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Strike441 [17]
2 years ago
12

Oriole, Inc. currently manufactures a wicket as its main product. The costs per unit are as follows: Direct materials and direct

labor $17 Variable overhead 5 Fixed overhead 8 Total $30 Saran Company has contacted Oriole with an offer to sell it 4900 of the wickets for $24 each. If Oriole makes the wickets, variable costs are $22 per unit. Fixed costs are $8 per unit; however, $5 per unit is unavoidable. Should Oriole make or buy the wickets?
Business
1 answer:
algol132 years ago
3 0

Answer:

Oriole should buy the wickets.

Explanation:

The variable cost of producing wickets is $22/unit.

The fixed cost of production is $8/unit.

The total cost of producing wickets is $30/unit.

Saran company offers to sell 4900 units of wickets at $24.

If wickets are purchased it will cost $24/unit.

Since cost is lower when buying, Oriole should buy wickets.

You might be interested in
In​ 2011, the fixed costs of a company were​ $500,000, and its variable costs equaled​ $150,000. In​ 2010, the company made an a
Elina [12.6K]

Answer:

$650,000

Explanation:

The total cost of a company may be grouped into fixed and variable cost. The fixed cost remains constant at a given range of activity levels while the variable cost increases proportionately as the level of activities.

The total variable cost is the product of the unit variable cost and the number of units produced.

Hence, total cost in 2011

= $500,000 + $150,000

= $650,000

4 0
2 years ago
Praetorian Industries will pay a dividend of $2.50 per share this year and has an equity cost ofcapital of 8%. Praetorianʹs stoc
Alenkinab [10]

Answer:

The best next step that the investor should take regarding Praetorianʹs stock is C. Revise her estimate of Praetorian's Dividend Growth

Explanation:

Consider the following calculations

Price = D (1+g)/ (r-g) = 2.5*(1.05)/(0.08-0.05) = $ 87.5

Hence, the stock is underpriced at $ 84 per share .

6 0
2 years ago
Diogo has a utility function,U(q1, q2) = q1 0.8 q2 0.2,where q1 is chocolate candy and q2 is slices of pie. If the price of slic
guapka [62]

Answer:

(0.5 \times 8q_2)+q_2=100\\\\5q_2=100\\\\q_2=20

since q_2 = 20

q_1 = 8*20\\\\q_1=160

Explanation:

U(q₁ q₂)

q_1^{0.8}q_2^{0.2}\\\\P_1= \$0.5 \ P_2=\$1 \ Y=100

Budget law can be given by

P_1q_1+P_2q_2=Y\\\\0.5q_1+q_2=100

Lagrangian function can be given by

L=q_1^{0.8}q_2^{0.2}+ \lambda (100-0.5q_1-q_2)

First order condition csn be given by

\frac{dL}{dq} =0.8q_1^{-0.2}q_2^{0.2}-0.5 \lambda=0\\\\0.5 \lambda=0.8q_1^{-0.2}q_2^{0.2}---(i)

\frac{dL}{dq} =0.2q_1^{0.8}q_2^{-0.8}- \lambda=0\\\\ \lambda=0.2q_1^{0.8}q_2^{-0.8}---(ii)

\frac{dL}{d \lambda} =100-0.5q_1-q_2=0\\\\0.5q_1+q_2=100---(iii)

From eqn (i) and eqn (ii) we have

\frac{0.5 \lambda}{\lambda} =\frac{0.8q_1^{-0.2}q_2^{0.2}}{0.2q_1^{0.8}q_2^{-0.8}} \\\\0.5=\frac{4q_2}{q_1}\\\\q_1=8q_2}

Putting q_1=8q_2 in euqtion (iii) we have

(0.5 \times 8q_2)+q_2=100\\\\5q_2=100\\\\q_2=20

since q_2 = 20

q_1 = 8*20\\\\q_1=160

3 0
2 years ago
Jackson Electric Services Company incurred​ $800 as a repair expense and paid for it in cash. The company is a sole proprietorsh
almond37 [142]

Answer: Option D

Explanation: Owners equity refers to the amount of funds made available by the owners to operate the business activities. It includes initial capital invested and profits generated for the period

In the given case, the expense of $800 did not bring any assets or liabilities to the entity. Such an expense will be recorded in income statement leading to decrease in profits, thus, resulting in decrease in owners equity.

5 0
2 years ago
Drew buys 100 shares of Balsamic Corporation for $23 per share. Over the next year, Balsamic pays four quarterly dividends of 35
lara31 [8.8K]

Answer:

14.78%

Explanation:

Drew's total investment = $23 x 100 = $2,300

during the year he received 4 dividend payments = 4 x 100 shares x $0.35 per share = $140

since the stock price increased, Drew's investment is now worth $2,500

if Drew was to sell his stocks, he would earn $200 + the $140 received as dividends = $340

Drew's annual return = $340 / $2,300 = 14.78%

4 0
2 years ago
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