Answer and Explanation:
The computation of the overhead rate for each activity is shown below:
Machine setup is
= $157,500 ÷ 2,100
= $75 per machine setup
Machining is
= $421,600 ÷ 24,800
= $17 per machine hour
And, for Inspections, it is
= $60,000 ÷ 1,200
= $50 per inspection
In this way it should be calculated
If a perfectly competitive firm is producing a quantity where MC > MR, then profit: Group of answer choices is maximized. can be increased by increasing production. can be increased by decreasing production. can be increased by decreasing the price.
Answer:
The answer is "Option C".
Explanation:
Please find the complete question in the attached file.
A fully competing company can enhance profits by increasing production levels when marginal income is more than marginal cost. If MR > MC It means the company produces too little by generating an additional amount of good, which can generate income, to increase its output, and produce MR = MC only at the point when it produces and as in competition with perfect MR = price level. The business is going to increase production until MR = MC = price and revenue is optimum.
Clonex Labs, Incorporated, uses the weighted-average method in its process costing system. The following data are available for one department for October:
Units Percent Completed Materials Conversion Work in process,
October 1 49,000 90% 60%
Work in process, October 31 27,000 69% 46%
The department started 389,000 units into production during the month and transferred 411,000 completed units to the next department.
Required:
Compute the equivalent units of production for October. Show your complete solution.
Answer:
Materials 429,630
Conversion 423,420
Explanation:
Computation for the equivalent units of production for October.
MATERIALS
Equivalent units of production= 411,000 + (27,000*69%)
Equivalent units of production=411,000 + 18,630
Equivalent units of production= 429,630
CONVERSION
Equivalent units of production= 411,000 +(27,000*46%)
Equivalent units of production =411,000+12,320
Equivalent units of production= 423,420
Therefore the equivalent units of production for October is:
Materials 429,630
Conversion 423,420
Earning a profit may not be a companies_____ responsibility?
1. Singular
2. First
3. Only
4. Last
Sam is eager to start a local magazine that
Answer:
currency
Explanation:
global companies still have access to trade with currency. its accepted whether the company is nonconvertible or convertible.
which of the following would most likely be considered a short term goal
Bakeing 24 cookies for tomorrows bakesale
Finish knitting a quilt by this sunday
ect
You have an opportunity to work three hours of overtime and earn an extra $99 gross income. However, a total of $32 will be taken out for federal, state, and local taxes. You parked in the parking garage and will have to pay $6.50 total to park for the additional hours. You also didn't pack an extra meal, which you already have in the refrigerator at home; so you will have to spend $12 for food. You will also have to pay $55 for additional daycare for your children. According to the marginal principle and everything else equal (ceteris paribus); will you work the overtime? Why or why not? (Show your work) (10 %)
Answer:
no
the marginal benefit of working overtime in terms of income is less than the marginal cost of working overtime
Explanation:
According to the marginal cost principle, i would be willing to work if marginal benefit exceeds marginal cost
Marginal cost = 32 + 6.5 + 12 + 55 = 105.50
Marginal benefit = 99
the marginal benefit of working overtime in terms of income is less than the marginal cost of working overtime. So, i won't work overtime
Katrina needs to use her communication and conflict management skills every day with her team. What stage of development is her team in?
Answer:
forming
Explanation:
Storming - stage 2
Decisions don't come easily within group. Team members vie for position as they attempt to establish themselves in relation to other team members and the leader, who might receive challenges from team members. Clarity of purpose increases but plenty of uncertainties persist. Cliques and factions form and there may be power struggles. The team needs to be focused on its goals to avoid becoming distracted by relationships and emotional issues. Compromises may be required to enable progress. Leader coaches (similar to Situational Leadership® 'Selling' mode).
As per the description provided, the stage of team development at which Katrina's team would be:
- Storming stage
The team development has been divided into five stages:
FormingStormingNormingPerformingAdjourningThe storming stage is described as the stage where every member comes up with his/her ideas and attempts to impress their peers.
This leads to competition among the members of the team and the development of conflicts.
Therefore, the leaders like Katrina intrude in order to resolve the disagreements and handle competition to ensure that the project goes in the right direction.
Thus, the 'storming' stage is the correct answer.
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The Nelson Company has $1,196,000 in current assets and $460,000 in current liabilities. Its initial inventory level is $325,000, and it will raise funds as additional notes payable and use them to increase inventory. How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 2.0
Answer:
The amount by which Nelson's short-term debt (notes payable) increase without pushing its current ratio below 2.0 is $138,000.
