Answer:
c. Decisions are made at the margin.
Explanation:
It is better to make a trade-off when someone compares the costs with that of the benefits of doing something. The [tex]\text{decisions about whether one must do a bit more or a bit less of an activity}[/tex] are called marginal decisions. Making the [tex]\text{trade-offs at the margin}[/tex] means comparing its costs as well as its benefits of an activity by doing it a little bit more versus doing a little bit less.
In the context, Ana is making decision at the margin when she decides to practice one hour extra and improve her swimming performance as the event of triathlon is approaching.
Thus, option (d) is correct.
Voice Com, Inc., produces and sells cellular phones. The costs of producing and selling 8,000 units of cellular phones are as follows: Variable costs: Fixed costs: Direct materials $ 81 per unit Factory overhead $325,600 Direct labor 37 Selling and admin. exp. 114,400 Factory overhead 24 Selling and admin. exp. 20 Total $162 per unit Voice Com desires a profit equal to a 14% rate of return on invested assets of $942,400. Assume that Voice Com, Inc., uses the total cost concept of applying the cost-plus approach to product pricing. a. Determine the total costs and the total cost amount per unit for the production and sale of 8,000 units of cellular phones. Round the cost per unit to two decimal places. Total cost $ fill in the blank 1 Cost amount per unit $ fill in the blank 2 b. Determine the total cost markup percentage (rounded to two decimal places) for cellular phones. fill in the blank 3 % c. Determine the selling price of cellular phones. Round to the nearest cent. $ fill in the blank 4 per phone
Answer:
Voice Com, Inc.
1a. Total costs = $1,621,600
1b. Total cost per unit = $202.70
2a. Mark-up amount = $131,936
2b. Mark-up percentage = 8.14%
2c. Selling price = $219.19
Explanation:
a) Data and Calculations:
Variable costs per unit:
Direct materials $ 81
Direct labor 37
Factory overhead 24
Selling and admin. exp. 20
Total per unit $162
Fixed costs:
Factory overhead $325,600
Production and sales units = 8,000
Rate of return on invested assets = 14%
Desired profit = $131,936 ($942,400 * 14%)
Sales revenue = Total costs + Desired profit
= $1,753,536
1a. Total costs = $1,621,600 ($162 * 8,000 + $325,600)
1b. Total cost per unit = $202.70 ($1,621,600/8,000)
2a. Mark-up amount = $131,936
2b. Mark-up percentage = 8.14% ($131,936/$1,621,600 * 100)
2c. Selling price = $219.19 ($1,753,536/8,000)
The HBR article titled “Supply Chain Management, Hong Kong Style” illustrated the importance of dispersed manufacturing. Please give an example to show what “dispersed manufacturing” means.
Answer:
Dispersed manufacturing reduces the cost of production by utilizing locally available resources.
Explanation:
Dispersed manufacturing allows one to locate manufacturing plants at different locations to allow dispersed manufacturing and using intervention of technology i.e cloud computing.
This allows use of locally available resources at different locations for manufacturing thereby reducing the overall cost of production.
Bayou Financial Corporation holds a security interest in property owned by Cajun Farms. Perfection of this security interest may not protect Bayou against the claim of:_______
a. a bank.
b. a buyer in the ordinary course of business.
c. a subsequent lien creditor.
d. a trustee in bankruptcy.
Answer:
a
Explanation:
Curley Publishers Inc. projected sales of 51,000 diaries for 2016. The estimated January 1, 2016, inventory is 3,600 units, and the desired December 31, 2016, inventory is 5,000 units. What is the budgeted production (in units) for 2016
Answer:
47,900
Explanation:
The projected sales for curley publishers is 51,000
The beginning inventory is 3,600
The ending inventory is 5,000
The budgeted projection units in 2016 can be calculated as follows
= 51,000+5000
= 51,500-3600
= 47,900
Hence budgeted projection units is 47,900
Assume (1) a predetermined overhead rate of $8.00 per machine-hour, (2) actual machine-hours worked during the period of 54,000 hours, and (3) estimated machine-hours to be worked during the coming period of 55,000 hours. The amount of overhead applied to production during the period is closest to:
Answer:
Allocated MOH= $432,000
Explanation:
Giving the following information:
Predetermined overhead rate of $8.00 per machine-hour
Actual machine-hours worked= 54,000 hours
To calculate the allocated overhead, we need to use the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 8*54,000
Allocated MOH= $432,000
The trial balance of Swifty Corporation at the end of its fiscal year, August 31, 2022, includes these accounts: Beginning Inventory $18,650; Purchases $227,110; Sales Revenue $208,200; Freight-In $9,560; Sales Returns and Allowances $3,440; Freight-Out $1,810; and Purchase Returns and Allowances $8,000. The ending inventory is $23,400.
