP = 1 $5000 * 3+25000 * 5 / 40000=\$ 4.25$ per Unit

Part D - No, Here Tiny offers to transfer $4 ( $6 - $2 ) per unit to Lightning division. However the minimum TP Lightning should get is 4.25 per unit and if less than this TP is offered by Tiny it will lead to loss in the Lightning Division.

3 0

4 years ago

Article IV of the Constitution obligates states to give this to one another's citizens.

enyata [817]

C i think grrr

enneves

3 0

3 years ago

Samsonite has declared a 90% stock dividend. At the time of the declaration, Samsonite's stock was selling for $250 per share. I

NeTakaya

Answer:

$131.58

Explanation:

The computation of the new stock price is shown below:

= Selling price of stock per share ÷ current number of shares

= $250 ÷ 1.90

= $131.58

Since the 90% dividend is declared. It means for each share 90% dividend is declared so after stock dividend, the number of shares would be

= 1 + 90%

= 1 + 0.9

= 1.9

We simply divide the selling price by the current number of shares

4 0

3 years ago

The conservation practice that sets aside areas to provide sanctuaries for wildlife is called __________.

DiKsa [7]

The answer is preserves and parks.

5 0

3 years ago

What is the name of the economic concept that acknowledges that personal and financial resources are used for one purpose these

ddd [48]

Answer:

This concept is called the opportunity cost.

Explanation:

The opportunity cost of any economic decision is the cost of giving up or sacrificing its alternative. We are aware that resources are limited and have alternative uses. We have to use these resources to satisfy unlimited wants and needs.

If we use resources for one purpose it cannot be used for another. So we have to make a decision on how to spend the resources, on which alternative use. If we select one alternative, we need to give up another. The cost incurred on sacrificing or giving up the other alternative is the opportunity cost of using the resource for the first alternative.

3 0

3 years ago

Costs and benefits that should be ignored when making decisions are called ______ costs and benefits.