2. Gross domestic product that has been adjusted for inflation is known as

Blue Ridge Bicycles uses a standard part in the manufacture of several of its bikes. The cost of producing 45,000 parts is $14

Morgarella [4.7K]

Answer:

$2.07 per unit

Explanation:

Currently 45,000 units produced

total cost= $72,000 (variable) + $70,000 (fixed) = $142,000

average total cost per unit = $142,000 / 45,000 units = $3.16 per unit

if the company outsources the production of the part:

total cost = $72,000 + ($70,000 x 30%) = $72,000 + $21,000 = $93,000

average total cost per unit = $93,000 / 45,000 units = $2.07 per unit

if Blue Ridge spends more than $2.07 per unit, it will be spending more money by outsourcing the part than by producing it.

e.g. $2.10 per unit

total costs = ($2.10 x 45,000) + ($70,000 x 70%) = $94,500 + $49,000 = $143,500 which is higher than $142,000.

3 0

2 years ago

A company has budgeted direct materials purchases of $300,000 in July and $480,000 in August. Past experience indicates that the

enyata [817]

Answer: $696,000

Explanation:

Given the following;

JULY direct material purchase = $300,000

AUGUST BUDGET

direct material purchase =$480,000

Selling and administrative expenses = $48,000

Depreciation expense = $36,000

Purchase of office equipment = $72,000

Wages expenses = $150,000

Only 70% of the amount of purchases made in a month being paid that month. The remaining 30% paid the next month

Therefore, total Budgeted cash disbursement for the month of August will include ;

30% of July purchase

0.3 × $300,000 = $90,000

70% of August direct material

0.7 × $480,000 = $336,000

Wage expense = $150,000

Office equipment purchase =$72, 000

Selling and administration expenses = $48,000

= $(90,000 + 336,000+ 150,000+72,000+ 48,000) = $696,000.

3 0

1 year ago

Doyle’s Candy Company is a wholesale distributor of candy. The company services groceries, convenience stores and drugstores in

luda_lava [24]

Answer:

a) 275,000 boxed per year

b) sales price of $ 11.04

c)  sale volume in dollars 4.830.967,74

Explanation:

selling price: $ 9.60

Variable cost: $ 5.76

Contribution: $ 3.84

Contribution Ratio: 3.84 / 9.60 = 40%

$\frac{Fixed\:Cost}{Contribution \:Margin} = Break\: Even\: Point_{units}$

1,056,000 / 3.84 = 275,000

If Variable cost increase by 15%

To keep contribution ratio at 40% then selling price should be:

(X - 5.76 x 1.15) / X = 0.40

X = $ 11.04

To keep the same income but without changing price:

current income: (sales x contribution less fixed cost)

(390,000 x 3.84 - 1,056,000) = 441,600

contribution: (9.60 - 5.76 x 1.15) / 9.60 = 0.31

$\frac{Fixed\:Cost + Target \: Income}{Contribution \:Margin} = Break\: Even\: Point_{units}$

(1,056,000 + 441,600)/ 0.31 =

1.497.600‬ / 0.31 = 4.830.967,74

8 0

2 years ago

For each of the following events, identify which of the determinants of demand or supply are affected. If demand is unaffected b

Ratling [72]

Answer:

(1) Demand Determinant - No. of buyers

Supply Determinant - None

When people decided to have more children then this will result in more number of buyers. This will affect the demand for a particular good and shifts the demand curve towards right.

(2)Supply Determinant - Input prices

Demand Determinant - None

Steel is an input for the firms and if there is an increase in the price of steel then as a result cost of production increases which results in lower supply for their product.

(3) Supply Determinant - Technology

Demand Determinant - None

New technology will increase the productivity of the firms and hence, increase the supply of the products.

(4) Demand Determinant - Price of substitute or complimentary goods

Supply Determinant - None

If the price of substitute good rises then as a result demand for minivans increases. This will shift the demand curve rightwards.

(5) Demand Determinant - Income

Supply Determinant - None

Decrease in the wealth of the consumers will result in lower demand for the minivans. Therefore, demand curve shifts leftwards.

3 0

1 year ago

Rivoli Inc. hired you as a consultant to help estimate its cost of capital. You have been provided with the following data: D0 =

Illusion [34]

Answer:

9.5%

Explanation:

The formula to compute the cost of common equity under the DCF method is shown below:

= Current year dividend ÷ price + Growth rate

In first case,

The current dividend would be

= Last year dividend + last year dividend × growth rate

= $0.80 + $0.80 × 8%

= $0.80 + $0.064

= $0.864

The other things would remain the same

So, the cost of common equity would be

= $0.864 ÷ $57.50 + 8%

= 0.015026 + 0.08

= 9.5%

6 0

2 years ago