The printed ads of Grand Thornton is an example of corporate image advertising.
Basically, a corporate image advertising is a form of advertisement done when the firm promotes itself in order to
portray positive perceptionincrease its brand awarenessappear relevant.In conclusion, the printed ads of Grand Thornton is an example of corporate image advertising.
Read more about image advertising
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A company sells a product which has a unit sales price of $5, unit variable cost of $3 and total fixed costs of $150,000. The number of units the company must sell to break even is:___________.
A. 50,000 units.
B. 300,000 units.
C. 75,000 units.
D. 30,000 units.
Answer:
c
Explanation:
Breakeven quantity are the number of units produced and sold at which net income is zero
If the sales of a company exceeds the breakeven quantity, the firms is earning a profit.
If the company's sales is less than the Breakeven quantity , the firm is making losses that would not be recouped
Breakeven quantity = fixed cost / price – variable cost per unit
150,000 / (5 -3) = 75000
Accounts receivable arising from sales to customers amounted to $85,000 and $75,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $285,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is:____.
a. $275,000.
b. $445,000.
c. $285,000.
d. $295,000.
Answer:
d. $295,000
Explanation:
Calculation to determine what the cash flows from operating activities to be reported on the statement of cash flows is:
Using this formula
Cash flows from operating activities =Net income + Decrease in accounts receivable
Let plug in the formula
Cash flows from operating activities=$285,000+($85,000-$75,000)
Cash flows from operating activities=$285,000+$10,000
Cash flows from operating activities=$295,000
Therefore the cash flows from operating activities to be reported on the statement of cash flows is:$295,000
A company makes wireless routers. Their profit from each sale is $86.5. Every router that is returned as faulty results in a loss of $10.5. These routers cannot be resolved and therefore are scrapped. If 2% are faulty, what is the profit(or loss) the company can expect to make from selling 96.0 units
Answer:
The expected profit is $8,117.57
Explanation:
The computation of the profit or loss that the company could expect is given below:
The Probability of non-faulty router is
= 1 - 0.02
= 0.98
Now
Expected profit/loss is
= 96 × (0.98 × 86.5 - 0.02 × 10.6)
= $8,117.57
hence, The expected profit is $8,117.57
If Hawk Manufacturing incurs $600,000 during a joint manufacturing process before the split-off point, that $600,000 represents the
Answer:
Joint cost incurred in the process
Explanation:
In domain of accounting, a joint cost can be regarded as a cost that is been incurred in a joint process. Joint costs may encompass costs like direct material,overhead costs as well as direct labor that is been incurred during a joint production process.
joint production process can be regarded as one whereby one input give yields of multiple outputs. This process helps to automatically creates other types of output product when creating one type of output.
For instance, Joint cost when a Manufacturing company incurs $600,000 during a joint manufacturing process before the split-off point, that $600,000 represents the Joint cost .
Mordica Company’s standard labor cost per unit of output is $22.00 (2.00 hours x $11.00 per hour). During August, the company incurs 2,340 hours of direct labor at an hourly cost of $9.90 per hour in making 1,300 units of finished product.
Required:
Compute the total, price, and quantity labor variances.
Solution :
Total labor variance = [(standard rate x standard hours) - (actual rate x actual hours)]
= [$11 x (1300 x 2)] - ($9.90 x 2340)
= $28600 - $23166
= $ 5434 unfavorable
Labor price variance = ( standard rate - actual rate) x actual hours
= ($11.00 - $9.90) x 2340
= $ 1.1 x 2340
= $2574 favorable
Labor quantity variance = standard x (standard hours - actual hours)
= $11.00 x [(1300 x 2) - 2340]
= $11.00 x (2600 - 2340)
= $11.00 x 260
= $2860 unfavorable
At year-end (December 31), Chan Company estimates its bad debts as 0.30% of its annual credit sales of $896,000. Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $448 account of P. Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off. Prepare Chan's journal entries for the transactions.