Explanation:
From the question, we have:
Initial current assets = $1,196,000
Initial current liabilities = $460,000
Initial inventory level = $325,000
Targeted current ratio = 2.0
Therefore, we have:
Initial current ratio = Initial current assets / Initial current liabilities = $1,196,000 / $460,000 = 2.60
New current liabilities = Initial current assets / Targeted current ratio = $1,196,000 / 2 = $598,000
Expected amount of increase in short-term debt = New current liabilities - Initial current liabilities = $598,000 - $460,000 = $138,000
By implication, we have:
Expected amount of increase in inventory level = Expected amount of increase in short-term debt = $138,000
New inventory level = Initial inventory level + Expected amount of increase in inventory level = $325,000 + $138,000 = $463,000
New current assets = Initial current assets + Expected amount of increase in inventory level = $1,196,000 +$138,000 = $1,334,000
We can now check as follows:
New current ratio = New current assets / New current liabilities = $1,334,000 / $598,000 = 2.23
Therefore, the amount by which Nelson's short-term debt (notes payable) increase without pushing its current ratio below 2.0 is $138,000.
Nelson's short-term debt can increase up to $276,000
The given information includes:
Current Assets = $1,196,000
Current liabilities = $460,000
So, when x amount is borrowed for short term and invested in inventory, then the Revised Current assets = 1,196,000 + x and Revised Current liabilities = 460,000 + x
Lets understand that Revised Current ratio should be 2.0.
We all know that Current ratio = Current Assets / Current liabilities
Now, we input the values
2.0 = $1,196,000 + x / $460,000 + x
$1,196,000 + x = 2.0x($460,000 + x)
$1,196,000 + x = 920,000 + 2x
2x - x = $1,196,000 - $920,000
x = $276,000
In conclusion, the amount of Nelson Short term debt can increase up to $276,000 without pushing its current ratio below 2.0.
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TR Company conducts business exclusively in State V, which levies a 5 percent sales and use tax on goods purchased or consumed in-state. This year, TR bought equipment in State B. The cost of the equipment was $90,000, and TR paid $5,400 sales tax to State B. TR also bought machinery in State D. The cost of the machinery was $200,000, and TR paid $7,000 sales tax to State D.
Required:
a. How much use tax does TR Company owe to State V with respect to the equipment bought in State B?
b. How much use tax does TR Company owe to State V with respect to the machinery bought in State D?
Answer:
a. Particulars Amount
Value of property purchased in State B A $90,000
Tax rate in State V B 5%
Pre-Credit use tax C (A*B) $4,500
Credit Sales tax paid to State B D ($5,400)
Use tax owed to State V E (C+D) $0
b. Particulars Amount
Value of property purchased in State D A $200,000
Tax rate in State V B 5%
Pre-credit use tax C (A*B) $10,000
Credit Sales tax paid to State D D ($7,000)
Use tax owed to State V E (C+D) $3,000
As a result of an injury settlement with your insurance you have the choice between (1) receiving $5,000 today OR (2) $6,500 in three years. If you could invest your money at 8% compounded annually, which option should you pick
Answer:
option 2
Explanation:
to determine the better option, calculate the present value of option 2. The more suitable option is the option with the higher present value
Present value is the sum of discounted cash flows
Present value = future value / ( 1 + r)^n
r = interest rate
n = number of years
6500 / ( 1.08^3) = 5159.91
the present value of option 2 is higher than that of option 1,, so pick option 2
Maybepay Life Insurance Co. is selling a perpetual contract that pays $4,990/year. The contract currently sells for $143,012. What is the rate of return on this investment
Answer:
3.49%
Explanation:
Calculation to determine the rate of return on this investment
Using this formula
Rate of return=Monthly payment/Current value*100
Let plug in the formula
Rate of return = $4,990/$143,012 *100
Rate of return= 3.49%
Therefore the the rate of return on this investment is 3.49%
A proposed nuclear power plant will cost $2.2 billion to build and then will produce cash flows of $300 million a year for 15 years. After that period (in year 15), it must be decommissioned at a cost of $900 million. What is project NPV if the discount rate is 5%? What if it is 18%?
