When a resource, such as space in the factory, has no alternative use, its opportunity cost is _____

Waymon Co. has net sales of $100,000, cost of goods sold of $70,000, and operating expenses of $18,000. What is its gross profit

Serjik [45]

Gross profits is defined as the total profit generated minus the costs of goods sold, that is, gross profit = sales - costs of goods sold.
From the question given,
Net sale = $ 100,000
Costs of goods sold = $ 70,000
Gross profit = $100,000 - $70,000 = $30,000.
Thus, the gross profit is $30,000.
Operating expenses is not directly involved in the production process that is why it is not used in the calculation of gross profit. But the operating cost will be involved in the calculation if we are asked to calculate the NET PROFIT.

7 0

4 years ago

Which is a commodity someone might invest in?

monitta

Answer:

b) natural resources

Explanation:

Natural resources refer to valuable materials found beneath, above, and on the earth's surface. They are naturally occurring, meaning no human effort is required in producing them. Natural resources make a good source of wealth. Examples of natural resources are land, mineral, oils and gas, forests, water, sunlight, wind, and many others.

Anyone with access to natural resources can invest to make them marketable products. Extraction of oil and refining is an example of investing in natural resources. Processing of trees to wood, use of solar to generate power are other examples.

6 0

3 years ago

Read 2 more answers

Consider a mutual fund with $300 million in assets at the start of the year and 12 million shares outstanding. If the gross retu

Vikentia [17]

Answer:

A 15.64%

Explanation:

300*1.18 = 354

354*0.02 = 7.08

354 - 7.08 = 346.92

rate of return = 346.92/300

= 15.64%

Therefore, The rate of return on the fund is 15.64%

3 0

3 years ago

A manufacturing company has units to produce of 940 units for the month. Each unit requires 3.5 hours of labor to produce. The c

elena-s [515]

Answer:$49,350

Explanation:

The total cost of direct labor for the month will be:= 940 units × 3.5 × $15= $49,350

8 0

2 years ago

Allen Construction purchased a crane 6 years ago for $130,000. They need a crane of this capacity for the next 5 years. Normal o

Korvikt [17]

Answer:

<u>For retaining of Old Machine Equipment</u>

Price of old equipment 3 yrs ago = $130,000

O & M cost per year = $35,000

Using the Cash flow approach

End of year Cash flow 1 Old equipment

0 $0 Initial Cash flow

1 -$35,000 O & M cost per year

2 -$35,000 O & M cost per year

3 -$35,000 O & M cost per year

4 -$35,000 O & M cost per year

5 -$35,000 O & M cost per year

Hence, Annual worth = Initial cash flow + Annual cost

Annual worth = 0 - $35,000

Annual worth = -$35,000

<u>For buying of new equipment</u>

Cost of buying new crane = $150,000

Market value of old crane = $40,000

Time = 5 years

O & M cost per year = $8,000

Salvage value = $55,000

MARR = 20%

Using the Cash flow approach

End of year Cash flow 1 New equipment

0 $110,000 -$150,000 + $40,000

1 -$8,000 O & M cost per year

2 -$8,000 O & M cost per year

3 -$8,000 O & M cost per year

4 -$8,000 O & M cost per year

5 $47,000 -$8,000 + $55,000

Annual worth = Initial cash flow + Annual cost + Salvage value

Annual worth = -$110,000(A/P 20%,5) - $8,000 + $55,000(A/P 20%,5)

Annual worth = -$110,000*(0.334) - $8,000 + $55,000*(0.134)

Annual worth = -$36,781.77 - $8,000 + $7,390.88

Annual worth = -$37,908.88

Conclusion: We should retain the old machine as it is more favorable than purchase of new equipment

5 0

3 years ago

When a resource, such as space in the factory, has no alternative use, its opportunity cost is ______.