Prepare a cost of goods sold section (periodic system) for the year ending August 31, 2022.
Answer and Explanation:
The preparation of the cost of goods sold section is presented below;
Beginning inventory $18,650
Purchases $227,110
Less: Purchase return & allowances ($,8000)
Add: Freight in $9,560
Cost of goods available for sale $247,320
Less: Ending inventory ($23,400)
Cost of goods sold $223,920
In this way it should be prepared
Your company sells over-the-counter sleep pills and has created the slogan "sleep better than a baby, sleep like a teenager." what element of strategy does this represent?
Answer: Targeting
Explanation:
Strategy refers to the integrated set of choices that managers consider when making decisions. With regards to the question above, the element of strategy that's used is the targeting strategy.
The targeting strategy is when the market is being segmented and the segments of the market tahts appropriate is then chosen aftee which product are then offered.
A firm has a market value of equity of $50,000. It borrows $12,500 at 7%. If the unlevered cost of equity is 18%, what is the firm's cost of equity capital
Answer: 21.63%
Explanation:
The firm's cost of equity capital will be calculated thus:
Market value of assets = $50000
Debt = $12500
Cost of debt = 7%
Unlevered cost of equity = 18%
Then, we'll calculate equity which will be calculated as:
= Market value of assets - Debt
= $50000 - $12500
= $37500
Then, the cost of equity capital will be:
= Unlevered cost of equity + [(Debt/equity) x (Unlevered cost of equity - Cost of debt)]
= 18% + [($12500/$37500) x (18% - 7%)]
= 18% + [0.33 x 11%]
= 18% + 3.63%
= 21.63%
The process of initially recording business transactions in a journal is:
A. sliding.
B. posting
c. kiting
D. journalizing.
Answer:
Journalizing
Explanation:
During the past year, Sweeter than Honey Inc. sold 920 beehives. Inventory records for the year are as follows: DATE QUANTITY COST TOTAL January 1 Beginning Inventory 180 $38 $ 6,840 January 30 Purchase 300 32 9,600 March 16 Purchase 150 12 1,800 November 10 Purchase 420 15 6,300 December 14 Purchase 400 43 17,200 Total available for sale 1,450 $41,740 Using the average cost method of inventory pricing, calculate the dollar value of the ending inventory. (Round your answer to 2 decimal places) Group of answer choices $19,128.00 $28,772.00 $15,258.70 $22,541.80
Boswal Company uses the weighted-average method in its process costing system. The Assembly Department started the month with 6,000 units in its beginning work in process inventory that were 80% complete with respect to conversion costs. An additional 52,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 18,000 units in the ending work in process inventory of the Assembly Department that were 20% complete with respect to conversion costs. What were the equivalent units for conversion costs in the Assembly Department for the month
Answer:
Boswal Company
The the equivalent units for conversion costs in the Assembly Department for the month are:
= 43,600 units.
Explanation:
a) Data and Calculations:
Units Materials Conversion
Beginning work in process inventory 6,000 100% 80%
Units added during the month 52,000
Total units available for processing 58,000
Ending work in process inventory 18,000 100% 20%
Units completed and transferred out 40,000
Equivalent units of production:
Units Materials Conversion
Units completed and transferred 40,000 40,000 (100%) 40,000 (100%)
Ending work in process inventory 18,000 18,000 (100%) 3,600 (20%)
Total equivalent units of production 58,000 43,600
The positive relationship between price and quantity supplied, other things being equal, is considered to be:________
a. true only when consumers act irrationally.
b. never true in heavily regulated markets.
c. true only in market-based economies.
d. universally true for all markets.
e. sometimes true in all markets.
Answer:
The answer is D.
Explanation:
The correct answer is D. universally true for all markets
Other things being equal, as the price of goods and services increase, producers/firms tend to produce more(this is the popular law od supply) inorder to take advantage of the high revenue.
Unlike demand, for supply, price and quantity supplied are directly related.