Answer:
Project NPV at 5% discount rate = $1346 .78
Project NPV at 18% discount rate = -597.4
Explanation:
Below is the given values:
Initial cost = $2.2 billion
Yearly cash inflow, A = $300 million
Time = 15 years
Salvage value, S = $900
Project NPV at 5% discount rate = A (P/A, 5%, 15) + S (P/F, 5%, 15) - Initial cost
Project NPV at 5% discount rate = 300 (P/A, 5%, 15) + 900 (P/F, 5%, 15) - $2.2 billion
Project NPV at 5% discount rate = 300 (10.3796) + 900 (0.4810) - $2.2 billion or 2200 million
Project NPV at 5% discount rate = $1346 .78
Now,
Project NPV at 18% discount rate = 300 (5.0915) + 900 (0.0835) - $2.2 billion or 2200 million
Project NPV at 18% discount rate = -597.4
If Karla spent $200 on Wednesday to have the windows in her building washed, recorded the
accounting event that afternoon and on Friday paid $550 for a repair to the water heater
and recorded that event on Friday evening, which of the accounting principles below is she
following?
Answer:
Accrual Principle
Explanation:
The accrual principle is when a transaction is recorded in the time period that it occurs. In this case, recording a Friday transaction on Friday.
Jay and Carrie Garrett operate a small retail store in a college town that sells only house plants and accessories, which they named The Plantatarium. Their initial feeling when they went into business was that virtually everyone was a potential customer for house plants. Subsequent market research conducted for them painted a different picture. This research identified three particularly strong market segments. The first was college students ages 18-24. The next segment was retired seniors ages 65-80. The third segment was professional offices for doctors, accountants, and lawyers. The college students liked houseplants because they dressed up their living spaces. The senior liked them because they became the focus of a hobby. The professionals did not buy them for any reason other than décor.
The Plantatarium promotes itself in different media using the phrase "An out-of-this-world selection of unique plants." This phrase is a reflection of the firm's :___________
a. positioning strategy.
b. VALS profile.
c. target market.
d. demographics.
Answer:
a. positioning strategy.
Explanation:
A positioning strategy is about how to position your product or service in your potential customers' minds. In other words, how do you want your customers to see your company?
This particular phrase is meant to make customers think that they can find different and unique plants in the Plantatarium.
Norton Company reported total sales revenue of $55,000, total expenses of $45,000, and net income of $10,000 on its income statement for the year ended December 31, 2010. During 2010, accounts receivable increased by $4,000, merchandise inventory increased by $6,000, accounts payable decreased by $2,000, and depreciation of $18,000 was recorded. Therefore, based only on this information, the net cash flow from operating activities using the indirect method for 2010 was:
Answer:
By calculation the answer is $16,000.
Norton Company reported total sales revenue of $55,000, total expenses of $45,000, and net income of $10,000 on its income statement for the year ended December 31, 2010. To calculate the net cash flow from operating activities using the indirect method.
The net income and then adjust for changes in working capital and non-cash expenses.
Net Income: $10,000
Adjustments for Changes in Working Capital:
Increase in Accounts Receivable: $4,000
Increase in Merchandise Inventory: $6,000
Decrease in Accounts Payable: $2,000
Adjustments for Non-cash Expenses:
Depreciation: $18,000
Net Cash Flow from Operating Activities:
Net Income + Adjustments for Changes in Working Capital + Adjustments for Non-cash Expenses
$10,000 - $4,000 - $6,000 + $2,000 + $18,000
$10,000 - $8,000 + $2,000 + $18,000
Net Cash Flow from Operating Activities = $22,000
Therefore, based on the given information, the net cash flow from operating activities using the indirect method for 2010 was $22,000.
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Grays Company uses a perpetual inventory system. On May 1, the company had inventory of 20 units at a cost of $8 each. On May 3, it purchased 30 units at $10 each. 22 units are sold on May 6. Under the weighted average inventory costing method, what amount will be reported as cost of goods sold for the 22 units that were sold
Answer: $9.20
Explanation:
Using the weighted average inventory costing method, the price is abased on the number of units and their price.
The above inventory cost would be calculated as follows:
= [ (Opening units * Cost of units) + (Units purchased * Cost of purchase) ] / Total units in inventory
= [ (20 * 8) + (30 * 10) ] / (20 units + 30 units)
= [ 160 + 300 ] / 50
= $9.20
New lithographic equipment, acquired at a cost of $859,200 on March 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of five years and an estimated residual value of $96,660. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On the basis of the data presented to the manager, the double-declining-balance method was selected.
Required:
a. Determine the annual depreciation expense for each of the estimated five years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by (a) the straight-line method and (b) the double-declining-balance method. Round your answers to the nearest whole dollar.
b. Journalize the entry to record the sale assuming the manager chose the double-declining-balance method.
