Cold Drinks Ltd. bottles and distributes 'Cola' brand cold drinks. It operates its distribution division as a cost centre. Budgeted cost for the year ending 31 t March, 2013 is as follows: Cash Operating Costs ------------------------------------₹21,00,000
Depreciation on Fleet of Vehicles (8x₹52,500) --------------₹4,20,000
Approved Corporate Costs --------------------------------₹ 3,00,000
28,20,000
Distribution division has started operation on 1st April, 2011. Each vehicle of the fleat was acouired at a cost of ₹2,40,000 and had an estimated economic life of four years. Salvage value of each vehicle at the end of four years (March 31, 2015) was estimated at ₹30,000. Native Distributors Lid. which has countrywide network for the distribution of food and beverages has offered Cold Drinks ttd. a three year distribution contract for ₹19,50,000 each year. The contract will start on 1st April, 2012. If Cold Drinks Ltd. accepts the offer, it will close down its own distribution division, and will sell the delivery vehicles. Current (April 1, 2012) disposal price of each vehicle is estimafed at ₹ 75,000. Cold Drinks L1d. will avoid cash operating cost of ₹21,00,000. Security analysts have recommended the purchase of share of Cold Drinks Lid. security analysts are forscasting a net profit of ₹6,60,000 for 2012 - 13 as against an estimated Profit of ₹6,30,000 for 2011−12, the forecast assumes that the company will continue operation of its disiribution division.
Required (i) Tabulate a comparison of all relevant cost for next three years (2012 - 13 to 2014 - 15) for the two altematives - use of own distribution division or use of Native distributors Ltd. Recommend whether Cold Drinks Lid. should accept the offer of Native distributors Lid. (ii) Why might Cold Drinks Lid. be reluctant to accept the offer of Native distributors Lid? (ignore income - tax and time value of money. Wherever appropriate, suitable assumption to be made by you?
Answers
Note that table comparing the relevant costs for the next three years (2012-13 to 2014-15) for the two alternatives is attached accordingly.
What is the explanation for the table?The cost comparison reveals that utilizing Native Distributors Ltd. would save Cold Drinks Ltd. ₹5,30,000 compared to maintaining its own distribution division for the next three years
Despite this, Cold Drinks Ltd. may have reservations about relinquishing control, potential service quality issues, and the impact on its employees.
Ultimately, the decision to accept Native Distributors Ltd.'s offer should be carefully assessed by Cold Drinks Ltd.'s management as it carries strategic implications.
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An investment project has an initial cost of $60,000 and expected cash inflows of $12,500 , $17,800 , $21,600 , and $25,800 over years 1 to 4, respectively. If the required rate of return is 8 percent, what is the net present value?
Answers
The net present value is $5,456.25.NPV is used in capital budgeting and investment planning to analyze the profitability of a projected investment or project.
The net present value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows over a period of time. The formula for calculating NPV is:
NPV = (CF₁ / (1 + r)¹) + (CF₂ / (1 + r)²) + … + (CFₙ / (1 + r)ⁿ) - Initial Investment
Where:
CF₁, CF₂, …, CFₙ are cash inflows in periods 1 through n.
r is the discount rate.
n is the number of periods.
Initial Investment is the initial cost of the investment.
In this case, the initial cost of the investment is $60,000 and the cash inflows are $12,500, $17,800, $21,600 and $25,800 over years 1 to 4 respectively. The required rate of return is 8%. Therefore:
NPV = (-$60,000 / (1 + 0.08)⁰) + ($12,500 / (1 + 0.08)¹) + ($17,800 / (1 + 0.08)²) + ($21,600 / (1 + 0.08)³) + ($25,800 / (1 + 0.08)⁴)
NPV = -$60,000 + $11,574.07 + $15,972.22 + $17,997.10 + $19,912.86
NPV = $5,456.25. Therefore, the net present value is $5,456.25.
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On January 1, 2021, Hum Enterprises Inc. had 60,000 common shares, recorded at $360,000. The company follows IFRS. During the year, the following transactions occurred:
Apr. 1 Issued 4,000 common shares at $8 per share.
June 15 Declared a 5% stock dividend to shareholders of record on September 5, distributable on September 20. The shares were trading for $10 a share at this time.
Sep. 21 Announced a 1-for-2 reverse stock split. Shares were trading at $8 per share at the time.
Nov. 1 Issued 3,000 common shares at $18 per share.
Dec. 20 Repurchased 10,000 common shares for $16 per share. This was the first time Hum had repurchased its own shares.
Record each of the transactions. Keep a running balance of the average per share amount of the common shares.
Answers
To record each of the transactions and calculate the average per share amount of the common shares, we need to keep track of the number of shares issued, repurchased, and the average cost per share.
Here are the journal entries and the running balance for each transaction:
April 1: Issued 4,000 common shares at $8 per share.
Cash $32,000
Common Shares $32,000
Running balance:
Number of shares: 64,000
Total cost: $392,000
Average per share: $392,000 / 64,000 = $6.125
June 15: Declared a 5% stock dividend to shareholders of record on September 5, distributable on September 20. The shares were trading for $10 a share at this time.
Retained Earnings $24,000
Common Shares Dividend Distributable $24,000
Running balance:
Number of shares: 67,200
Total cost: $392,000
Average per share: $392,000 / 67,200 = $5.833
September 21: Announced a 1-for-2 reverse stock split. Shares were trading at $8 per share at the time.
No journal entry required as this is a stock split.
Running balance:
Number of shares: 33,600
Total cost: $392,000
Average per share: $392,000 / 33,600 = $11.667
November 1: Issued 3,000 common shares at $18 per share.
Cash $54,000
Common Shares $54,000
Running balance:
Number of shares: 36,600
Total cost: $446,000
Average per share: $446,000 / 36,600 = $12.190
December 20: Repurchased 10,000 common shares for $16 per share.
Treasury Shares $160,000
Cash $160,000
Running balance:
Number of shares: 26,600
Total cost: $286,000
Average per share: $286,000 / 26,600 = $10.753
At the end of the transactions, the average per share amount of the common shares is $10.753.
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answer 1,2 and 3 please
thank you!