5. On Anna's SAR, the "Your Financial Aid History Information" section is blank or N/A. Why?
Answer:
Because she doesn't have any outstanding debts.
Explanation:
The financial aid history refers to the outstanding debts that Anna needs to pay. When this history appears blank, without any information, it means that she has already paid off all her debts and no longer has any outstanding loan, with non-payment.
g Required: 1. Compute the throughput time. (Round your answer to 1 decimal place.) 2. Compute the manufacturing cycle efficiency (MCE) for the quarter. (Round your percentage answer to nearest whole percent.) 3. What percentage of the throughput time was spent in non–value-added activities? (Round your percentage answer to nearest whole percent.) 4. Compute the delivery cycle time. (Round your intermediate calculations and final answer to 1 decimal place.) 5. If by using Lean Production all queue time during production is eliminated, what will be the new MCE? (Do not round intermediate calculations. Round your percentage answer to 1 decimal place.)
Answer:
Note The full question is attached as picture below
1. Throughput time = Process + Inspection + Move + Move time
Throughput time = 2.7 + 0.3 + 1.0 + 5.0
Throughput time = 9.0 days
2. Manufacturing cycle efficiency = Value added time / Throughput time
Manufacturing cycle efficiency = 2.7 / 9.0
Manufacturing cycle efficiency = 0.30
Manufacturing cycle efficiency = 30%
3. Non value added throughput time = 100% - 30%
Non value added throughput time = 70%
4. Delivery cycle time = Wait time + Throughput time
Delivery cycle time = 14.0 + 9.0
Delivery cycle time = 23 days
5. New Manufacturing cycle efficiency = Value added time / Throughput time
New Manufacturing cycle efficiency = 2.7 / 4
New Manufacturing cycle efficiency = 0.675
New Manufacturing cycle efficiency = 67.5%
You work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products: guppy gummies, frizzles, and cannies. All of these products have been on the market for some time, but, to entice better sales, Run-of-the-Mills wants to try a new advertisement that will market two of the products that consumers will likely consume together. As a former economics student, you know that complements are typically consumed together while substitutes can take the place of other goods.
Run-of-the-Mills provides your marketing firm with the following data: When the price of guppy gummies decreases by 20%, the quantity of frizzles sold decreases by 22% and the quantity of cannies sold increases by 7%. Your job is to use the cross-price elasticity between guppy gummies and the other goods to determine which goods your marketing firm should advertise together.
Complete the first column of the following table by computing the cross-price elasticity between guppy gummies and raskels, and then between guppy gummies and mookies. In the second column, determine if guppy gummies are a complement to or a substitute for each of the goods listed. Finally, complete the final column by indicating which good you should recommend marketing with guppy gummies.
Relative to Guppy Gummies
Cross-Price Elasticity Complement or Substitute Recommend Marketing
of Demand with Guppy Gummies
Raskels
Mookies
Answer:
Cost price elasticity of frizzles is 1.1.
Cost price elasticity of cannies is -0.35.
Hence cannies are complementing good for guppy gummies, the firm should sell the cannies with the guppy gummies.
Explanation:
Cross price elasticity of frizzles:-
Cost price elasticity = Percentage change in the quantity of frizzles /
Percentage change in the price of guppy gummies.
[tex]= \frac{-22}{-20} \\\\=1.1[/tex]
Cost price elasticity of frizzles is 1.1. Since the cost price elasticity of demand for frizzles is positive, it is a substitute good for guppy gummies.
Cross price elasticity of cannies:-
Cost price elasticity = Percentage change in the quantity of cannies /
Percentage change in the price of guppy gummies.
[tex]= \frac{7}{-20} \\\\=-0.35[/tex]
Cost price elasticity of cannies is -0.35. Since the cost price elasticity of demand for frizzles is negative, it is a complement good for guppy gummies.
Hence cannies are complementing good for guppy gummies, the firm should sell the cannies with the guppy gummies.
The following transactions occur for the Hamilton Manufacturers. (a) Provide services to customers on account for $4,600. (b) Purchase equipment by signing a note with the bank for $10,200. (c) Pay advertising of $1,000 for the current month.
Answer:
Question wants to know how the Accounting equation is affected by these transactions.
a. Provide services to customers on account for $4,600.
Assets will increase by $4,600.
Equity will increased by $4,600
This is because, Accounts receivable will increase on account of these services being offered on account and it is an Asset account.