Answer and Explanation:
The calculation and the journal entry is given below:
a)
Depreciation expense= (Original cost - Residual Value) ÷ Estimated useful life
= $(859200 - 96660) ÷ 5
= $152508
Year Depreciation Expense Accumulated depreciation Book Value,
1 $152508 $152508 $706692
2 152508 305016 554184
3 152508 457524 401676
4 152508 610032 249168
5 152508 762540 96660
b)
Depreciation rate is
= 100 ÷ 5 × 2
= 40%
Year Depreciation Expense Accumulated depreciation Book Value,
1 $343680 $343680 $515520
( 40% of 859200)
2 206208 549888 309312
(40% of 515520)
3 123725 673613 185587
4 74235 747848 111352
5 14692 762540 96660
(111352-96660)
c)
The journal entry is
Cash $141422.00
Accumulated depreciation- Equipment $747848.00
To Gain on sale of Equipment $30070.00
To Equipment $859200.00
(Being the sale of equipment is recorded)
Place and convenience are connected by a core linkage. While GoPro was able to get the product into locations where customers could find it, it made an error when production problems forced it to
Question Completion with Options:
a. ignore convenience stores in its distribution network.
b. deliver fewer cameras than were needed during a holiday season.
c. miss the customer connection by emphasizing place over convenience.
d. exert too much power in the distribution network.
Answer:
GoPro
production problems forced it to
b. deliver fewer cameras than were needed during a holiday season.
Explanation:
Shortages are avoided by producers as much as possible in order not to cause disequilibrium in the market. Shortages are not the same as scarcity. They are temporary setbacks when the quantity demanded outstrips the quantity supplied at the equilibrium market price. The backlashes result in lost sales and revenue for suppliers. Shortages may clear ways for competitors to enter the market to meet the unsatisfied demand.
A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $200 worth of merchandise. On July 28, it paid the full amount due. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the merchandise return on July 7 is:
Answer:
Date Account Titles and Explanation Debit Credit
Accounts Payable $1,600
($1,800 - $200)
Merchandise inventory $32
(2% * $1,600)
Cash $1,568
(To record the merchandise return)
A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $200 worth of merchandise. On July 28, it paid the full amount due. Assuming the company uses a perpetual inventory system, and records purchases using the gross method.
The journal entry to record the merchandise return on July 7 using the perpetual inventory system and the gross method would be as follows:
Date: July 7
Merchandise Returns and Allowances $200
Accounts Payable $200
Explanation:
The Merchandise Returns and Allowances account is used to record returns of merchandise to the supplier. By crediting the Accounts Payable account, it reduces the amount owed to the supplier for the returned merchandise.
In this entry, the company is reducing the Accounts Payable by $200 due to the returned merchandise worth $200.
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On June 30, 2021, Moran Corporation issued $4 million of its 8% bonds for $3.5 million. The bonds were priced to yield 9.4%. The bonds are dated June 30, 2021. Interest is payable semiannually on December 31 and July 1. If the effective interest method is used, by how much should the bond discount be reduced for the six months ended December 31, 2021? a) $3,500. b) $4,500. c) $4,800. d) $9,000.
Answer:
b) $4,500
Explanation:
The computation of the bond discount that should be reduced is given below;
Bond discount to be reduced
= ($3,500,000 × 9.4 × 1 ÷ 2) - ($4,000,000 × 8% × 1 ÷ 2)
= $164,500 - $160,000
= $4,500
hence, the bond discount that should be reduced is $4,500
Therefore the option b is correct
Based on the following information from Scranton Company's balance sheet, calculate the current ratio.
Current assets $87,000
Investments 50,000
Plant assets 220,000
Current liabilities 39,000
Long-term liabilities 90,000
Retained earnings 228,000
Answer:
2.23
Explanation:
Calculation to determine the current ratio
Using this formula
Current Ratio = Current Assets / Current Liabilities
Where,
Current Assets = $87,000
Current Liabilities = $39,000
Let plug in the formula
Current Ratio = $87,000 / $39,000
Current Ratio = 2.23
Therefore Current Ratio is 2.23
Bellingham Company produces a product that requires 6 standard pounds per unit. The standard price is $3 per pound. If 4,800 units required 29,700 pounds, which were purchased at $2.88 per pound, what is the direct materials (a) price variance, (b) quantity variance, and (c) total direct materials cost variance? Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. a. Direct materials price variance $fill in the blank 1 b. Direct materials quantity variance $fill in the blank 3 c. Total direct materials cost variance $fill in the blank 5
Answer:
Results are below.
