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Rina8888 [55]
2 years ago
11

Kuhn Bicycle Company has been manufactring its own seats for its bicycles. The company is currently operating at 100% capacity,

and variable manufacturing overhead is charged to production at the rate of 60% of direct labor cost. The direct materials and direct labor cost per uniit to make the bicycle seats are $8.00 and $9.00, respectively. Normal prodction is 50,000 bicycles per year.A supplier offers to make ths bicycle seats at a price of $21 each. If the bicycles company accepts this offer, all variable manufacturing costs will be elimated, but the $30,000 of fixed manufacturing overhead currently being charged to the bicycle seats will have to be absorbed by other products.1. Prepare the incremental analysis for the decision to make or buy the bicycle seats.2. Should Kuhn Bicycle Company buy the seats from the outside supplier? Justify your answer?
Business
1 answer:
AfilCa [17]2 years ago
8 0

Answer:

It is cheaper to buy the seats.

Explanation:

Giving the following information:

The company is currently operating at 100% capacity, and variable manufacturing overhead is charged to production at the rate of 60% of direct labor cost. The direct materials and direct labor cost per unit to make the bicycle seats are $8.00 and $9.00, respectively. Normal production is 50,000 bicycles per year. A supplier offers to make the bicycle seats for $21 each. If the bicycle company accepts this offer, all variable manufacturing costs will be eliminated, but the $30,000 of fixed manufacturing overhead currently being charged to the bicycle seats will have to be absorbed by other products.

Make in house= [8 + 9 + (9*0.6)]*50,000= $1,120,000

Buy= 21*50,000= $1,050,000

It is cheaper to buy the seats.

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What would chester corporation's market capitalization be if the current price rose 10%? select: 1save answer $84.9 million $77.
taurus [48]

Answer:

market capitalization = current stock price x total stocks outstanding.

Since we are not given neither the total number of shares outstanding or current stock price, we can use another question as an example.

In the other question, the total number of outstanding shares was 3,225,987 and the current stock price is $20.76. So the current market cap = 3,225,987 x $20.76 = $66,971,490

If the stock price increases by 10% (to $22.836), then Chester's market cap = 3,225,987 x $22.836 = $73,668,639 or $73.7 million.

You can follow the example to determine the market cap in your question.

5 0
2 years ago
Legal action against a company may likely NOT be incurred when ________. a. employees incur injuries during training conducted b
Black_prince [1.1K]

Answer:

c) the company uses small amounts of copyrighted material

Explanation:

According to the fair use doctrine, the government of the US permits uses of the copyrighted material if the amount of copyrighted material is in very small amount and also does not constitutes to unfair advantage over the company which has copyrighted the material formula. Whereas on the other hand, the employer will face legal action if the employee faces any injury at work and this is well addressed in employees right act.

Furthermore, age descrimination is a illegal act so the company will again face legal actions in this case too.

7 0
2 years ago
24. An American soldier stationed in North Carolina receives a paycheck from the federal government for $300, which she uses to
FrozenT [24]

Answer:

$200

Explanation:

GDP refers to the total value of all goods and services produced in a country in a period. Economists consider all products regardless of who manufactured them. Only finished consumer goods and services are counted to avoid double counting.

In the scenario, only the fruits and vegetables will add to the US GDP. They are finished consumer goods produced within the borders of the US. If they were capital goods, they would not be included in GDP calculations. The $100 spent on MP3 will not count because the item was not produced in the US. It is an import. Its value will be adjusted against exports when calculating GDP.

4 0
2 years ago
Lithium, Inc. is considering two mutually exclusive projecLithium, Inc. is considering two mutually exclusive projects, A and B.
just olya [345]

Answer:

  • The modified internal rate of return for PROJECT A:

b. 24.18%

  • The internal rate of return for Project B :

b. 35.27%.

Explanation:

The mean difference between the MIRR and the IRR it's that the IRR assumes that the obtained positive cash flows are reinvested at the same rate at which they were generated, while the MIRR considers that these cashflow will be reinvested at the external rate of return, this case 10%.

Project A  Y1             Y2

-$95,000  $65,000   $75,000  

24,18% MIRR  

Project B  -$120,000  

Y 1             $64,000  

Y 2            $67,000  

Y 3            $56,000  

Y 4            $45,000  

TIR 35,27%

4 0
2 years ago
Healthy Foods just paid its annual dividend of $1.62 a share. The firm recently announced that all future dividends will be incr
Irina18 [472]

Answer:

Option (d) is correct.

Explanation:

P0 = D1 ÷ (ke - g)

Where,

P0 is the price = ?

Currently dividend paid, D0 = $1.62 a share

ke is the required return = 15.70%

g is the growth rate = 2.10%

D1 is the dividend at end of year:

= D0 × (1 + g)

= $1.62 × (1 + 0.021)

= $1.62 × 1.021

= $1.65402

Therefore,

P0 = 1.65402 ÷ (15.7% - 2.1%)

     = 1.65402 ÷ (13.6%)

     = $12.16

Therefore, the price of one share of this stock is $12.16

4 0
2 years ago
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