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Reptile [31]
2 years ago
14

A study has been conducted to determine if Product A should be dropped. Sales of the product total $500,000; variable expenses t

otal $340,000. Fixed expenses charged to the product total $210,000. The company estimates that $60,000 of these fixed expenses are not avoidable even if the product is dropped. If Product A is dropped, the annual financial advantage (disadvantage) for the company of eliminating this product should be:
(A) ($10,000)
(B) $10,000
(C) ($50,000)
Business
1 answer:
Eduardwww [97]2 years ago
7 0

Answer:

(A) ($10,000)

Explanation:

This is the actual situation with the product A on production.

500.000,00  Sales of the product total

-340.000,00  variable expenses total

-210.000,00  Fixed expenses charged to the product total  

-50.000,00  Income

If the product A is dropped the company not loose anymore the ($50,000) of income but the company must pay the $60,000 of fixed expenses, so the company will have a disadvantage of ($10,000).

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At a production level of 5,150 units, a project has total cash costs of $130,789. The variable cost per unit is $11.07, and the
Sphinxa [80]

Answer:

d. $73,778.50

Explanation:

Variable Cost = $11.07 per unit x 5,150 units = $57,010.50

Total Cost = $130,789

Fixed Cost = Total Cost - Variable Cost

Fixed Cost = $130,789 - $57,010.50

Fixed Cost = $73,778.50

Since Depreciation is the Fixed Cost and we have been given the Total Cost of the Project, so the Depreciation is already included in the Fixed Cost.

Hence Total Fixed Cost is equal to $73,778.50.

3 0
2 years ago
You have been working on a new entrepreneurial venture with a few friends for the past year. Everyone’s efforts are really start
brilliants [131]

Answer:

A. determining a few key ideas and how to best sequence them.

Explanation:

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4 0
2 years ago
Andrew has been asked to estimate future cash flows for his company. He is having a hard time remembering how to estimate future
Sonja [21]

Answer: Andrew should look to find the information in SFAC No. 7. The level of the conceptual framework that his new knowledge will apply to is level 3.

Explanation:

From the question, we are informed that Andrew has been asked to estimate future cash flows for his company and that he is having a hard time remembering how to estimate future cash flows from his accounting classes.

Andrew should look to find the information in SFAC No. 7. The level of the conceptual framework that his new knowledge will apply to is level 3.

7 0
2 years ago
A regional car dealership began running mass marketing TV advertisements emphasizing its high-end luxury vehicles. The region th
miss Akunina [59]

Answer:

a. the advertisements wasted money and time because they were not targeted properly

Explanation:

The advertisement is not well targeted, with the increased unemployment in this region and the fact that the major source of economic wealth ( the beer manufacturer) has been bought and relocated, means the economy is not well profiled for the luxury cars that are advertised.

The company should first of all do it's research to gauge how well profiled the residents of the economy is to their products.

Ideally the target if the advertisement should be a thriving economy where there is excess cash to purchase luxury goods.

6 0
2 years ago
A company uses the departmental overhead rate method. Total overhead costs are $5,000,000. Of this total, the machining departme
monitta

Answer:

Estimated manufacturing overhead rate= $50 per machine hour

Explanation:

Giving the following information:

The machining department uses machine hours as its allocation base and has 80,000 machine hours. The machining department is assigned overhead costs of $4,000,000.

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base= 4000000/80000= $50 per machine hour

4 0
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