Answer: a.$275,000
Explanation:
Let us assume local production sales of 0 for simplicity of analysis.
At 0 there will be no Variable Costs and no fixed costs because they are dependant on the amount of units produced.
If then Rylan Corporation receives 25,000 units at $16 per unit this will change the Variable costs as it will have to incorporate the new units.
The question however says that normal production continues. This means that Fixed costs do not change. That means fixed costs remain at $0.
That means the only change will be the Variable costs of selling 25,000 units.
At a rate of $11 per unit we then have,
= 11 * 25,000
= $275,000
The costs have increased by $275,000 from 0 which means that $275,000 is the Incremental cost.
Note that Fixed and Variable costs of 0 are improbable and we're only used for simpler analysis. Feel free to try the question with other number of units for your own practice. You will arrive at the same answer regardless.
Answer:
a. $34,900
Explanation:
The computation of the cost of direct material used is shown below:
= Opening balance of raw material + purchased materials - ending balance of raw material
= $10,300 + $34,400 - $9,800
= $34,900
Hence, the correct option is a.
Answer:
2.8%
Explanation:
The formula to calculate value of a perpetuity is as follow:
V = Annuity payment in year 1 / (r-g)
V: Value of the perpetuity
r: Discount rate
g: Growth rate (missing value)
By inputting numbers into the formula, we have:
6225.81 = 386 / (0.09 - g)
--> g = 2.8%
Answer:
B) False
Explanation:
The correct phrase should be:
Generally speaking, oligopolistic industries producing raw materials and semifinished goods usually offer standardized products, while oligopolists producing consumer goods usually offer differentiated products.
An example of an oligopolistic industry that we all know about is the car industry. There are very few car companies in the world since only very large companies can actually manufacture cars. Car companies offer differentiated products.