This transaction also brings in revenue which is an equity account so Equity will increase as well.
b. Purchase equipment by signing a note with the bank for $10,200.
Assets will increase by $10,200
Liabilities will increase by $10,200
Equipment is an asset which is why assets are increasing. This purchase was funded by a Note which is a liability so liabilities increase as well.
c. Pay advertising of $1,000 for the current month.
Assets decrease by $1,000.
Equity decrease by $1,000.
The advertising was paid for by cash so cash (asset) will reduce as a result. Advertising is an expense and expenses reduce revenue which is in equity so Equity reduces as well.
Please help because I have no clue
Answer:
non profit organizations
Big Blue University has a fiscal year that ends on June 30. The 2019 summer session of the university runs from June 7 through July 27. Total tuition paid by students for the summer session amounted to $111,000. Required: a. How much revenue should be reflected in the fiscal year ended June 30, 2019
Answer:
The amount of revenue that should be reflected in the fiscal year ended June 30, 2019 is $52,235.29.
Explanation:
Number of days from June 7 to June 30 = 30 - 6 = 24 days
Number of days from July 1 to July 27 = 27 days
Total number of days for the summer session = Number of days from June 7 to June 30 + Number of days from July 1 to July 27 = 24 + 27 = 51
Total tuition paid for the summer session = $111,000
Amount to be reflected in the fiscal year ended June 30 = (Number of days from June 7 to June 30 / Total number of days for the summer session) * Total tuition paid for the summer session = (24 / 51) * $111,000 = $52,235.29
Therefore, the amount of revenue that should be reflected in the fiscal year ended June 30, 2019 is $52,235.29.
Romano Corporation has three operating divisions and requires a 12% return on all investments. Selected information is presented here:
Required:
Calculate the missing amounts for each division. (Do not round intermediate calculations. Round "Margin", "Turnover" and "ROI" to 2 decimal places.)
Division X Division Y Division Z
Revenues $1,006,000
Operating income $105,600 $104,900
Operating assets $419,800 $298,200
Margin % 14.00 % %
Turnover turn(s) 1.00 turn(s) 3.00 turn(s)
ROI % % %
Residual income $28,690
Answer:
DIVISION X
Revenues = $1006000
Operating income = $105600
Operating assets = $419800
Margin = (Income*100/Revenue) = $105600*100/$1006000 = 10.50%
Turnover = (Turnover/Assets) = $1006000/$419800 = 2.4 times
ROI = (income*100/assets) = 105600*100/419800 = 25.15%
Residual Income = (105600-419800*12%) = $55224
DIVISION Y
Revenues = $298200*1 = $298200
Operating income = $298200*14% = $41748
Operating assets = $298200
Margin = 14%
Turnover = 1 times
ROI = (income*100/assets) = $41748*100/$298200 = 14%
Residual Income = (41748-298200*12%) = $5964
DIVISION Z
Revenues = $635083.33 * 3 = $1905250
Operating income = $104900
Operating assets = (104900-28690)*100/12 = $635083.33
Margin = (Income*100/Revenue) = $104900*100/$1905250 = 5.51%
Turnover = 3 times
ROI = (income*100/assets = 5.51% * 3 = 16.53%
Residual Income = $28690
name two product with an inelastic demand
Answer:
everything can be found in the picture
Magna Lighting Inc. produces and sells lighting fixtures. An entry light has a total cost of $125 per unit, of which $80 is product cost and $45 is selling and administrative expenses. In addition, the total cost of $125 is made up of $90 variable cost and $35 fixed cost. The desired profit is $55 per unit. Determine the markup percentage on product cost.
Answer:
The correct solution is "125%".
Explanation:
Given:
Desired profit,
= $55
Selling and administrative expenses,
= $45
Product cost,
= $80
Now,
The markup percentage will be:
= [tex]\frac{Desired \ profit+Selling \ and \ administrative \ expenses}{Product \ cost}\times 100[/tex]
By putting the values, we get
= [tex]\frac{55+45}{80}\times 100[/tex]
= [tex]\frac{100}{80}\times 100[/tex]
= [tex]125[/tex] (%)
125% is the markup percentage on product cost.
MarkupIt is important to remember that markup is a term used to refer to the difference between the selling price of a product and cost.