Explanation:
To calculate the direct material price and quantity variance, we need to use the following formulas:
Direct material price variance= (standard price - actual price)*actual quantity
Direct material price variance= (3 - 2.88)*29,700
Direct material price variance= $3,564 favorable
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Direct material quantity variance= (6*4,800 - 29,700)*3
Direct material quantity variance= (28,800 - 29,700)*3
Direct material quantity variance= $2,700 unfavorable
Now, the total direct material variation:
total direct material variation= 3,564 - 2,700
total direct material variation= $864 favorable
Compute the amount of net income assuming that it is based on the amounts (a) before adjusting entries and (b) after adjusting entries. Which net income amount is correct
Question Completion:
See attached document for original data.
Answer:
Ramirez Company
Unadjusted Adjusted
1. Net income $8,930 $3,240
2. The net income after the adjusting entries is correct.
Explanation:
a) Data and Calculations:
Unadjusted Adjusted
Service revenue $64,400 $66,220
Salary expense 55,470 55,470
Depreciation expense 6,000
Insurance expense 130
Income tax expense 1,380
Accounts receivable accrued $1,820
Income Statements
Unadjusted Adjusted
Service revenue $64,400 $66,220
Salary expense 55,470 55,470
Depreciation expense 6,000
Insurance expense 130
Income tax expense 1,380
Total expenses $55,470 $62,980
Net income $8,930 $3,240
Grace Company gathered the following reconciling information in preparing its July bank reconciliation: Cash balance per books, 7/31 $4,500 Deposits in transit 150 Notes receivable and interest collected by bank 850 Bank charge for check printing 20 Outstanding checks 2,000 NSF check 170 The adjusted cash balance per the books on July 31 is____.a. $5,010.
b. $3,310.
c. $3,460.
d. $5,160.
Answer:
d. $5,160
Explanation:
Calculation to determine what The adjusted cash balance per the books on July 31 is
Cash balance per books, 7/31 $4,500
Add Notes receivable and interest collected by bank $850
Less Bank charge for check printing ($20)
Less NSF check ($170)
Cash balance per the books on July 31 $5,160
Therefore The adjusted cash balance per the books on July 31 is $5,160
NAME During August, the following transactions were recorded at Gurdeep Corporation. The company uses process costing. (1) Raw materials that cost $24,500 are withdrawn from the storeroom for use in the Assembly Department. All of these raw materials are classified as direct materials. (2) Direct labor costs of $29,000 are incurred, but not yet paid, in the Assembly Department. (3) Manufacturing overhead of $58,900 is applied in the Assembly Department using the department's predetermined overhead rate. (4) Units with a carrying cost of $101,200 finish processing in the Assembly Department and are transferred to the Painting Department for further processing. (5) Units with a carrying cost of $106,100 finish processing in the Painting Department, the final step in the production process, and are transferred to the finished goods warehouse. (6) Finished goods with a carrying cost of $95,100 are sold. Required: Prepare journal entries for each of the transactions listed above. Account Description Debit $ Credit $ (1) To record direct materials issued to production Account Description Debit $ Credit $ (2) To record direct labor costs incurred but not paid. Account Description Debit $ Credit $ (3) To record application of manufacturing overhead Account Description Debit $ Credit $ (4) To record cost of goods completed by Assembly and transferred to Painting Account Description Debit $ Credit $ (5) To record cost of goods completed in Painting and transferred to Finished Goods warehouse Account Description Debit $ Credit $ (6) To record cost of goods sold
Answer:
Gurdeep Corporation
Journal Entries:
Account Titles Debit Credit
(1) Work in Process (Assembly) $24,500
Raw Materials $24,500
To record direct materials issued to production.
Account Titles Debit Credit
(2) Work in Process (Assembly) $29,000
Payroll Payable $29,000
To record direct labor costs incurred but not paid.
Account Titles Debit Credit
(3) Work in Process (Assembly) $58,900
Manufacturing Overhead $58,900
To record application of manufacturing overhead.
Account Titles Debit Credit
(4) Work in Process (Painting) $101,200
Work in Process (Assembly) $101,200
To record cost of goods completed by Assembly and transferred to Painting.
Account Titles Debit Credit
(5) Finished Goods Inventory $106,100
Work in Process (Painting) $106,100
To record cost of goods completed in Painting and transferred to Finished Goods warehouse.