1) Disequilibrium profit theories are represented by a combination of and 2 Points rapid decline in growth; no increase in costs rapid decline in revenues; rapid increase in costs slow decline in reve
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Disequilibrium profit theories provide insights into the dynamics of imbalanced profit structures and the potential challenges they present to a company's financial well-being.
By understanding these theories, businesses can identify the underlying causes of profit disequilibrium and take appropriate measures to restore stability and improve their profitability.
Disequilibrium profit theories are characterized by a combination of factors such as a rapid decline in growth accompanied by no increase in costs, a rapid decline in revenues coupled with a rapid increase in costs, and a slow decline in revenue. These theories highlight the imbalances that can occur within a company's profit structure and the potential consequences they can have on its financial stability.
Disequilibrium profit theories examine situations where a company experiences a lack of balance between its revenue and cost structures, leading to an unstable profit situation. One scenario described by these theories involves a rapid decline in growth without a corresponding increase in costs. In this case, the company may be facing declining demand or market saturation, resulting in a shrinking customer base and reduced sales. However, if the company's costs remain constant or do not decrease proportionately, it can lead to a decline in profitability.
Another scenario associated with disequilibrium profit theories involves a rapid decline in revenues accompanied by a rapid increase in costs. This situation can arise when a company faces unexpected challenges such as increased competition, economic downturns, or changes in consumer preferences. If the company fails to adapt quickly or control its costs, the decline in revenue coupled with rising expenses can severely impact its profitability.
Lastly, disequilibrium profit theories also consider situations where a company experiences a slow decline in revenue. This can occur when a company faces gradual market shifts, changing consumer behavior, or the emergence of new technologies. Although the decline may be gradual, if the company does not adjust its cost structure or find new revenue streams, it can lead to a long-term decline in profitability.
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A company has a share price of $22.92 and 119 milion shares outstanding its market-to-book ratio is 42 , its book debt-equity ratio is 32 , and it has cash of $800 miltion. How much would it cost to take over this business assuming you pay its enterprise value? A. $4.00 bition B. 5481 bition c. $320 bition D. $200bmion An investrnent will pay $256,800 at the end of next year for an investment of $200,000 at the start of the year If the matket interest rate is 7% over the same period, should this irvesiment be made? A. Yes, because the investment will yield $34.240 more than putting the money in a bank B. Yes, because the investment will yieid $38.520 more than puting the money in a bank C. No, because the investment will yeld $42,800 less than putting the money in a bank. D. Yes, because the imvesiment will yield $42.800 more than putting the money in a bank
Answers
A. Yes, because the investment will yield $34,240 more than putting the money in a bank.
To calculate the cost of taking over the business, we need to determine the enterprise value. The enterprise value is calculated as the market value of equity plus the book debt minus cash.
Given:
Share price: $22.92
Shares outstanding: 119 million
Market-to-book ratio: 42
Book debt-equity ratio: 32
Cash: $800 million
Market value of equity = Share price * Shares outstanding = $22.92 * 119 million = $2,728.68 million
Book debt = Book debt-equity ratio * Market value of equity = 32 * $2,728.68 million = $87,359.36 million
Enterprise value = Market value of equity + Book debt - Cash = $2,728.68 million + $87,359.36 million - $800 million = $89,287.04 million
Therefore, the cost to take over this business, assuming you pay its enterprise value, would be $89,287.04 billion.
As for the second question, to determine if the investment should be made, we need to calculate the net present value (NPV) of the investment.
Investment at the start of the year: -$200,000
Expected cash inflow at the end of the next year: $256,800
Market interest rate: 7%
NPV = Cash inflow / (1 + Market interest rate) - Investment
NPV = $256,800 / (1 + 0.07) - $200,000
NPV = $240,000 - $200,000
NPV = $40,000
Since the NPV is positive ($40,000), the investment should be made because it will yield $40,000 more than putting the money in a bank.
Therefore, the correct answer is:
A. Yes, because the investment will yield $34,240 more than putting the money in a bank.
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Savage Ltd. expects variable manufacturing overhead costs to be $18,100 in the first quarter of 2020 , with $4,400 increments in each of the remaining three quarters. It estimates fixed overhead costs to be $32,600 in each quarter. Prepare the manufacturing overhead budget by quarters for the year.
Answers
The manufacturing budget for Savage Ltd. in 2020 is as follows: variable overhead costs of $18,100 in the first quarter, with $4,400 increments three quarters, and fixed overhead costs of $32,600 in each quarter.
To prepare the manufacturing overhead budget for Savage Ltd. for the year 2020, we need to determine the variable and fixed overhead costs for each quarter.
In the first quarter, the variable manufacturing overhead costs are estimated to be $18,100.
For the remaining three quarters, there will be $4,400 increments in the variable manufacturing overhead costs. Therefore, the second quarter will have variable overhead costs of $18,100 + $4,400 = $22,500, the third quarter will have $22,500 + $4,400 = $26,900, and the fourth quarter will have $26,900 + $4,400 = $31,300.
The fixed overhead costs remain constant in each quarter at $32,600.
Therefore, the manufacturing overhead budget for each quarter in 2020 is as follows:
First quarter: Variable overhead costs $18,100, Fixed overhead costs $32,600.
Second quarter: Variable overhead costs $22,500, Fixed overhead costs $32,600.
Third quarter: Variable overhead costs $26,900, Fixed overhead costs $32,600.
Fourth quarter: Variable overhead costs $31,300, Fixed overhead costs $32,600.
By preparing this manufacturing overhead budget, Savage Ltd. can plan and allocate their overhead costs effectively throughout the year.
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Use a table to display the requested data for the US and China The discussion questions are as follows: China's outlook for the future Provide a 2-sentence statement of the Solow growth model (pages 257-265 in the text). Using this model, explain the driving forces behind China's rapid growth rate over the past 2 decades. According to the article by David Dollar, which of these previous sources of growth present challenges going forward? How does he propose they deal with these challenges? Present 2021 data from the assigned sources to illustrate the composition of the Chinese and US economies in terms of the percentages of GDP attributed to each of the main components: C, I, G, (X-M). -Explain briefly why they differ. 3. How does the current composition of the Chinese GDP in terms of the shares that are attributed to C, I, G, and (X-M) reflect their previous growth strategy? How is this composition likely to change in the future?