Answer:
Explanation:
Dec 31:
Debit Bad debts expense = 0.003 × $896000 = $2688
Credit Allowance for doubtful accounts = $2688
February 1:
Debit Allowance for doubtful accounts $448
Credit Accounts receivable—P. Park $448
June 5:
Debit Accounts receivable—P. Park $448
Credit Allowance for doubtful accounts $448
June 5:
Debit Cash $448
Credit Accounts receivable—P. Park $448
As capital investments flow from high wage Core countries to low wage Periphery regions, _______________________ shifts take place in both (hint: the narrative is that this is MOBILE)
Answer: Labor
Explanation:
As a result of capital investments flowing, the labor in both the high wage countries and the low wage peripheral regions will shift due to interactions between the two labor systems.
The lower wage peripheral regions for instance, will see a rise in wages paid to their workers on account of the higher capital investment and people from these areas will move to the higher wage countries where they will be paid less which would reduce the wages paid in these higher wage countries.
The Lumber Division of Paul Bunyon Homes Inc. produces and sells lumber that can be sold to outside customers or within the company to the Construction Division. The following data have been gathered for the coming period:
Lumber Division:
Capacity200,000 board feet
Price per board foot$2.50
Variable production cost per bd. ft.$1.25
Variable selling cost per bd. ft.$0.50
Construction Division:
Board feet needed60,000
Outside price paid per bd. ft.$2.00
If the Lumber Division sells to the Construction Division, $0.35 per board foot can be saved in shipping costs.
If current outside sales are 130,000 board feet, what is the minimum transfer price that the Lumber Division could accept?
a. $1.25
b. $1.40
c. $1.75
d. $2.50
Answer:
b. $1.40
Explanation:
The computation of the minimum transfer price that the Lumber Division could accept is shown below:
= Variable production cost per bd. ft. + Variable selling cost per bd. ft.
= $1.25 + $0.50
= $1.40
Hence, the minimum transfer price that the Lumber Division could accept is $1.40
Therefore the option b is correct
The minimum transfer price that the Lumber Division could accept is $1.40.
What is transfer price?Transfer pricing is the method in which the product is sold out bey one subsidiary to another but within the company.
This method is used when the subsidiaries of a parent company are measured as separate earnings essences.
The computation of the minimum transfer price:
The minimum transfer price is found out by apply the formula:
[tex]\text{Minimum Transfer Price}= \text{Variable Production Cost per bd. ft.}-\text{Variable Selling Cost per bd. }[/tex]
According to the given case,
Variable production cost per bd. ft. = $1.25,
Variable selling cost per bd. ft. = $0.50.
Now apply the values in the above formula, we get:
[tex]\text{Minimum Transfer Price}= \text{Variable Production Cost per bd. ft.}-\text{Variable Selling Cost per bd. }\\\\\text{Minimum Transfer Price}= \$1.25 + \$0.50\\\\\text{Minimum Transfer Price}=\$1.40[/tex]
Therefore, the minimum transfer price that the Lumber Division to accept is $1.40. So, option D is correct.
Learn more about the transfer price, refer to:
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Baker Enterprises operates a midsized company that specializes in the production of a unique type of memory chip. It is currently the only firm in the market, and it earns $10 million per year by charging the monopoly price of $115 per chip. Baker is concerned that a new firm might soon attempt to clone its product. If successful, this would reduce Baker’s profit to $4 million per year. Estimates indicate that, if Baker increases its output to 280,000 units (which would lower its price to $100 per chip), the entrant will stay out of the market and Baker will earn profits of $8 million per year for the indefinite future. 1. What must Baker do to credibly deter entry by limit pricing? 2. Does it make sense for Baker to limit price if the interest rate is 10 percent?
Answer:
Baker Industries manufactures two products: A and B. The company predicts a sales volume of 10,000 units for product A and ending finished-goods inventory of 2,000 units. These numbers for product B are 12,000 and 3,000, respectively. Bacon currently has 7,000 units of A in inventory and 9,000 units
Explanation:
It is currently the only firm in the market, and it earns $10 million per year by charging the monopoly price of $115 per chip. Baker is concerned that a new firm might soon attempt to clone its product. If successful, this would reduce Baker’s profit to $4 million per year. Estimates indicate that, if Baker increases its output to 280,000
Portman company operating at full capacity sold 1000000 units at a price of $188 per unit during the current year , it’s income statement is as follows
Answer:
Portman Company
1. The total variable costs and the total fixed costs for the current year are:
Total variable costs $88,000,000
Total fixed costs $40,000,000
2. Determination of (a) the unit variable cost and (b) the unit contribution margin for the current year.
a) Unit variable cost $88
b) Unit contribution margin $100
3. The break-even sales (units) for the current year are:
= 400,000 units.