Account Titles Debit Credit
(6) Cost of Goods Sold $95,100
Finished Goods Inventory $95,100
To record cost of goods sold
Explanation:
a) Data and Analysis:
(1) Work in Process (Assembly) $24,500 Raw Materials $24,500
(2) Work in Process (Assembly) $29,000 Payroll Payable $29,000
(3) Work in Process (Assembly) $58,900 Manufacturing Overhead $58,900
(4) Work in Process (Painting) $101,200 Work in Process (Assembly) $101,200
(5) Finished Goods Inventory $106,100 Work in Process (Painting) $106,100
(6) Cost of Goods Sold $95,100 Finished Goods Inventory $95,100
Give the six steps involved in the decision making process
Answer:
DECIDE
Explanation:
D - define the problem
E - establish the criteria
C - consider all alternatives
I - identify the best alternative
D - develop and implement a plan of action
E - evaluate and monitor the solution and give feedback when necessary
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In most cases, not-for-profit entities:______________
a. prepare budgets using the same steps as those used by profit-oriented enterprises.
b. know budgeted cash receipts at the beginning of a time period, so they budget only for expenditures.
c. begin the budgeting process by budgeting expenditures rather than receipts.
d. can ignore budgets because they are not expected to generate net income.
Answer:
c. begin the budgeting process by budgeting expenditures rather than receipts.
Explanation:
In maximum cases, the non-for-profit entities started the budgeting process via budgeting expenses instead of the budgeting receipts as they are qualified for the tax-exemption also their mission & purpose is to provide the benefit to the general public.
So as per the given options, the option c is correct
Find the percentage change in price in each of the following examples using the mid-point method.
Instructions: Round your answers to two decimal places. If you are entering a negative number be sure to include a negative sign (-) in front of that number.
a. The price of a $4 sandwich increases to $5: percent
b. A sale discounts the price of a sofa from $750 to $500: percent
Answer:
0.22
-0.40
Explanation:
midpoint change in price = change in price / average of both price
a. change in price = (5 - 4) = 1
average of both prices = 0.5 (4 + 5) = 4.50
midpoint change in price = 1/ 4.5 = 0.22
b. change in price = (500 - 750) = -250
average of both prices = 0.5(750 + 500) = 625
-250 / 625 = -0.4
When Susan, the CEO of Gregarious Simulation Systems, expanded her operations to a different international market, she was surprised to see how little competition she faced. In her home country, the competition for simulation systems is incredibly fierce. As a result of her international expansion, her firm has been able to easily position themselves as a major player. Which of the four categories of Porter's Diamond framework best explains this advantage?
a. competitive intensity in the focal industry
b. related and supporting industries/complementors
c. demand conditions
d. factor conditions
Answer: A competitive intensity in the focal industry.
Explanation:
Porter's competitive intensity explains the level of rivalry that exists in a particular industry. The competitive intensity is influenced by different factors, such as the fixed cost, concentration of the industry, switching cost, rate of industrial growth etc.
Therefore, from the information given, since the company expanded her operations to a different international market, and the subsequent little competition that was faced, this is explained by the competitive intensity in the focal industry.
Therefore, the correct option is A.
Estrada Corporation produced 204,000 watches that it sold for $18 each. The company determined that fixed manufacturing cost per unit was $9 per watch. The company reported a $816,000 gross margin on its financial statements. Required Determine the variable cost per unit, the total variable product cost, and the total contribution margin.
Variable cost per unit
Total sales 204,000 x $18 = $3,672,000
Gross margin (given) $816,000
COGS=Total Sales -Gross Margin ($3,672,000-816,000)= $2,856,000
Total Fixed Cost 204,000 x $9 = $1,836,000
COGS Total variable cost + total fixed cost 2,856,000-1,836,000=$1,020,000
variable cost per unit (1020,000/204,000)= $5
Contribution margin $2,652,000
Given:
Number of watch produced = 204,000
Selling price of each watch = $18
Fixed cost = $9 per watch
Gross margin = $816,000
Find:
Variable cost per unit
Total variable product cost
Total contribution margin
Computation:
Total sales Value = 204,000 × $18
Total sales Value = $3,672,000
Cost of goods sold = Total Sales - Gross Margin
Cost of goods sold = $3,672,000 - $816,000
Cost of goods sold = $2,856,000
Total Fixed Cost = 204,000 × $9
Total Fixed Cost = $1,836,000
Cost of goods sold = Total variable cost + Total fixed cost
So,
Total variable cost = $2,856,000 - $1,836,000
Total variable cost = $1,020,000
Variable cost per unit = $1020,000 / 204,000
Total variable cost = $5
Contribution margin = $3,672,000 - $1,020,000
Contribution margin = $2,652,000
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