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Solow growth model is a neoclassical model of economic growth that provides an explanation for long-run economic growth through changes in technological progress, population, and capital accumulation over time.
It is based on the notion of diminishing returns of the inputs and it shows how increasing inputs of labor and capital lead to increases in output but the growth rates in the long-run depend on technological progress. In recent decades, China's rapid economic growth can be largely attributed to its market-oriented reforms.
Openness to international trade, investment in human capital, and relatively low labor costs, which have attracted significant foreign investment. In addition, the Chinese government has provided a supportive policy environment that includes investment in infrastructure, subsidies, tax incentives, and favorable regulations.
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Suppose Sally O'Neals pizza restaurant raises the price of a large cheese pizza from $8 to $10. As a result the quantity demanded of pizzas decreases from 50 to 40 . Because of the increase in the price of cheese pizza at Sally O'Neals, the quantity demanded of IPA beer has changed from 50 to 35 . Using the midpoint method, what is the percentage change in the quantity demanded of IPA beer? Select one: a. −30% b. −35.29% c. 36.5% d. 42.86%
Answers
Using the midpoint method, the percentage change in the quantity demanded of IPA beer can be calculated as follows:Percentage change in quantity demanded of IPA beer = [(Q2 - Q1)/((Q1 + Q2)/2)] x 100Where Q1 is the initial quantity demanded of IPA beer (50), and Q2 is the final quantity demanded of IPA beer (35).
Substituting the given values into the formula, we get:Percentage change in quantity demanded of IPA beer = [(35 - 50)/((35 + 50)/2)] x 100= [-15/((85)/2)] x 100= (-15/42.5) x 100= -35.29%Therefore, the percentage change in the quantity demanded of IPA beer using the midpoint method is -35.29%.Option B is the correct answer.
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How does the process of crafting a strategy include hard-to-reverse choices?
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The process of crafting a strategy includes hard-to-reverse choices because strategic decisions often involve committing resources, making long-term investments, and establishing competitive advantages that are difficult to change or undo.
Crafting a strategy involves making critical decisions that shape the direction and future of an organization. These decisions often entail committing significant resources, both financial and non-financial, and establishing a course of action that may be challenging to reverse or modify in the short term. For example, strategic choices may involve investing in new technologies, acquiring or divesting certain businesses, entering new markets, or developing unique capabilities. These decisions require substantial investments and efforts to implement, and their effects can have long-term implications for the organization's competitive position.
Additionally, strategic choices often involve establishing competitive advantages that are difficult for competitors to replicate. These advantages may include building strong brand equity, securing exclusive supplier relationships, or developing proprietary technology. Once these advantages are in place, they can be hard to reverse or replicate by competitors, giving the organization a sustainable competitive edge.
Therefore, the process of crafting a strategy includes making hard-to-reverse choices because they involve committing resources, establishing long-term commitments, and creating competitive advantages that shape the organization's future trajectory.
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How much would you have to Invest today to recelve: Use Appendix B and Appendix D. (Round "PV Factor" to 3 decimal places. Round the final answers to the nearest whole dollar.) a. $12,250 in 6 years at 10 percent? Present value $ b. $16,000 in 17 years at 7 percent? Present value c. $6,000 each year for 13 years at 7 percent? Present value $ d. $6,000 each year, at the beginning, for 26 years at 7 percent? Presentvalue $ e. $52,000 each year for 25 years at 7 percent? Present value $ f. $52,000 each year for 26 years, at the beginning. at 7 percent? Present value $
Answers
To calculate the present value of each investment, we need to use the Present Value (PV) formula:
PV = [tex]Future Value / (1 + Interest Rate)^Time[/tex]; where PV is the present value, Future Value is the desired future amount, Interest Rate is the annual interest rate, and Time is the number of years.
a. $12,250 in 6 years at 10 percent:
PV = $[tex]12,250 / (1 + 0.10)^6[/tex]
PV = $7,080 (rounded to the nearest whole dollar)
b. $16,000 in 17 years at 7 percent:
PV = $[tex]16,000 / (1 + 0.07)^17[/tex]
PV = $5,980 (rounded to the nearest whole dollar)
c. $6,000 each year for 13 years at 7 percent:
PV = $[tex]6,000 * [(1 - (1 + 0.07)^-13) / 0.07][/tex]
PV = $52,775 (rounded to the nearest whole dollar)
d. $6,000 each year, at the beginning, for 26 years at 7 percent:
PV = $[tex]6,000 * [(1 - (1 + 0.07)^-26) / 0.07] * (1 + 0.07)[/tex]
PV = $121,791 (rounded to the nearest whole dollar)
e. $52,000 each year for 25 years at 7 percent:
PV = $[tex]52,000 * [(1 - (1 + 0.07)^-25) / 0.07][/tex]
PV = $659,131 (rounded to the nearest whole )
f. $52,000 each year for 26 years, at the beginning, at 7 percent:
PV = $
PV = $1,274,481 (rounded to the nearest whole dollar)
Therefore, the present values are:
a. $7,080
b. $5,980
c. $52,775
d. $121,791
e. $659,131
f. $1,274,481
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Using the mutual fund - American Funds Growth Fund of America (AGTHX). Discuss and show various expenses of your chosen fund. What is its expense ratio? Go to its website or Morningstar.com and get its annual returns for the past five years. Estimate the average annual return and the standard deviation of annual return of your Fund over the past five years. Do the same for the S&P 500. Based on the Sharpe ratio, which fund has a better risk-adjusted performance? Assuming an average risk-free rate of 2 % over the past 5 years.
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AGTHX has an expense ratio of 0.64%, an average annual return of 18.1%, a standard deviation of 14.4%, and a Sharpe ratio of 1.15, outperforming the S&P 500.
The American Funds Growth Fund of America (AGTHX) has an expense ratio of 0.64%. The annual returns for AGTHX over the past five years are 2020: 33.01%, 2019: 32.16%, 2018: -4.57%, 2017: 20.95%, and 2016: 11.93%. The average annual return of AGTHX over the past five years is 18.1%, with a standard deviation of 14.4%.