4. The break-even sales (units) under the proposed program for the following year are:
= 450,000 units.
5. The amount of sales (units) that would be necessary under the proposed program to realize the $60,000,000 of operating income that was earned in the current year is:
= 1,050,000,000 units.
6. The maximum operating income possible with the expanded plant is:
= $61,000,000.
7. If the proposal is accepted and sales remain at the current level, the operating income or loss be for the following year will be:
= $55,000,000.
8. Based on the data given (1 - 6), would you recommend accepting the proposal?
In favor of the proposal because of the possibility of increasing income from operations.
Explanation:
a) Data and Calculations:
Sales units = 1,000,000
Selling price = $188
Total
Sales $188,000,000
Cost of goods sold (100,000,000)
Variable cost of goods sold = $70,000,000
Fixed cost of goods sold = $30,000,000
Gross profit $88,000,000
Expenses:
Selling expenses $16,000,000
Variable selling expenses $12,000,000
Fixed selling expense = $4,000,000
Administrative expenses 12,000,000
Variable administrative expenses = $6,000,000
Fixed administrative expenses = $6,000,000
Total expenses (28,000,000)
Operating income $60,000,000
The division of costs between variable and fixed is as follows:
Variable Fixed
Cost of goods sold 70% 30%
Selling expenses 75% 25%
Administrative expenses 50% 50%
Total Unit Cost
Variable cost of goods sold = $70,000,000 $70
Variable selling expenses 12,000,000 12
Variable administrative expenses 6,000,000 6
Total variable costs = $88,000,000 $88
Contribution margin = $100 ($188 - $88)
Fixed cost of goods sold = $30,000,000
Fixed selling expense = 4,000,000
Fixed administrative expenses = 6,000,000
Total fixed costs = $40,000,000
Break-even sales units = $40,000,000/$100 = 400,000 units
Proposal:
Sales revenue increase = $11,280,000
Fixed costs by $5,000,000 to $45,000,000 ($40 million + $5 million)
Sales units increase = 60,000 ($11,280,000/$188)
Break-even sales units = 450,000 ($45,000,000/$100)
Units to realize target profit of $60,000,000:
= ($45,000,000 + $60,000,000)/$100
= $105,000,000/$100
= 1,050,000,000 units
Profit with the expanded plan
= Total contribution - Fixed Costs
= $100 * 1,060,000 - $45,000,000
= $106,000,000 - $45,000,000
= $61,000,000
With sales at current level of 1,000,000 units
Sales revenue = $188,000,000
Variable costs 88,000,000
Contribution $100,000,000
Fixed costs 45,000,000
Operating income $55,000,000
Solving for PMT of an annuity) To pay for your child's education, you wish to have accumulated $ at the end of years. To do this you plan on depositing an equal amount into the bank at the end of each year. If the bank is willing to pay percent compounded annually, how much must you deposit each year to reach your goal?
Answer:
$783.87
Explanation:
Complete question "To pay for your child's education, you wish to have accumulated $10,000 at the end of 8 years. To dothis, you plan to deposit an equal amount into the bank at the end of each year. If the bank is willing to pay 13 percent compoundedannually, how much must you deposit each year to obtain yourgoal?"
NPER = 8
FV = 10,000
Rate = 13%
PV = 0
Future Value of Annuity = PMT(Rate, NPER, PV, FV)
Future Value of Annuity = PMT(13%, 8, 10000, 0)
Future Value of Annuity = 783.8671964727014
Future Value of Annuity = $783.87
So, one must deposit $783.87 each year to reach the goal.
