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2 years ago

LO 2.1Explain how the income statement of a manufacturing company differs from the income statement of a merchandising company.

Business

1 answer:

marshall27 [118]2 years ago

7 0

Answer:

Revenue: The revenue of Manufacturing company comes from the sale of the products that they manufacture. However the merchandising company purchases goods from manufacturing companies and distribute them to make it easier for the customer to access the product and earn a profit on it which increases the cost of the product to end consumer. The contract between the manufacturing and merchandising company can be an agreement of principal and agent. In this case, the revenue for the merchandising company would be commission earned from manufacturing company. This commission paid to merchandising company will be cost to manufacturing company.

Cost of Sale: Now the raw material costs plus depreciation of production machinery plus direct labour plus variable Overhead cost plus if their is any commission paid for sale of finished goods will be the cost of sale for manufacturing company. Whereas in the case of Merchandising company, the cost of sale will be only the cost of goods they sold in the year. The depreciation charge will be minor in merchandising company as they don't have any production machineries.

These the are major difference between manufacturing and merchandising company.

Explanation:

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TufStuff, Inc., sells a wide range of drums, bins, boxes, and other containers that are used in the chemical industry. One of th

kozerog [31]

Answer:

It is more convenient to produce in house. But, the best option would be to produce 2,875 units and buy the rest of 3,375 demand.

Explanation:

Giving the following information:

Cost per drum:

Direct materials $45.40

Direct labor ($18 per hour) 4.50

Manufacturing overhead 4.05

Selling and administrative expense 16.30 70.25

Margin per drum $ 104.75

Management believes 3,375 WVD drums could be sold each year if the company had sufficient manufacturing capacity.

Harcor Industries, Inc., a supplier of quality products, would be able to provide up to 1,800 WVD-type drums per year for $130 per drum.

We will assume that the selling cost will remain whether it is purchased or make in house.

Make in house:

Unitary cost= 45.40 + 4.5 + 4.05 + 70.25= $124.2

Buy= $130

Gross profit (make in house)= 175 - 124.2 - 16.3= 34.5

Gross profit (buy)= 175 - 130 - 16.3= 28.7

It is more convenient to produce in house. But, the best option would be to produce 2,875 units and buy the rest of 3,375 demand.

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2 years ago

________ asserts that our genes set the boundaries within which we can operate, and our environment interacts with our genes to

borishaifa [10]

Range of reaction asserts that our genes set the boundaries within which we can operate and our environment interact with our genes

Explanation:

Range of reaction is that the characteristics that are expressed in the individuals are the results of the change in the both genetic characters and the changes that occur in the environment

They are also influenced by other factors like that the things to which they are exposed and the rate at which they occur if the father is a foot ball player the child is also automatically exposed to that environment which alters the phenotype of the child

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2 years ago

Label demand as elastic, unit elastic, or inelastic for each scenario. Use the midpoint method when applicable to calculate the

oksian1 [2.3K]

Answer:

Contain Yourself!, a plastic container company, raises the price of its signature Lunchbox container from $3.00 to $4.00 . As a result, the quantity sold drops from 20,000 to 15,000 = unit elastic
Economists working for the United States have determined that the elasticity of demand for gasoline is 0.5 = inelastic
Capital Metro decides to increase bus fare rates from $2.00 to $2.21 . Consequently, the number of passengers who decide to take the bus in Austin drops from an average of 70,000 riders a day to an average of 61,000 riders a day = elastic

Explanation:

The demand for unit elasticity is an intermediate situation between an elastic and an inelastic demand curve, in which the price elasticity is equal to one, which means that given variations in the price, the total income does not change (price per quantity). Eslasticity=1
Demand is inelastic when the percentage variation of the quantity demanded is less than the percentage variation of the price. Elasticity less than 1
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2 years ago

The supply of product x is elastic if the price of x rises by

garri49 [273]

The answer to this question is <span>5% and the quantity supplied rises by 7%.
A product is considered as elastic if the change in prices will also affect the changes in total supply.
Usually, this type of products are not considered unique or rare and there are a lot of substitute for this product in the market</span>

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2 years ago

Vanguard has an overall (composite) WACC of 10%, which reflects the cost of capital for its average asset. Its assets vary widel

Svetradugi [14.3K]

Answer:

The projects which maximize Vanguard's shareholder wealth are Project A; Project B; Project D.

Explanation:

Projects which maximize the shareholder value are projects delivering Expected Returns which are higher than its risk-adjusted weighted average cost of capital (WACC).

As a result, Project A with Expected return of 15% and risk adjusted WACC of 12%; Project B with Expected return of 12% and risk adjusted WACC of 10%; Project D with Expected return of 9% and risk adjusted WACC of 8%; are the projects that maximize the shareholder's value.

On the other hand, Project C with Expected return of 11% and risk adjusted WACC of 12% is harmful to shareholder value.

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2 years ago