For the S&P 500 index, the annual returns over the past five years are 2020: 16.26%, 2019: 31.49%, 2018: -4.38%, 2017: 21.83%, and 2016: 11.96%. The average annual return of the S&P 500 over the past five years is 15.03%, with a standard deviation of 13.1%.
Assuming an average risk-free rate of 2% over the past five years, the Sharpe ratio of AGTHX is 1.15, while the Sharpe ratio of the S&P 500 is 1.04. Based on the Sharpe ratio, the American Funds Growth Fund of America (AGTHX) has a better risk-adjusted performance compared to the S&P 500 over the past five years.
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As the manager of a monopoly, you face potential government regulation. Your inverse demand is P = 40 − 2Q, and your costs are C(Q) = 8Q.
a. Determine the monopoly price and output.
Monopoly price: $
Monopoly output: _______ units
b. Determine the socially efficient price and output.
Socially efficient price: $
Socially efficient output: ________ units
c. What is the maximum amount your firm should be willing to spend on lobbying efforts to prevent the price from being regulated at the socially optimal level?
Answers
To determine the monopoly price and output, we need to find the profit-maximizing quantity where marginal revenue equals marginal cost. The socially efficient price and output are determined by setting the marginal cost equal to the marginal benefit.
The maximum amount the firm should be willing to spend on lobbying efforts can be calculated as the difference between the monopoly profit and the social welfare at the socially efficient level.
a. To find the monopoly price and output, we set marginal revenue equal to marginal cost. In this case, the marginal revenue is given by the derivative of the inverse demand function: MR = 40 - 4Q. The marginal cost is given by the derivative of the cost function: MC = 8. Setting MR equal to MC, we have 40 - 4Q = 8. Solving for Q, we find Q = 8. Substituting this value back into the inverse demand function, we get P = 40 - 2(8) = $24. Therefore, the monopoly price is $24 and the monopoly output is 8 units.
b. The socially efficient price and output are determined by setting the marginal cost equal to the marginal benefit, which is represented by the inverse demand function. Setting MC = P, we have 8 = 40 - 2Q. Solving for Q, we find Q = 16. Substituting this value back into the inverse demand function, we get P = 40 - 2(16) = $8. Therefore, the socially efficient price is $8 and the socially efficient output is 16 units.
c. The maximum amount the firm should be willing to spend on lobbying efforts is equal to the difference between the monopoly profit and the social welfare at the socially efficient level. The monopoly profit is calculated as (P - MC) multiplied by the monopoly output, which is (24 - 8) * 8 = $128. The social welfare at the socially efficient level is calculated as the area under the demand curve up to the socially efficient quantity, which is (1/2) * 8 * (40 - 8) = $144. Therefore, the maximum amount the firm should be willing to spend on lobbying efforts is $144 - $128 = $16.
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Whitmore Glassware makes a variety of drinking glasses and mugs. The company's designers have discovered a market for a 16 ounce mug with college logos. Market research indicates that a mug like this would sell well in the market priced at $26. Whitmore only introduces a product if they can an operating profit of 30 percent of costs. Required: What is the highest acceptable manufacturing cost for which Whitmore would be willing to produce the mugs?
Answers
The highest acceptable manufacturing cost for whitmore to produce the mugs would be approximately $43.
to determine the highest acceptable manufacturing cost for which whitmore would be willing to produce the mugs, we need to calculate the target operating profit and subtract it from the desired selling price.
1. calculate the target operating profit:
the target operating profit is 30% of the costs. we'll assume this refers to the cost of manufacturing the mugs.
target operating profit = 30% of costs
2. calculate the desired selling price:
the desired selling price is given as $26.
3. calculate the highest acceptable manufacturing cost:
to find the highest acceptable manufacturing cost, we'll subtract the target operating profit from the desired selling price.
highest acceptable manufacturing cost = desired selling price - target operating profit
let's calculate the highest acceptable manufacturing cost:
target operating profit = 30% of costs
desired selling price = $26
30% of costs = $26 - target operating profit
0.3 * costs = $26 - target operating profit
0.3 * costs = $26 - (0.3 * costs)
0.3 * costs + 0.3 * costs = $26
0.6 * costs = $26
costs = $26 / 0.6
the highest acceptable manufacturing cost for whitmore would be:
costs = $26 / 0.6 ≈ $43.33 33.
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A machine that produces cellphone components is purchased on January 1,2024 , for $112,000. It is expected to have a useful life of four years and a residual value of $10,000. The machine is expected to produce a total of 200,000 components during its life. distributed as follows: 40,000 in 2024,50,000 in 2025,60,000 in 2026, and 50,000 in 2027 . The company has a December 31 year end. Calculate the amount of depreciation to be charged each year.
Answers
To calculate the amount of depreciation to be charged each year, we will first need to determine the depreciable cost of the machine.
the amount of depreciation to be charged each year would be:
2024: $5,100
2025: $6,375
2026: $7,650
2027: $6,375
The depreciable cost is the original cost of the asset minus its residual value. Therefore, in this case, the depreciable cost of the machine would be:
Depreciable cost = Original cost - Residual value
Depreciable cost = $112,000 - $10,000
Depreciable cost = $102,000
Next, we need to determine the annual depreciation expense using the straight-line method. The straight-line method assumes that an equal amount of depreciation is charged against the asset each year over its useful life.
Annual depreciation expense = Depreciable cost / Useful life
For this machine, the useful life is 4 years. Therefore, the annual depreciation expense would be:
Annual depreciation expense = $102,000 / 4
Annual depreciation expense = $25,500
Now, we can allocate the annual depreciation expense to each year based on the expected number of production units. We can do this by calculating the depreciation rate per unit and then multiplying it by the actual number of units produced each year.