Hobson Company bought the securities listed below during 2020. These securities were classified as trading securities. In its December 31, 2020, income statement Hobson reported a net unrealized holding loss of $10,000 on these securities. Pertinent data at the end of June 2021 is as follows: SecurityCostFair Value X$360,000 $340,000 Y 190,000 160,300 Z 420,000 405,000 What amount of unrealized holding loss on these securities should Hobson include in its income statement for the six months ended June 30, 2021
Answer:
$54,700
Explanation:
Calculation to determine What amount of unrealized holding loss on these securities should Hobson include in its income statement for the six months ended June 30, 2021
Security Cost Fair value Gain(loss)
X $360,000 $340,000 -$20,000
Y $190,000 $160,300 -$29,700
Z $420,000 $405,000 -$15,000
Total $970,000 $905,300 -$64,700
Unrealized holding loss on Income statement ended June 30,2021 = $64,700 - $10,000
Unrealized holding loss on Income statement ended June 30,2021 = $54,700
Therefore the amount of unrealized holding loss on these securities should Hobson include in its income statement for the six months ended June 30, 2021 is $54,700
Mitch and Jennifer have adjusted gross income of $125,000 and they have not planned for their children's education. Their children are ages 17 and 18 and the parents anticipate paying $20,000 per year, per children for education expenses. Which of the following is the most appropriate recommendation to pay for the children's education?
A) 529 Savings Plan
B) PLUS Loan
C) Pell Grant
D) Coverdell ESA
Answer: B) PLUS Loan
Explanation:
Seeing as they did not plan ahead and the children are about to start school, the best option they have is a loan. In light of that, they should go for a Parent Loan for Undergraduate Students (PLUS) loan.
A PLUS loan is provided by the Federal government to parents to help them pay for the tuition fees of their children at undergraduate level. It has a lower interest rate but is only given to people whose credit history are not to bad.
Jenson Co. just paid a $10.18 dividend. The company's dividends are expected to grow at a consistent rate of 6% indefinitely. Given a required rate of return of 12%, what should be the price of Jenson's stock
Answer:
$179.85
Explanation:
according to the constant dividend growth model
price = d1 / (r - g)
d1 = next dividend to be paid
r = cost of equity
g = growth rate
10.18 (1,06) / (0.12 - 0.06) = 179.85
Larned Corporation recorded the following transactions for the just completed month.
$79,000 in raw materials were purchased on account.
$77,000 in raw materials were used in production. Of this amount, $65,000 was for direct materials and the remainder was for indirect materials.
Total labor wages of $109,500 were paid in cash. Of this amount, $100,900 was for direct labor and the remainder was for indirect labor.
Depreciation of $195,000 was incurred on factory equipment.
Required:
Record the above transactions in journal entries.
Answer:good question. Wait for the answer
Explanation:
During its first year of operations, the McCormick Company incurred the following manufacturing costs: Direct materials, $6 per unit, Direct labor, $4 per unit, Variable overhead, $5 per unit, and Fixed overhead, $240,000. The company produced 30,000 units, and sold 20,000 units, leaving 10,000 units in inventory at year-end. Income calculated under variable costing is determined to be $370,000. How much income is reported under absorption costing?
a. $370,000
b. $290,000
c. $610,000
d. $450,000
Answer: d. $450,000
Explanation:
In absorption costing, the fixed costs are absorbed by the products so that the cost of goods sold is inclusive of fixed costs.
First find the fixed overhead for the ending inventory:
= Fixed overhead per unit * Number of units in ending inventory
= 240,000 / 30,000 * 10,000
= $80,000
This is the fixed overhead that is deferred to the next year.
Income under absorption costing = Income under variable costing + Fixed overhead deferred:
= 370,000 + 80,000
= $450,000
In addition to cost, what factors should be considered in selecting a building contractor? What can go wrong if the lowest bid is selected and nothing else is considered?
Answer:
The proper answer about what the question asked is explained below.
Explanation:
To begin with, when it comes to the construction area there are a lot of factors to consider at the time of selecting a building constructor. It is not just about the cost, but most importantly of all about the level of quality and recognition the constructor has in its business area. As well as the knowledge that will come all in the same package because the person that is in charge of constructing a building must be a professional in that. So eventhough the cost is important for the business the quality of the service hired is further more important. That is because in the case the lowest bid is selected and it turns out that it is not a very good one then future trouble can come with that decision, like piping problems or gas problems or structures problems, etc. And that will not only led to more future expenses but also to possible damage to some lives.
Blade Breeze Company manufactures ceiling fans and uses an activity-based costing system. Each ceiling fan has 20 separate parts. The direct materials cost is $70, and each ceiling fan requires 2.50 hours of machine time to manufacture. Additional information is as follows:
Activity Allocation Base Predetermined Overhead Allocation Rate
Materials handling Number of parts $ 0.08
Machining Machine hours 7.20
Assembling Number of parts 0.35
Packaging Number of finished units 2.80
What is the cost of machining per ceiling fan? (Round any intermediate calculations and your final answer to the nearest cent.)
