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Feliz [49]
2 years ago
13

Eaton Tires manufactures tires for dune buggies and has two different products, nubby tires and smooth tires. The company produc

es 5,000 nubby tires and 10,000 smooth tires each year and incurs $172,000 of overhead costs. The following information is available:
Activity Total Cost Cost Driver
Materials handling $60,000 Number of requisitions
Machine setups 55,000 Number of setups
Quality inspections 57,000 Number of inspections
For the nubby tires, the company has 400 requisitions, 200 setups, and 200 inspections. The smooth tires require 600 requisitions, 300 setups, and 400 inspections.
Determine the overhead rate for each activity.
Business
1 answer:
saw5 [17]2 years ago
4 0

Answer:

Materials handling= $60 per requisition

Machine setups= $110 per setup

Quality inspections= $95 per inspection

Explanation:

<u>To calculate the predetermined manufacturing overhead rate we need to use the following formula:</u>

<u></u>

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Materials handling= 60,000/1,000= $60 per requisition

Machine setups= 55,000/500= $110 per setup

Quality inspections= 57,000/600= $95 per inspection

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alekssr [168]

Answer: Option A which is the Dealership 0% financing option will be preferable if the Price of the car is less than the different of Loan monthly Payments minus Rebates.

Explanation:

OPTION 1

A buyer pays 60 monthly instalments and the interest rate is 0%. This tells us that there is no interest the value of the debt (Which is the price of 2003 Protege S hatchback) will not increase over the period of 60%, with this option time value of money is not considered.

Option 2

The buyer receives a Rebate of $3600 if the car is paid for in cash. The buyer qualifies for a loan at an effective rate of 7% per annum. The amount of a loan will be the Price of a 2003 Protege S Hatchback. Assuming the Loan will also ave a period of 60 months, The Total amount Payable over the period of 60 months equals Loan Monthly  payments multiplied by 60 months. The buyer receives a rebate of $3600, therefore The Net Amount Payable for Option 2 financing is found by multiplying Loan monthly payments by 60 months then subtract the Cash Rebate received of $3600

Let us now compare the two options to find out how Large must the Car be for option A to be preferable.

Y = The Price of a 2003 Protege Hatch Back, Which also equals the amount of debt over a period of 60 years (option A has no interest)

Monthly Payments of a loan = P

number of Periods = 60 months

Debt in 60 months  versus Loan payments multiplied by 60 months - rebate

Therefore Y ∠ P x 60 months - $3600

Option A which is the Dealership 0% financing option will be preferable if the Price of the car is less than the different of Loan monthly Payments minus Rebates.

8 0
2 years ago
A 25 percent decrease in the price of breakfast cereal leads to a 20 percent increase in the quantity of cereal demanded. As a r
krok68 [10]

Answer:

B. total revenue will decrease.

Explanation:

The initial revenue for breakfast cereal is given by the product between the price of cereal (P) and the demanded quantity (D):

R_1 = P*D

After a 25% decrease in price and a 20% increase in demand, the new revenue will be:

R_2 =(1-0.25) P*(1+0.20)D\\R_2 = 0.9P*D\\R_2=0.9R_1

The new revenue is 90% of the original revenue; therefore, total revenue will decrease.

7 0
2 years ago
Country A has an absolute advantage over Country B in the production of both soybeans and corn. Explain a scenario in which both
Genrish500 [490]
This is a key idea with international trade.  This involves what is known as comparative advantage.
let's say country A can produce a ton of soybeans in 4 hours and a ton of corn in 2 hours.  While country B can produce a ton of soybeans in 15 hours and a ton of corn in 5 hours.  
Looking at this set up you can see that country A can produce both corn and soybeans faster, so they have an absolute advantage in both!
However what trade is based on is opportunity cost.  So if we think about how much corn country A has to give up to produce soybeans, they have to divert a total of 4 hours from corn to soy beans to produce one ton of soy beans.  That 4 hours could be used to produce 2 tons of corn (since 2 hours for 1 ton and we're taking away 4 hours!).  So opportunity cost of soybeans in country A is 2 corn.
In country B they would need a total of 15 hours to produce one extra ton of soybeans, but those 15 hours could instead be used to produce 3 tons of corn (5 hours per ton and we're stealing 15 total hours).  That means country B's opportunity cost is 3 corn.
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3 0
2 years ago
Suppose you study a group of successful companies and you find that they emphasize customer focus, or quality improvement, or em
mario62 [17]
I'm just gonna say this i don't think they care at all
8 0
2 years ago
Suppose that the firm you manage faces the following costs:
zysi [14]

Answer:

d. $3

Explanation:

Quantity       Total Cost             Fixed cost     Total var.       marginal cost

0                         $3                          $3                    0                   0

1                          $5                          $3                  $2                  $2

2                         $7                          $3                    $4                  $2

3                         $10                        $3                    $7                  $3

4                         $15                       $3                    $12                 $5

the variable cost of the third unit is equal to the marginal cost of producing it.

6 0
2 years ago
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