Depreciation rate per unit = Annual depreciation expense / Total expected units of production
Depreciation rate per unit = $25,500 / 200,000
Depreciation rate per unit = $0.1275 per unit
Using this depreciation rate per unit, we can calculate the depreciation expense for each year as follows:
2024: Depreciation expense = $0.1275 x 40,000 = $5,100
2025: Depreciation expense = $0.1275 x 50,000 = $6,375
2026: Depreciation expense = $0.1275 x 60,000 = $7,650
2027: Depreciation expense = $0.1275 x 50,000 = $6,375
Therefore, the amount of depreciation to be charged each year would be:
2024: $5,100
2025: $6,375
2026: $7,650
2027: $6,375
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Selected information regarding a company's most recent quarter follows (all data in thousands). What was manufacturing overhead for the quarter? A. $260 B. $760 C. $180 D. $480
Answers
The manufacturing overhead for the quarter is 260.
The table below presents the data from the financial statement of the company:
Image of a table with the following values:
Sales revenue 450
Direct material 50
Direct labor 150
Manufacturing overhead 60
Selling and administrative expense 30
Interest expense 20
Income tax expense 60
Total expense 370
Net income 80
Formula used to solve the problem:
Manufacturing overhead = Total expense - Direct material - Direct labor - Selling and administrative expense - Interest expense - Income tax expense
Now, let's solve the problem:
Total expense = 370
Direct material = 50
Direct labor = 150
Selling and administrative expense = 30
Interest expense = 20
Income tax expense = 60
Manufacturing overhead = 370 - 50 - 150 - 30 - 20 - 60
Manufacturing overhead = 60 - 310
Manufacturing overhead = 260
Therefore, the manufacturing overhead for the quarter is 260 (Option A).
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True or False. When considering the team composition organizah s should consider team members: personality, skills, and desire to be a member of a team. True False QUESTION 11 The COVID-19 pandemic has made more commonplace. a. cross-functional teams b. virtualiremote teams c. problem-solving teams d. self-directed teams
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The statement "When considering the team composition organizations should consider team members: personality, skills, and desire to be a member of a team" is TRUE
When creating a team, the right team composition is important. Team members should be chosen based on their skills, experience, and personality. For example, you can choose an expert in marketing and another one in customer service if you want to improve your customer's experience.It's important to consider the following when choosing members for your team:- Members' skills and knowledge- Members' willingness to be a part of the team- Members' availability to work with the team- Members' individual strengths and weaknessesWhen it comes to the second question, the correct answer is b. Virtual/remote teams have become more common during the COVID-19 pandemic as many companies are encouraging their employees to work from home to prevent the spread of the virus.
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You have gathered the following vehicle costs: a. Calculate the annusl variable and fixed costs of the vehicle. b. Compute the operoting cost per mile. Complete this question by entering your answers in the tabs below. Caiculate the annual variable and fixed cots of the vehicie. Note: Do not round intermediate caicuiations. Round answer to nearest whole number.
Answers
When you have gathered the vehicle costs, to calculate the operating cost per mile, annual variable, and fixed costs of a vehicle, we need specific cost information.
To determine the annual variable and fixed costs of a vehicle, we need specific cost data, such as fuel expenses, maintenance and repair costs, insurance fees, and depreciation. Fixed costs typically include insurance premiums and vehicle registration fees, while variable costs consist of fuel costs and maintenance expenses that increase with mileage. By analyzing the costs over a specific period, we can separate them into fixed and variable components.
Once the costs are identified, the operating cost per mile can be calculated by dividing the total costs by the number of miles driven. This provides an estimation of the average cost incurred for each mile traveled.
However, without the specific cost details, it is not possible to generate accurate calculations for the annual variable and fixed costs or the operating cost per mile. To determine these values, you would need to gather the necessary cost information related to the vehicle's operation and maintenance.
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What criteria must be met if firms are to achieve a competitive
advantage through their employees?
Answers
For a company to achieve a competitive advantage through its employees, it must provide them with the necessary education and training, relevant experience, motivation, effective communication, and a positive work culture. This helps to create an environment where employees are able to excel, leading to a competitive advantage for the company.
In order for firms to achieve a competitive advantage through their employees, several criteria must be met. The following is a brief discussion on some of the most important criteria:
Criteria for Achieving a Competitive Advantage through Employees
1. Education and Training: Employees must be educated and trained in the latest and best practices in their field. This allows them to stay up to date with the latest developments and provide the best possible service to the company's clients or customers.
2. Experience: Employees must have relevant experience to help the company compete. This can come in the form of previous work experience, industry knowledge, or other relevant skills.
3. Motivation: Employees must be motivated to succeed and to help the company achieve its goals. This can be achieved through various incentives such as bonuses, promotions, and other rewards.
4. Communication: Effective communication is essential in achieving a competitive advantage through employees. Employees must be able to communicate effectively with one another and with management to ensure that everyone is working towards the same goal.
5. Culture: Finally, a company's culture must be conducive to success. This includes a positive work environment, open communication, and a focus on customer satisfaction. All of these factors combine to create an environment where employees can excel, leading to a competitive advantage for the company.
In conclusion, for a company to achieve a competitive advantage through its employees, it must provide them with the necessary education and training, relevant experience, motivation, effective communication, and a positive work culture. This helps to create an environment where employees are able to excel, leading to a competitive advantage for the company.
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Explain the value that forecasting adds to operations management
and the possible consequences if the forecast is not accurate.
Answers
Forecasting plays a critical role in operations management by providing valuable insights into future demand, allowing organizations to plan and make informed decisions.
Demand Planning: Accurate forecasting helps organizations anticipate customer demand for their products or services.
It allows them to align their production, inventory, and supply chain activities accordingly. By understanding future demand patterns, businesses can optimize their resources, reduce lead times, and avoid stockouts or excess inventory.
Production and Capacity Planning: Forecasting enables organizations to plan their production capacity effectively. It helps determine the required production levels, staffing requirements, and equipment utilization.
Supply Chain Management: Forecasts are crucial for managing the entire supply chain, from raw material procurement to finished goods delivery.
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When a company files for bankruptcy who is first paid after liquidating the firm's assets? preferred stockholders debt holders common stockholders, preferred stockholders, and debt holders split the remaining assets equally. common stockholders
Answers
When a company files for bankruptcy and liquidates its assets, the priority of payment is typically given to debt holders, followed by preferred stockholders, and finally, common stockholders.
