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A company's product sells at $12 per unit and has a $5 per unit variable cost. The company's total fixed costs are $98,000. The

lara31 [8.8K]

Answer:

The contribution margin per unit is $7

Explanation:

The contribution margin per unit can be defined as the difference between the selling price per unit and the variable cost per unit.

Contribution margin per unit = Selling price - Variable cost

Contribution margin per unit = $12 - $5

Contribution margin per unit = $7

The contribution margin per unit is $7

6 0

3 years ago

If the minimum attractive rate of return is 7%, which alternative should be chosen assuming identical replacement (like kind exc

ira [324]

Answer:

The alternative that should be chosen assuming identical replacement is:

Alternative B.

Explanation:

a) Data and Calculations:

Alternatives:

A B

First Cost $5,000 $9,200

Uniform Annual Benefit $1,750 $1,850

Useful life, in years 4 8

Rate of return 7% 7%

Annuity factor 3.387 5.971

Present value of annuity $5,927.25 $11,046.35

Net cash flow $927.25 $1,846.35

b) Alternative B yields a higher return than Alternative A. Since the two alternatives are based on the same rate of return, Alternative B will bring in a higher annual benefit, even when discounted to the present value.

7 0

3 years ago

Helmway company purchased equipment and these costs were incurred: cash price $21,500 sales taxes $1,800 insurance during transi

Artyom0805 [142]

Presto will record the acquisition cost of the equipment as $22,250 (21,500+430+320) which is the total cost for making the fixed asset ready for operation. The Generally accepted accounting principle requires a company to record all of the acquisition cost of a fixed asset. Thus, Presto company must capitalize all cost related to the fixed asset.

5 0

3 years ago

Stephanie is a twelve-year-old who often assists neighbors on weekends by babysitting their children. Calculate the 2013 standar

Delicious77 [7]

Answer:

a) $1,200

b) $1,850

c) $6,200

Explanation:

First ,we are to determine Stephanie's claims based on different circumstances using the 2013 standard deduction

a) Reported $850 earnings from babysitting - claim 1,200

For 2013, the minimum standard deduction is $1,000, hence Stephanie is able to claim the greater of the following two: The minimum standard deduction of $1,000 or her earned income of $850 + $350 which is $1,200. Stephanie can claim $1,200

b) Reported $1500 - Claim $1,850

For 2013, the minimum standard deduction is $1,000, hence Stephanie is able to claim the greater of the following two: The minimum standard deduction of $1,000 or her earned income of $1500+ $350 which is $1,850. Stephanie can claim $1,850

c) reported $6,200 - Claim $6,200

For 2013, the minimum standard deduction is $1,000, hence Stephanie is able to claim the greater of the following two: The minimum standard deduction of $1,000 or her earned income of $6200+ $350 which is $6,550. However, she can only claim $6,200 because as a 2013 the maximum standard deduction for a single person which is her filing status is $6,200

8 0

3 years ago

Bond investors will experience capital gains when Group of answer choices market interest rates are high and falling. market int

solong [7]

Answer:

A) market interest rates are high and falling

Explanation:

Bonds and interest rates have an indirect relationship. When interest rates rise, bond prices tend to fall.

Bonds pay interests on a fixed rate. When market interest rates are rising, investors will prefer investing in other options due their high return as opposed to the fixed returns from bonds. Bonds become less attractive, leading to a decline in prices.

Buying Bonds when the interests are rising means buying at a cheaper rate. When interest rates start falling, bond prices will rise again due to their inverse relationship.

Capital gains occur when an investment is bought at a lower price and sold at a higher price. Buying bonds when interests rate is high and selling when interests are low will lead to capital gains.

3 0

4 years ago