SolutionUsing the formula
Desired profit + Selling and administrative expenses/product cost X 100
Desired profit = $55Selling and administrative expenses = $45product cost = $8055+45/80 = 1.25
1.25* 100= 125
= 125%
You can learn more about markup percentage here https://brainly.com/question/19104371
On December 1, $11,650 was received for a service contract to be performed from December 1 through April 30. b Assuming the work is performed evenly throughout the contract period, prepare the adjusting journal entry on December 31.
Required:
Record journal entries for the above transactions. Refer to the Chart of Accounts for exact wording of account titles.
Answer:
Journal entry
Date Account Title and Explanation Debit Credit
Dec 1 Cash $11650
Unearned fees $11650
(To record unearned fees)
Dec 31 Unearned fees (11650/5) $2330
Fees earned $2330
(To record adjusting entry)
The local gas station agreed to pay its workers $7 an hour in 2018 and $10 an hour in 2019. The CPI was 252 in 2018 and 257 in 2019. Calculate the real wage rate in each year. Did these workers really get a pay raise between 2018 and 2019?
Answer:
Real wage rate can be calculated by:
= Nominal wage rate /CPI * 100
2018 real wage rate:
= 7 / 252 * 100
= $2.78
2019 real wage rate:
= 10 / 257 * 100
= $3.89
Did these workers really get a pay raise between 2018 and 2019?
YES THEY DID:
= 2019 real wage - 2018 wage rate
= 3.89 - 2.78
= $1.11
Campbell Entertainment sponsors rock concerts. The company is considering a contract to hire a band at a cost of $80,000 per concert.
Required:
a. What are the total band cost and the cost per person if concert attendance is 2,000, 3,000, 3, 500, or 4,000?
b. Is the cost of hiring the band a fixed or a variable cost?
Answer:
2,000 - $80,000
3,000 - $80,000
3, 500 - $80,000
4,000 - %80,000
$40
$26.67
$22.86
$20
fixed
Explanation:
Fixed costs are costs that do not vary with output. e,g, rent, mortgage payments
If production is zero or if production is a million, Mortgage payments do not change - it remains the same no matter the level of output.
the total band cost changes per concert and not per number of people attending the concert. Thus, the total band cost is constant per constant. It is fixed at $80,000 per concert regardless of the number of people at the concert
cost per person = total cost / concert attendance
$80,000 / 2,000 = $40
$80,000 / 3000 = $26.67
$80,000 / 3500 = $22.86
$80,000 / 4000 = $20
Alpha Enterprises currently operates 8 warehouses and holds a total inventory of 3,600 units. They want to reduce their inventory to 1,800 units. They should reduce the number of warehouses to:
Answer:
4 warehouses
Explanation:
Total warehouse = 8
Total inventory = 3,600 units
Units per warehouse = Total inventory /Total warehouse
Units per warehouse = 3,600 / 8
Units per warehouse = 450
Now, Alpha Enterprises wants to reduce their inventory to 1,800 units, the number of warehouse should then be:
= 1,800 units / 450 units
= 4 warehouses.
Teams of retired executives who help new entrepreneurs with everything from writing business plans to answering questions about everyday operations are known as
Answer:
The answer is "Score".
Explanation:
Service corps of retired executives is a United states Smaller Business Administration (SBA) non-commercial organization its objectives are to provide advice for young or less-experienced entrepreneurs. Voluntary tutors are frequently entrepreneurs, but not the economic world whatsoever. These volunteers weren't just engaging in training on starting a business, but on how to develop & record company marketing films.
Renfro Corporation’s bonds will mature in 10 years. The bonds have a face value of $1,000 and an 8% coupon rate, paid semiannually. The price of the bonds is $1,100. What is the bond’s yield to maturity, current yield and capital gains yield?