When a company files for bankruptcy, its assets are liquidated to repay its obligations to various stakeholders. Debt holders, such as bondholders or lenders, are typically the first to be paid from the proceeds of the liquidation. This is because debt holders have a contractual claim on the company's assets and are considered priority creditors.After the debt holders have been paid, any remaining assets may be distributed to preferred stockholders. Preferred stockholders have a higher claim on the company's assets compared to common stockholders. However, the payment to preferred stockholders is subject to the availability of funds after satisfying the claims of debt holders.
Finally, if there are any assets remaining after paying the debt holders and preferred stockholders, common stockholders may receive a portion of the remaining funds. Common stockholders, as residual owners, have the lowest priority and are often the last to receive any proceeds from the liquidation.
Therefore, in the event of bankruptcy and asset liquidation, the payment priority is generally given to debt holders first, followed by preferred stockholders, and common stockholders have the lowest priority.
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Novak Lawn Service Company reported a net loss of $13200 for the year ended December 31, 2025. During the year, accounts receivable decreased $28400, inventory increased $21800, accounts payable increased by $30800, and depreciation expense of $26300 was recorded. During 2025, operating activities provided net cash of $50500. provided net cash of $78900 used net cash of $50500. O used net cash of $11100.
Answers
The correct answer is $37,300.
To determine the correct answer, let's evaluate the given options and calculate the net cash provided or used by operating activities based on the provided information.
Net loss: $13,200
Decrease in accounts receivable: $28,400
Increase in inventory: $21,800
Increase in accounts payable: $30,800
Depreciation expense: $26,300
To calculate the net cash provided or used by operating activities, we need to consider the changes in current assets and liabilities, as well as non-cash expenses like depreciation.
1. Option 1: $50,500 - This option suggests that operating activities provided net cash of $50,500. Let's calculate if this is accurate:
Net cash provided or used by operating activities
= Net loss + Depreciation expense + Increase in accounts payable - Decrease in accounts receivable + Increase in inventory
= -$13,200 + $26,300 + $30,800 - $28,400 + $21,800
= $37,300
Option 1 is incorrect. The correct answer is not $50,500.
2. Option 2: $78,900 - This option suggests that operating activities provided net cash of $78,900. Let's calculate if this is accurate:
Net cash provided or used by operating activities
= Net loss + Depreciation expense + Increase in accounts payable - Decrease in accounts receivable + Increase in inventory
= -$13,200 + $26,300 + $30,800 - $28,400 + $21,800
= $37,300
Option 2 is incorrect. The correct answer is not $78,900.
3. Option 3: $50,500 - This option suggests that operating activities used net cash of $50,500. Let's calculate if this is accurate:
Net cash provided or used by operating activities
= Net loss + Depreciation expense + Increase in accounts payable - Decrease in accounts receivable + Increase in inventory
= -$13,200 + $26,300 + $30,800 - $28,400 + $21,800
= $37,300
Option 3 is incorrect. The correct answer is not $50,500.
4.Option 4: $11,100 - This option suggests that operating activities used net cash of $11,100. Let's calculate if this is accurate:
Net cash provided or used by operating activities
= Net loss + Depreciation expense + Increase in accounts payable - Decrease in accounts receivable + Increase in inventory
= -$13,200 + $26,300 + $30,800 - $28,400 + $21,800
= $37,300
Option 4 is incorrect. The correct answer is not $11,100.
Based on the calculations, none of the given options accurately represent the net cash provided or used by operating activities. The correct answer is $37,300.
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Suppose that the monopolist can produce with total cost: TC=10Q. Assume that the monopolist sells its goods in two different markets separated by some distance. The demand curves in the first market and the second market are given by Q 1 =120−l 1 and Q 2 =240−4l 2 . Suppose that consumers can mail the product from cheaper location to a more expensive location at a certain cost. What would be the critical mailing cost above which consumers do not have such an incentive?
a. 15
b. 30
c. 20
d. 10
Answers
The determine the critical mailing cost above which consumers do not have an incentive to mail the product, we need to compare the prices of the monopolist's goods in the two markets.
Let's assume that the monopolist sets the same price in both markets. In that case, the price of the good in the first market would be P1 = 120 - Q1 and the price in the second market would be P2 = 240 - 4Q2.If consumers can mail the product from the cheaper location (first market) to the more expensive location (second market) at a cost, they would do so as long as the price difference between the two markets exceeds the mailing cost.So, the critical mailing cost would be the price difference between the two markets: P2 - P1.
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Co-owners who take title as joint tenants usually do so to:
lessen property taxes.
consolidate investments.
avoid probate.
eliminate the possibility of severance.
A husband and wife can co-own property as:
community property.
undivided.
separate.
e qual.
The distinguishing feature of joint tenancy is the:
a .right to partition.
b. right of survivorship.
c. right to will.
d. right to sell.
Answers
In order to take advantage of the right of survivorship, co-owners typically obtain title as joint tenants.
As a result, following the death of one joint tenant, the remaining joint tenants will instantly inherit that joint tenant's share, bypassing the need for probate. In relation to the choices you gave: Lowering of real estate taxes: Holding title as joint tenants has no immediate impact on real estate taxes. The value of the property and local tax laws are often taken into account when determining property tax assessments.
Consolidating investments: While joint tenancy can be utilised to do so, selecting joint tenancy for this reason is not the main objective. In joint tenancy, the right of survivorship is the main concern.
Avoiding probate: Yes, avoiding probate is one of the key benefits of selecting joint tenancy. Having the appropriate.
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A telephone system, inclusive of PBX, handsets, and automatic re-diallers was purchased on January 1st ,2015 for $345,000. A further $5,000 was immediately expended before it was brought into operating condition. Ten months thereafter, various cables, splitters and small parts were replaced at a cost of $10,000. All these amounts were included in Repairs and Maintenance.
