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sasho [114]
3 years ago
10

Tide Corporation has traditionally made a subcomponent of its major product. Annual production of 30,000 subcomponents results i

n the following costs: Direct materials $ 250,000 Direct labor $ 200,000 Variable manufacturing overhead $ 190,000 Fixed manufacturing overhead $ 120,000 Tide has received an offer from an outside supplier who is willing to provide the 30,000 units of the subcomponent each year at a price of $28 per unit. Tide knows that the facilities now being used to manufacture the subcomponent could be rented to another company for $80,000 per year if the subcomponent were purchased from the outside supplier. There would be no effect of this decision on the total fixed manufacturing overhead of the company. Assume that direct labor is a variable cost. At what price per unit charged by the outside supplier would Tide be indifferent between making or buying the subcomponent
Business
1 answer:
poizon [28]3 years ago
8 0

An amount of $24 per unit will need to be charged by the outside supplier to make Tide be indifferent between making or buying the subcomponent.

Relevant cost per unit to make = (Direct materials + Direct labor + Variable manufacturing overhead + Fixed manufacturing overhead) / Total sub-component unit

Relevant cost per unit to make = ($250,000 + $200,000 + $190,000 + $80,000) / 30,000 units

Relevant cost per unit to make = $24

Hence, the  indifferent price is $24 per unit

Therefore, an amount of $24 per unit will need to be charged by the outside supplier to make Tide be indifferent between making or buying the sub-component.

Read more about  indifferent price:

<em>brainly.com/question/24516871</em>

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To me they should always see if it is real money they are getting before they give them the item.
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3 years ago
A $70 price tag on a sweater in a department store window is an example of money functioning as a
Semmy [17]

Answer: Is an example of money functioning as a UNIT OF ACCOUNT.

Explanation: Money is defined as an item of value between two or more parties used for the exchange of goods or services. It's various functions are; store of value, a unit of account, a medium of exchange.

Money as a unit of account is a measurement of value/cost of goods, services, or assets.

5 0
4 years ago
Personal Consumption Expenditures$4,500 Consumption of Fixed Capital150 Gross Private Domestic Investment800 Government Purchase
Natali [406]

Answer:

The GDP in this economy is $6,230 billion.

Explanation:

The GDP can be calculated using the following formula:

Y = C + I + G + (X - M) ....................................... (1)

Where:

Y = GDP of the economy

C = Personal Consumption Expenditures = $4,500

I = Gross Private Domestic Investment = $800

G = Government Purchases = $950

X = Exports = $65

M = Imports = $85

Substituting the values into equation (1), we have:

Y = $4,500 + $800 + $950 + ($65 - $85)

Y = $6,250 - $20

Y = $6,230

Since the figures are in billions of dollars, the GDP in this economy is therefore $6,230 billion.

8 0
3 years ago
The Cook Corporation has two divisions--East and West. The divisions have the following revenues and expenses: East West Sales $
Ainat [17]

Answer:

The correct answer is loss of $155,000.

Explanation:

According to the scenario, computation of the given data are as follow:-

West division’s net operating income if it’s continue = ($15,000 - $75,000)

= -$60,000

We can calculate the net operating income if west discontinue by using following formula:-

West division’s net operating income if it’s discontinue = Net Operating Income - Allocated Common Corporate Cost

= ($15,000 - 170,000)

= -$155,000  (Negative shows loss).

Hence, Loss of $155,000.

5 0
3 years ago
Read 2 more answers
A European call and put option on the same security both expire in three months, both have a strike price of 20, and both sell f
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Answer:

Call payoff = Max [0, Stock price - Strike price]

Call payoff = Max[0,25-20]

Call payoff = 5

Put payoff = Max[0, strike price - stock price]

Put payoff = max[0,20-25]

Put payoff = 0

Strike price = K = 20

Stock price​ = S = 25

interest rate = 10% = 0.1

Time to expiry = T = 3 months = 3/12 = 0.25

Put call parity: C + K*Exp(-r*T) = P + S

C = P + S​ - K*Exp(-r*T)

Call = 3 + 25 - 20*exp(-0.1*0.25)

Call = 28 - 19.5062 =

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So, yes there is an arbitrage . Implied value is 8.4938 but trades at 3.00; Call option is trading cheap hence we should buy more call options.

4 0
4 years ago
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