Answer:
Renfro Corporation
The bond's yield to maturity is:
= 0.067
The bond's current yield is:
= 0.073
The bond's capital gains yield is:
= -0.006
Explanation:
a) Data and Calculations:
Maturity period of bonds = 10 years
Face value of the bonds = $1,000
Coupon rate = 8% paid semiannually
Price of the bonds = $1,100
Yield to maturity (YTM) = (C + {(FV - PV)/t})/{(FV + PV)/2}
where C = Coupon interest = $80 ($1,000 * 8%)
FV = Face value of the bonds
PV = Present value or price of the bonds
t = number of years
YTM = ($80 + {($1,000 - $1,100)/10})/{($1,000 + $1,100)/2}
= ($80 + {(-$100)/10})/{($2,100)/2}
= ($80 + $-10/$1,050
= $70/$1,050 = 0.06667
= 0.067
Current Yield = Annual interest/Price
= $80/$1,100
= 0.073
Capital gains yield = YTM - Current Yield
= 0.067 - 0.073
= -0.006
The Quorum Company has a prospective 6-year project that requires initial fixed assets costing $962,000, annual fixed costs of $403,400, variable costs per unit of $123.60, a sales price per unit of $249, a discount rate of 14 percent, and a tax rate of 21 percent. What is the present value break-even point in units per year
Answer:
5375
Explanation:
Given that:
Initial Fixed assets costing = $962000
Annual fixed costs = $403400
Variable cost per unit = $123.60
Sales price per unit = $249.00
Discount rate = 14%
Tax rate = 21%
The contribution per unit = Sales price - Variable cost
= $(249.00 - 123.60)
= $125.40
The present value break-even point(BEP) is the region of sales level where the net present value (NPV) equals zero.
Assuming that the sales level = p
i.e.
NPV = PV(of inflows - of outflows)
Inflows = (p * contribution per unit - annual fixed cost)( 1- tax rate) + depreciation * tax rate
= (p * 125.4 - 403400) ( 1 - 0.21) + depreciation * tax rate
where;
depreciation = initial fixed assest cost/ lifetime of the project
= (125.4p - 403400)*0.79 + (962000/6)*0.21
= (125.4p - 403400)*0.79 + (160333.33)*0.21
= (125.4p - 403400)*0.79 + 33670
Now, the PV of the inflows =PV factor(6 years, 14%) * inflows
[tex]= inflows * \dfrac{( 1-(1.14)^{-6})}{0.14}[/tex]
[tex]= inflows * 3.8887[/tex]
Replacing the value for inflows, we have:
[tex]=((125.4p - 403400)*0.79 + 33670)* 3.8887[/tex]
The PV of the outflows = Initial Fixed asset cost = $962000
∴
Equating both together using:
PV(of inflows - of outflows) = 0
((125.4p - 403400)*0.79 + 33670)* 3.8887 - 962000 = 0
((125.4p - 403400)*0.79 + 33670)* 3.8887 = 962000
(99.066p - 318686 + 33670) * 3.8887 = 962000
(99.066p - 285016) * 3.8887 = 962000
385.24p - 1108341.72 = 962000
385.24p= 962000 + 1108341.72
385.24p= 2070341.72
p = 2070341.72 / 385.24
p ≅ 5375
XYZ Corporation manufactures two models of office chairs, a standard and a deluxe model. The overhead costs for setups and components pools are $60,000 and $58,900, respectively. The following activity has been compiled: Number of Number of Number of Setups Components Direct Labor Hours Standard 11 6 295 Deluxe 29 13 205 Number of setups and number of components are identified as activity-cost drivers for overhead. Assuming an activity-based costing system is used, what is the total amount of overhead costs assigned to the deluxe model
Answer:
$83,800
Explanation:
Setup cost assigned to Deluxe model = Setup Overhead costs * Number of setups required for Deluxe model/Total Number of setups required
Setup cost assigned to Deluxe model = $60,000 * 29/40
Setup cost assigned to Deluxe model = $43,500
Setup cost assigned to Deluxe model = Component Overhead costs x Number of components required for Deluxe model/Total Number of components required
Setup cost assigned to Deluxe model = $58,900 * 13/19
Setup cost assigned to Deluxe model = $40,300
Total amount of overhead costs assigned to the deluxe model = Setup cost assigned to Deluxe model + Setup cost assigned to Deluxe model = $43,500 + $40,300 = $83,800.
Telecommunications, Inc. is considering producing a new hands-free device that will offer several voice-activated features. After much market research, it has determined that the appropriate target price for the new product is $120. To achieve its normal minimum profit margin of 25%, Electronics must be able to produce the product at a maximum total cost of:
Answer:
Target total unitary cost= $90
Explanation:
Giving the following information:
Target selling price= $120
Minimum profit= 25%
To calculate the target total unitary cost, we need to use the following formula:
Target total unitary cost= seeling price*(1 - minimum profit)
Target total unitary cost= 120*0.75
Target total unitary cost= $90