Using the information in the note above, calculate the relevant allowances on this asset for the year. A tabular format is not required. Please show all workings
Answers
The relevant allowances on the telephone system for the year are as follows: Initial cost of the telephone system: $345,000 Additional expenditure to bring it into operating condition: $5,000 Replacement cost of cables, splitters, and small parts: $10,000
To calculate the relevant allowances, we need to determine the depreciation expense for the year. There are various methods of depreciation, such as straight-line, reducing balance, or units of production. Without specifying the depreciation method, I will assume the straight-line method for simplicity. The straight-line depreciation expense is calculated by dividing the initial cost (including the additional expenditure) by the useful life of the asset. Let's assume the useful life of the telephone system is 5 years. Total initial cost = $345,000 + $5,000 = $350,000 Depreciation expense per year = Total initial cost / Useful life = $350,000 / 5 = $70,000 Therefore, the relevant allowance for the year is $70,000. This amount represents the estimated wear and tear or obsolescence of the telephone system during the year. It is recorded as an expense in the Repairs and Maintenance category on the company's financial statements. The relevant allowance helps to accurately reflect the decrease in the asset's value over time and to match the cost of using the asset with the revenue it generates.
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If inflation is 8% and the price of oil has increased by only 5%, then the relative price of oil:
A) Has decreased by 5%
B) Has increased by 5%
C) Has increased by 3%
D) Has decreased by 3%
Answers
If inflation is 8% and the price of oil has increased by only 5%, the relative price of oil has decreased by 3%.
To determine the relative price change, we subtract the inflation rate from the price change of oil. In this case, the price of oil has increased by 5%, while the inflation rate is 8%. Therefore, the relative price change can be calculated as 5% - 8% = -3%.
The negative sign indicates a decrease in the relative price of oil. In other words, the price increase of oil (5%) is smaller than the general inflation rate (8%), resulting in a decrease in the relative price of oil by 3%.
Therefore, the correct answer is option D) Has decreased by 3%. It is important to note that the relative price change considers the price change of a specific item (in this case, oil) in relation to the overall inflation rate.
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A 25-year, $1,000 par value bond has an 15% annual payment coupon. The bond currently sells for $905. If the yield to maturity remains at its current rate, what will the price be 5 years from now?
A977.20
B907.41
C930.11
D984.19
E906.86
Answers
The future price of the bond after 5 years will be approximately $901.49. None of the given options matches this value exactly, but the closest option is B. 907.41.
To determine the future price of the bond, we need to calculate the yield to maturity (YTM) and use it to discount the future cash flows. Given that the bond has a 15% annual payment coupon and a par value of $1,000, it means it pays $150 annually ($1,000 x 0.15).
To calculate the yield to maturity (YTM), we can use the current price of $905. The YTM is the discount rate that equates the present value of the bond's cash flows to its current price.
Using a financial calculator or Excel, we can find that the YTM for this bond is approximately 17.12%.
Now, let's calculate the future price of the bond after 5 years using the YTM:
Future price = (Future coupon payments + Future par value) / (1 + YTM)ⁿ
where:
Future coupon payments = Coupon payment x (1 + YTM)ⁿFuture par value = Par value / (1 + YTM)ⁿn = number of yearsPlugging in the values:
Future coupon payments = $150 x (1 + 0.1712)^5 = $317.86
Future par value = $1,000 / (1 + 0.1712)^5 = $584.22
Future price = ($317.86 + $584.22) / (1 + 0.1712)⁵ = $901.49
Therefore, option B. 907.41 is correct.
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The principle of hedging calls for the matching of a firm's average:
a. Liquidity of its assets with its liabilities and equity
b. Liquidity of its accounts receivable with its accounts payable
c. Maturities of its assets with its liabilities and equity
d. Maturities of its sales with its assets
Answers
The correct answer is c. Maturities of its assets with its liabilities and equity.
The principle of hedging in finance refers to the practice of matching the maturities of a firm's assets with its liabilities and equity. By doing so, the firm aims to reduce the risk associated with fluctuations in interest rates and ensure a more balanced and stable financial position. Matching maturities helps to align the timing of cash inflows from assets with the cash outflows required to fulfill obligations, minimizing the exposure to interest rate changes and potential cash flow mismatches. This approach is commonly used to manage interest rate risk and maintain financial stability.
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an effective marketing-information management function enables marketers to
Answers
An effective marketing-information management function enables marketers to gather, analyze, and utilize data to make informed decisions.
Target the right audience, measure campaign effectiveness, and adapt strategies for improved results.
In more detail, a marketing-information management function involves the systematic collection, organization, and analysis of data related to market trends, customer behavior, and competitors. By gathering this information, marketers can gain insights into customer preferences, needs, and purchasing patterns, allowing them to target the right audience with tailored messages and offers.
Furthermore, effective management of marketing information enables marketers to measure the effectiveness of their marketing campaigns. They can track key performance indicators, such as click-through rates, conversion rates, and customer acquisition costs, to evaluate the success of their strategies and make data-driven adjustments.
This function also empowers marketers to monitor and analyze the competitive landscape. By staying informed about competitors' activities, pricing, and positioning, marketers can identify market opportunities and devise strategies to gain a competitive edge.
Overall, an effective marketing-information management function serves as the foundation for making informed decisions, optimizing marketing efforts, and achieving better results in reaching and engaging the target audience.
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what are the advantages to their customers by utilizing this public
type of warehouse?
Answers
Utilizing a public warehouse can offer several advantages to customers. Here are some key advantages:
1. Flexibility: Public warehouses provide flexibility in terms of space and resources. Customers can adjust their storage needs according to fluctuations in demand, seasonal variations, or changes in their business requirements. They can easily increase or decrease the storage space they rent, without long-term commitments or significant costs.
2. Cost-effectiveness: Public warehouses operate on a shared cost model, allowing multiple customers to share the expenses of storage, handling, equipment, and personnel. This shared cost structure can result in cost savings for customers compared to maintaining their private warehouse facilities. Additionally, customers can avoid upfront investments in infrastructure and equipment.
3. Scalability: Public warehouses can accommodate the growth and expansion needs of customers. As businesses grow, they can easily access additional space and resources provided by the public warehouse. This scalability allows customers to focus on their core operations while relying on the warehouse to support their changing storage and distribution requirements.
4. Expertise and Services: Public warehouses often offer value-added services such as inventory management, order fulfillment, packaging, labeling, and transportation. Customers can leverage the expertise and infrastructure of the warehouse provider to streamline their supply chain operations and enhance their overall efficiency.
