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2 years ago

In a sell or process further decision, which of the following costs is relevant?

Business

1 answer:

Alona [7]2 years ago

6 0

Answer: a. Only I

Explanation:

In a sell or process further decision, the only cost that is relevant is the variable production cost that is incurred after split-off.

It should be noted that a split-off is when the parent company of an organization uses specified terms to divests its business unit

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Champagne, inc., had revenues of $12 million, cash operating expenses of $8 million, and depreciation and amortization of $1.5 m

Hoochie [10]

The free cash flow can be calculated as below:

Revenue 12000000

Less: Expense (8000000)

Less: Depreciation (1500000)

Earnings Before Tax 2500000

Less Tax (750000)

Earnings after tax 1750000

Add Depreciation 1500000

Total Cash Earnings 3250000

Less: Change in Working Capital (500000)

Less : Purchase of Asset (700000)

Free Cash Flow 2050000

Thus Free Cash Flow can be calculated as above.

4 0

2 years ago

Jill took $50,000 that she had in savings and started her own business. If left in investments she would have earned $5,000 this

vova2212 [387]

Answer: Economic cost = $175,000

Accounting cost = $100,000

Explanation: The difference between economic cost and accounting coast is economic cost takes into consideration the next best alternative foregone, that is, opportunity cost whereas accounting cost only sums cost incurred. In the given case the interest on savings and salary of job is the opportunity cost of Jill.

Therefore,

Economic cost = $5000 + $70,000 + $80,000 + $40,000 - $20,000=$175,000

Accounting cost = $80,000 + $20,000 = $100,000

7 0

2 years ago

If gasoline taxes were significantly increased in the united states, then select one:

zmey [24]

If gasoline taxes were significantly increased in the united states, then all of the above. It is likely that roads would become safer and the environment would become cleaner, other taxes, such as income taxes, could be lowered and some of the government regulations that require automakers to produce more fuel-efficient cars would become unnecessary.

If the government were to impose higher taxes on gasoline all of these outcomes could happen because they all relate to the use of gasoline and how it hurt our environment. If less people were using the gas, more eco friendly vehicle options would likely be on the market.

4 0

2 years ago

School Days Furniture, Inc., manufactures a variety of desks, chairs, tables, and shelf units which are sold to public school sy

Blababa [14]

Answer:

Production Budget ( July August September) 5200, 6300, 9000

Sales Budget ( July August September) $ 300,000 $ 360,000 $ 450,000

Direct Materials Budget ( July August September) $ 31860 $ 39,420 $ 48,600

Direct Materials Units Budget ( July August September) 53,100 65,700 81,000

Direct Labor Budget ( July August September) $ 163,800 $ 198450 $ 283,500

Direct Labor Hours Budget ( July August September)7800 9450 13500

Explanation:

The formula used are

1) Production Budget = Sales + Desired Ending Inventory Less Opening Inventory

2) Sales Budget= Sales * Price Per unit

3) Raw Materials Budget = Production + Desired Ending Inventory Less Opening Inventory

Raw Materials Costs= Raw Materials Budget * Costs

4) Direct Labor Hours Budget = Production * Direct Labor Hours

Direct Labor Budget = Direct Labor Hours Budget* Wages Per Hour

School Days Furniture, Inc.

Production Budget

July August September

Sales 5000 6000 7500

+ Desired

Ending Inventory 1200 1500 ------(assuming zero inv)

Less Opening

Inventory 1000 1200 1500

Production Budget 5200 6300 9000 

Production Budget = Sales + Desired Ending Inventory Less Opening Inventory

School Days Furniture, Inc.

Sales Budget

July August September

Sales 5000 6000 7500

Price Per unit $ 60 $60 $ 60

Sales Budget $ 300,000 $ 360,000 $ 450,000 

Sales Budget= Sales * Price Per unit

School Days Furniture, Inc.

Raw Materials Budget

July August September

Production Budget 5200 6300 9000

+ Desired

Ending Inventory 630 900 ------(assuming zero inv)

Less Opening

Inventory 520 630 900

Materials Requiremnt 5310 6570 8100 

Board (feet) 10 10 10

Direct Materials 53,100 65,700 81,000

Plank Costs 0.60 0.60 0.60

Direct Materials $ 31860 $ 39,420 $ 48,600 

Raw Materials Budget = Production + Desired Ending Inventory Less Opening Inventory

Raw Materials Costs= Raw Materials Budget * Costs

School Days Furniture, Inc.

Direct Labor Budget

July August September

Production Budget 5200 6300 9000

Direct Labor hours 1.5 1.5 1.5

Direct Labor Hours 7800 9450 13500

Wages Per hour $ 21 $ 21 $21

Direct Labor Budget $ 163,800 $ 198450 $ 283,500

Direct Labor Hours Budget = Production * Direct Labor Hours

Direct Labor Budget = Direct Labor Hours Budget* Wages Per Hour

4 0

2 years ago

Suppose Friendly Airlines is considering signing a long-term contract with the union representing its pilots. Friendly Airlines

lesantik [10]

Answer:

This would harm the union and favor Friendly Airlines because the real wage increase would now be low.

Explanation:

With an increase in inflation more than was expected, it will be bad for the union but will be good for Friendly Airline because the higher the rate of inflation, the lower the real wages. The implication of this is that Friendly Airline can afford to increase its fare because of the high inflation rates, and due to inflation the union will not have any increase in wages.

3 0

2 years ago