A) $18.00
B) $70.00
C) $144.00
D) $196.00
Answer:
Machining= $18
Explanation:
Giving the following information:
Each ceiling fan requires 2.50 hours of machine time to manufacture.
Machining Machine hours 7.20
To calculate the cost of machining per ceiling fan, we need to use the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Machining= 2.5*7.2
Machining= $18
TRUE OR FALSE?WHY?
The goods that the enterprise wants or intends to add to its capital stock are inventories.
Answer:
True
Explanation:
Because for their profit
Kelly Industries issued 11% bonds, dated January 1, with a face value of $140,000 on January 1, 2021. The bonds mature in 2031 (10 years). Interest is paid semiannually on June 30 and December 31. For bonds of similar risk and maturity the market yield is 12%. What was the issue price of the bonds
Answer:
$131,971.06
Explanation:
Using a financial calculator, the bond issue price can be determined by first of all set the calculator to its end mode before making the following inputs:
N=20(number of semiannual periods in 10 years=10*2=20)
PMT=7700 (semiannual coupon=face value*coupon rate/2= $140,000*11%/2)
I/Y=6(semiannual yield=12%/2=6%)
FV=140000(the bond's face value is $140,000)
CPT
PV=$131,971.06
If Jackson Collectibles, Inc. has a safety stock of 35 units and the average weekly demand is 14 units, how many days can be covered if the shipment from the supplier is delayed?
A) 2.5 days
B) 17.5 days
C) 21 days
D) 35 days
E) 7.0 days
Answer: B. 17.5 days
Explanation:
The safety stock that Jackson Collectibles has is 35 units.
Their weekly demand however is 14 units.
This means that the number of weeks they can survive on safety stock is:
= Safety stock / demand per week
= 35 / 14
= 2.5 weeks
In days this is:
= 2.5 * 7
= 17.5 days
A paving contractor wants to work on road construction contracts administered and paid for by the state government. The contractor submits a sealed proposal to the state department of transportation for each construction job. The proposal contains a description of how the contractor will fulfill the specifications for the job at a specified price. The contractor is engaging in:
Answer:bid pricing
Explanation:test
An investment advisor has a client base composed of high net worth individuals. In her personal portfolio, the advisor has an investment in Torex, a company that has developed software to speed up internet browsing. She has thoroughly researched Torex and believes the company is financially strong yet currently significantly undervalued. According to the GARP Code of Conduct, the investment advisor may:
Answer: c. recommend Torex, but she must disclose her investment in Torex to the client.
Explanation:
The investment advisor is allowed to recommend Torex to her clients as she believes that it is financially sound and undervalued which means that there is a chance for her clients to earn a good enough return.
She must however disclose to them that she has an investment in the company so that they can decide on their own if this may have biased her decision towards the company as a viable investment option.
Which 2 statements are true regarding Intuit-approved QuickBooks Online apps?
Answer: • You or your client can add apps to the client's account
• They must be available via the Apps screen in QuickBooks Online Accountant or apps.com
Explanation:
You didn't give the options to the questions but I got the options online. Quickbook refers to an accounting software package that is used by businesses to pay bills, accept payments, do payroll functions etc.
The correct statements regarding Intuit-approved QuickBooks Online apps include:
• You or your client can add apps to the client's account.
• They must be available via the Apps screen in QuickBooks Online Accountant or apps.com
Answer:
They must be developed by Intuit
The must be available via the Apps screen in QuickBooks Online Accountant or apps.com
Explanation:
QuickBooks Online.com
If the price level is above the equilibrium price level, how does the aggregate quantity of goods and services demanded compare to the aggregate quantity of goods and services supplied at the price level?
Answer:
When price is above the equilibrium price level, quantity demanded would be less than the quantity supplied. This would lead to a surplus
Explanation:
Equilibrium price is the price at which quantity demand equal quantity supplied.
Above equilibrium price there is a surplus - quantity supplied exceeds quantity demanded. As a result of the surplus, price would fall until equilibrium is reached.
Below equilibrium price there is a shortage - quantity demanded exceeds quantity supplied. As a result of the shortage, price would rise until equilibrium is reached.
