Answer:
Company's net income will increase by $2500 if the product line is discontinued.
Explanation:
From the data given:
Sales 25000
variable cost (less) 19000
contribution margin 6000
Fixed costs
directed fixed costs 7000
allocated fixed costs 5000
net income -6000
Fixed cost savings 7000
rental revenue 1500
total savings if discontinued 8500
contribution margin (less) 6000
net income increased by 2500
Answer:
1. 120 hot dogs per day
2. $1,920
3. Inelastic
4.200
Explanation:
1. Break even is a term given to a situation where there is no profit or loss made by an organization for product sales.
Formula is;
Fixed cost /contribution per unit, where contribution per unit is selling price - variable price.
Solution.
Since Total fixed cost =$1,200, Selling price=$16, Variable costs=$6
=Fixed costs/(Selling price - Variable costs).
= $1,200/($16 - $6)
=$1,200/$10
=120 hot dogs.
2. Break even point in dollar sales volume. This refers to the number of products that would be produced and sold to cover production cost.
Formular is ;
Fixed cost/contribution per unit× Sales price per unit.
Solution
=Fixed costs/(Selling price - Variable costs)× Selling price.
=$1,200/($16 - $6)×$16
=$1,200/$10×$16
=$1,200×$16/$10
=$19,200/$10
=$1,920
3. The demand would be inelastic. Inelastic demand is when the demand of buyers does not change as much as changes in price.
4. Achieve level of sales target. This is when management wanted to know the sales level at which targeted profit will be achieved.
Formula
Fixed costs + Target profit/Contribution per unit
Solution.
=Fixed costs + Target profit/(Selling Price - Variable costs)
= $1,200 + $800/($16-$6)
=$1,200 + $800/($10)
=$2,000×/$10
=$200
=200 cases would needed to sell
Answer: B. $900; $1000
Explanation: This would be the answer because you are spending more than you can afford to pay, and are likely being the victim of predatory lending.
Answer: False
Explanation:
Beaten paths are the routes that have previously been taken by friends, family or relatives. From the question, we are told that the existence of "beaten paths" tends to discourage immigration because of the perception that job prospects have been exhausted.
This is wrong. It should be noted that that the existence of beaten paths does not discourage people from migrating but rather encourages people as there are better job prospects.
Answer:
5% and 4.55%
Explanation:
The computation is shown below:
Given that
Tax rate = 35%
High-quality municipal bond rate = 5%
High-quality corporate bond rate = 7%
So, by the above information
The Tax-exempt municipal bond is the same that is given in the question i.e 5%
And, the after-tax return on the corporate bond is
= Corporate bond interest rate × (1 - tax rate)
= 7% × (1 - 0.35)
= 7% × 0.65
= 4.55%
Moreover, there is no interest earned on a municipal bond after coming of the sixteenth amendment