Answer:
The answer is b. Up to $4 million.
Explanation:
It is critical to recognize that $3 million already spent on developing the product is the sunk cost, which is irrelevant cost that should not be included in the budget further spend for the new product.
As the new product is expected to generate a revenues of $4 million, the further cost should be spent on the new product development should not be exceeded the $4 million.
Thus, the answer is b. Up to $4 million is the correct choice.
Answer:
Target Selling price per unit $217.56
Explanation:
Target selling price is baseed on the Target cost incurred plus target markup.
Total Cost per unit
Direct Materials Cost $100
Direct labor $30
Variable Overhead Cost $8
Varibale Selling & Administrative cost $3
Fixed Overhead Cost (600,000/50,000) $12
Fixed Selling and Administrative(120,000/50,000) <u>$2.4</u>
Total Per unit cost <u>$155.4</u>
Target Markup = $155.4 x 40% = $62.16
Target Price = Total cost per unit + Target Markup per unit = $155.4 + $62.16 = $217.56
Answer:
Option C. $0.11
Option D. $0.95
Explanation:
As we know that the Transfer Price is set at either selling price for an outside market or variable cost plus opportunity cost if the product sold is to internal market present within the organization (Inter group or inter division sales).
However, the division can still charge upper limit price to the division which is $1 market price of the product.
Upper limit = $1
As it is given that the selling of the additional units will be among divisions which means its inter division market. Hence the lower limit will be used here.
Lower Limit = Variable cost + opportunity cost
Here
Variable cost is $10 cents
And
Opportunity cost will be zero here as the division will be using its excess capacity to sell to the other division, so there is no opportunity cost.
So, by putting values, we have:
Lower Limit = $0.1 - $0 = $0.1
Upper limit = $1
Thus the transfer price set for each bell can be between $1 and $0.1. So the $0.11 and $0.95 falls between these range and both are correct options here.
Answer:
$160,321.89
Explanation:
The worth of the investment today can be calculated with the following formula
FV = P(1 + r )^n
Where: FV = Future Value of investment
P = Initial investment
r = Rate of interest
r = Number of years
P = $57,000
r = 9 percent = 9%
r = 12 years
FV = 57,000(1 + 9% )^12
FV = 57,000(1 + 0.09 )^12
FV = 57,000(1.09 )^12
FV = 57,000(2.812664782)
FV = $160,321.8926
FV = $160,321.89
Answer:
You should pay loan C since it does not only represent the largest monthly payment, but it also has the highest APR. The sooner you pay your credit card balance (loan C) the better.
On the other hand loan B has a smaller monthly payment and a much lower APR.