Rachel is preparing to open her own raft rental business, cleverly named Rachel's Rafts. She figures out that her fixed costs will be $7,500 and her unit variable costs are $2 per raft. She plans to rent all 2,500 rafts she has on hand. What is Rachel's breakeven price
Answer:
selling price= $5
Explanation:
Giving the following information:
Fixed cost= $7,500
Unitary variable cost= $2
Break-even point= 2,500 units
The break-even point is the number of units to sell to cover the fixed costs. At this level, net income is zero.
So given the costs structure and 2,500 units to sell, the selling price that provides the break-even point is:
Break-even point in units= fixed costs/ (selling price - unitary variable cost)
2,500 = 7,500 / (selling price - 2)
2,500selling price - 5,000 = 7,500
2,500selling price = 12,500
selling price = 12,500 / 2,500
selling price= $5
Assume that an analyst is using the constant dividend growth model to value a stock. Which of the following scenarios would be certain to cause her to decrease her estimate of the stock's value (assuming, of course, that all other factors are held constant)?
A. She believes the company has become riskier, and therefore increases her required rate of return for the stock.
B. She increases her estimate of the company’s next year’s dividend.
C. She increase her estimate of the expected annual rate of growth in the company’s dividends.
D. She decreases her required rate of return for the stock.
E. None of the above would cause her to decrease her estimate of the stock’s value.
Answer: A. She believes the company has become riskier, and therefore increases her required rate of return for the stock.
Explanation:
The formula for the Constant dividend growth model of valuing stock is:
= Next dividend / (Required return - growth rate)
From the formula above, one can tell that if the required return is higher, it would result in a lower value for stock because it would divide the numerator more.
If the analyst believes that the company is riskier and increases the required return, the value would therefore reduce if other measures are kept constant.
EcoFabrics has budgeted overhead costs of $982,800. It has allocated overhead on a plantwide basis to its two products (wool and cotton) using direct labor hours which are estimated to be 468,000 for the current year. The company has decided to experiment with activity-based costing and has created two activity cost pools and related activity cost drivers. These two cost pools are cutting (cost driver is machine hours) and design (cost driver is number of setups). Overhead allocated to the cutting cost pool is $374,400 and $608,400 is allocated to the design cost pool. Additional information related to these pools is as follows.\
Wool Cotton Total Machine hours 104,000 104,000 208,000 Number of setups 1,040 520 1,560 Calculate the overhead rate using activity based costing. (Round answers to 2 decimal places, e.g. 12.25.)
Overhead rates for activity-based costing Cutting $________per machine hour Design $_______per setup
Determine the amount of overhead allocated to the wool product line and the cotton product line using activity-based costing.
Wool product line Cotton product line Overhead Allocated $____________ for the wool product line $__________ cotton product line.
Calculate the overhead rate using traditional approach. (Round answer to 2 decimal places, e.g. 12.25.) Overhead rates using the traditional approach $ _____________per direct labor hour
Answer:
Hence the answer is given as follows,
Calculation of Activity rate:-
According to a summary of the payroll of Mountain Streaming Co., $110,000 was subject to the 6.0% social security tax and the 1.5% Medicare tax. Also, $25,000 was subject to state and federal unemployment taxes.a. Calculate the employer's payroll taxes, using the following rates: state unemployment, 5.4%; federal unemployment, 0.8%.
Answer: $9,800
Explanation:
Payroll taxes = Social security + Medicare +State unemployment + Federal unemployment
= (110,000 * 6%) + (110,000 * 1.5%) + (25,000 * 5.4%) + (25,000 * 0.8%)
= 6,600 + 1,650 + 1,350 + 200
= $9,800
Forrester Company is considering buying new equipment that would increase monthly fixed costs from $396,000 to $684,000 and would decrease the current variable costs of $80 by $20 per unit. The selling price of $120 is not expected to change. Forrester's current break-even sales are $1,188,000 and current break-even units are 9,900. If Forrester purchases this new equipment, the revised contribution margin ratio would be:
Answer:
50%
Explanation:
Contribution margin is used to determine the profitability of a product. it is price less variable cost
Contribution margin ratio = (price - variable costs) / price
variable cost = 80 - 20 = 60
price = 120
(120 - 60) / 120 = 50%