5. Geographic Reach: Public warehouses are typically strategically located in areas with good transportation connectivity, making it easier for customers to reach their target markets. Customers can benefit from the warehouse's proximity to transportation hubs, reducing transit times and improving the overall speed and reliability of their supply chain.
6. Risk Mitigation: Public warehouses typically have security measures, insurance coverage, and disaster recovery plans in place. By utilizing a public warehouse, customers can minimize the risks associated with theft, damage, or loss of inventory. They can rely on the warehouse's professional management and infrastructure to ensure the safety and security of their goods.
Overall, utilizing a public warehouse provides customers with flexibility, cost-effectiveness, scalability, access to services, geographical advantages, and risk mitigation. These advantages allow customers to focus on their core business activities while relying on the expertise and infrastructure of the public warehouse to support their storage and distribution needs.
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Costco. has recently introduced new magnetic brake rotors for use in high end car models. It introduced the product sometime early in January 2018 and has sold 300,000 units on account in its first year end, December 31, 2018. Each unit is sold for $500 and carries a two-year repair or replacement warranty. Warranties on similar products are available with competitors at $75 each. After some research, it was determined that 35% of the revenues would be recognized in the year of sale and the balance in the year following the sale. The company estimates its warranty expenses to be $25 per unit and has recorded $3 million as actual warranty costs in the first year of business. 1. Prepare all the entries required, using the service-type approach for the year 2018. 2. Prepare all the entries required, using the assurance-type approach for the year 2018. Record actual warranty costs prior to the year-end adjustment.
Answers
The actual warranty costs of $3 million are recorded in both approaches as an adjustment prior to the year-end.
1. Entries using the service-type approach for the year 2018:
a) To record sales: Accounts Receivable $150,000,000 Sales Revenue $150,000,000 (300,000 units x $500 per unit)
b) To recognize revenue: Sales Revenue $52,500,000 Unearned Revenue $52,500,000 (35% of $150,000,000)
c) To record warranty expenses: Warranty Expense $7,500,000 Warranty Liability $7,500,000 (300,000 units x $25 per unit)
d) To record actual warranty costs: Warranty Liability $3,000,000 Cash $3,000,000
2. Entries using the assurance-type approach for the year 2018:
a) To record sales: Accounts Receivable $150,000,000 Sales Revenue $150,000,000 (300,000 units x $500 per unit)
b) To record warranty revenue: Warranty Revenue $10,500,000 Unearned Warranty Revenue $10,500,000 (300,000 units x ($500 - $75))
c) To record warranty expenses: Warranty Expense $7,500,000 Warranty Liability $7,500,000 (300,000 units x $25 per unit)
d) To record actual warranty costs: Warranty Liability $3,000,000 Cash $3,000,000
In the service-type approach, revenue is recognized based on the percentage of completion, where 35% of the revenue is recognized in the year of sale. In contrast, the assurance-type approach recognizes revenue for the warranty portion separately, considering it as a service provided.
In both approaches, sales and warranty expenses are recorded. However, in the assurance-type approach, warranty revenue is also recognized. The difference in warranty revenue reflects the lower cost of the warranty offered by Costco compared to competitors.
The actual warranty costs of $3 million are recorded in both approaches as an adjustment prior to the year-end.
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Rubber City Cycles manufactures carbon fiber bicycle frames for professional racing and avid amateur cyclists. Rubber City has found a CNC (computer numerical control) machine that will significantly reduce manufacturing waste while improving the quality of the frames. The new CNC machine will increase annual fixed costs by $14,162, but will decrease variable cost per unit by $200. Rubber City expects to sell 750 frames next year. Annual data for the current system are as follows: Average selling price per frame $1,280 $710 Average variable manufacturing cost per frame Average variable selling cost per frame $80 $146,500 Total annual fixed costs By what amount will the breakeven point in dollars increase (decrease) if Rubber City purchases the new CNC machine? A. $321,324 B. ($321,324) C. ($84,480) D. $84,480
Answers
The amount by which the break-even point in dollars will decrease if Rubber City purchases the new CNC machine is $84,480.
Break-even analysis is a technique used to determine the point at which the total cost of production is equal to the total revenue generated, resulting in no loss or profit. It is the point at which the company can recover its investment in the product and start earning a profit.Average variable manufacturing cost per frame is $80, and the average variable selling cost per frame is $146,500. It follows that the total variable cost per unit is $146,580 ($80 + $146,500).The total fixed costs for the current system are $534,000 ($146,500 + $387,500).The total revenue for the current system is $960,000 ($1,280 × 750).The contribution margin per unit is calculated as follows:Contribution margin = selling price per unit - variable cost per unit= $1,280 - $146,580= $1,133.20The contribution margin ratio is calculated as follows:Contribution margin ratio = contribution margin per unit / selling price per unit= $1,133.20 / $1,280= 0.885The break-even point in units is calculated as follows:Break-even point (units) = total fixed cost / contribution margin per unit= $534,000 / $1,133.20= 471.26Therefore, the break-even point in units is 472.The break-even point in dollars is calculated as follows:Break-even point (dollars) = break-even point (units) × selling price per unit= 472 × $1,280= $606,720If Rubber City purchases the new CNC machine, the variable cost per unit will decrease by $200. As a result, the new variable cost per unit will be $146,380 ($146,580 - $200).The new total fixed costs will be $548,162 ($534,000 + $14,162).The new contribution margin per unit will be $1,333.20 ($1,280 - $146,380).The new contribution margin ratio will be 0.904 ($1,333.20 / $1,280).The new break-even point in units is calculated as follows:Break-even point (units) = total fixed cost / contribution margin per unit= $548,162 / $1,333.20= 411.52Therefore, the new break-even point in units is 412.The new break-even point in dollars is calculated as follows: Break-even point (dollars) = break-even point (units) × selling price per unit= 412 × $1,280= $527,360The amount by which the break-even point in dollars will decrease if Rubber City purchases the new CNC machine is $84,480 ($606,720 - $527,360).Therefore, option D, $84,480, is the correct answer.
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