Answer:
Effect on income= $120,000 loss
Explanation:
Giving the following information:
Sales $320,000
Variable costs $200,000
Fixed costs $140,000.
None of the fixed costs are avoidable. Therefore, they shouldn't be taken into account to make the decision.
Effect on income= Sales - varaible cost
Effect on income= 320,000 - 200,000= $120,000 loss
Answer:
D.neither short- nor long term investment
Answer:
a. Regulatory compliance costs - Fixed cost
b. Salaries of top management and key personnel - Fixed cost
c. Cost of metal used in manufacturing - Variable cost
d. Cost of wood used in manufacturing - Variable cost
e. Mortgage payments - Fixed cost
f. Industrial equipment costs - Fixed cost
g. Interest on debt - Fixed cost
h. Postage and packaging costs - Variable cost
Explanation:
The cost which is affected by the production of units is known as variable cost. The cost which does not vary with the units produced is fixed cost. Fixed cost does not change from period to period irrespective of level of output and is usually same for a certain period. It is easy to budget for fixed costs instead of variable cost. Variable cost changes every period and is based on company's output.
Answer:
E. The aftertax salvage value is $81,707.76.
Explanation:
The computation is shown below:
Accumulated depreciation is
= $287,000 × ( .2 + .32 + .192 + .1152)
= $237.406.40
Now the book value is
= Purchase value - accumulated depreciation
= $287,000 - $237,406.40
= $49,593.60
And, the selling value is $99,000
So after tax salvage value is
= Salvage value - (Salvage value - book value) × tax rate
= $99,000 - ($99,000 - $49,593.60) × 35%
= $81,707.76.
