Answer:
$152.4 million
Explanation:
The computation of the projected net income is shown below:
As we know that
Net income = (EBIT - interest) × (1 - tax rate)
where,
EBIT = Sales - operating cost
= $700 × 120% - ($700 × 120% × 65%)
= $840 - ($840 × 65%)
= $840 - $546
= $294
The interest expense and tax rate is $40 and 40%
So, the projected net income is
= ($294 - $40) × (1 - 40%)
= $152.4 million
We simply applied the above formula so that the projected net income could be come
Answer:
There is a loss on buying from outside supplier ,Peach's offer should not be accepted.
Explanation:
Variable cost is a cost that varies with number of units produced or sold so it is always a relevant cost while making decision.
Fixed cost remains constant irrespective of number of units so it is a irrelevant cost unless avoidable.So in the given case ,fixed cost $70 is irrelevant since same will be incurred whether purchased or manufactured.
Incremental savings
Saving in variable cost 220
saving in fixed cost 25
Total saving 245
less: Incremental cost (270)
Incremental profit /(loss) on buying from outside supplier (25)
Total loss 25*5900= -147500
Therefore, There is a loss on buying from outside supplier ,Peach's offer should not be accepted.
Answer:
A. $68,200
Explanation:
Retail Cost
Beginning inventory $60,000
$120,000
Plus: Net purchases. $312,000
$480,000
Goods available for sale $372,000
$600,000
Cost to retail percentage = $372,000 ÷ $600,000 = 62%
Less : Net sales
($490,000)
Estimated ending inventory at retail
$110,000
Estimated ending inventory at cost
62% × $110,000 = $68,200
The journal entry on May 1 was:
A debit to Prepaid Insurance for 15,600
And a credit to cash for 15,600
Prepaid Insurance is the share of an insurance premium that
has been paid in early and has not finished as of the balance sheet date.
The monthly insurance payment for two years is computed by 15,600/24
months which is $650 per month.
At December 31 the adjusting entry would be:
A debit to Insurance Expense 5,200
And a credit to Prepaid Insurance for 5,200
5,200 is computed by:
650 x 8 months (starting from May 1 to December 31) = 5,200
Answer:
Resources are limited.
Production requires resources.
Everyone wants or needs goods.
Explanation:
Different regions provide different resources that people can use for their business. People in that region need to understand the type of resources that are available for them and produce the goods that can be sustained by the available resource.
This scarcity means that acquiring resources require a certain amount of capital. Since people do not unlimited capital, they have to be picky with their consumption/production to ensure the ones with highest priority are fulfilled first.
On top of that, everyone wants or needs goods. Meaning that in order to obtain a certain resources, people will have to face competition. As the competition become more fierce, the sacrifice that is needed to obtain a certain product is increased. This is also why they have to watch out which product they should choose to consume.