3. Tri-products is trying to decide whether to make-or-buy an accessory item for one of their products. It is projected that this item will sell for $10 each. If the item is outsourced, there is virtually no cost other than the $6 per unit that they would pay their supplier. Internally, they have two choices. equipment, but results in a $4 per unit cost. but its per unit cost is $5. Regardless of whether the item is subcontracted or produced internally, there is a 60% chance that they will sell 50,000 units, and a 40% chance that they will sell 100,000 units. Draw the decision tree appropriate to the alternatives and outcomes stated. Using decision trees and EMV, what is their best choice? Process A requires an investment of $120,000 for design and Process B requires only a $100,000 investment,

3. Tri-products is trying to decide whether to make-or-buy an accessory item for one of their products. It is projected that this item will sell for $10 each. If the item is outsourced, there is virtually no cost other than the $6 per unit that they would pay their supplier. Internally, they have two choices. equipment, but results in a $4 per unit cost. but its per unit cost is $5. Regardless of whether the item is subcontracted or produced internally, there is a 60% chance that they will sell 50,000 units, and a 40% chance that they will sell 100,000 units. Draw the decision tree appropriate to the alternatives and outcomes stated. Using decision trees and EMV, what is their best choice? Process A requires an investment of $120,000 for design and Process B requires only a $100,000 investment,

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Carmen Co. can further process Product J to produce Product D. Product J is currently selling for $20.15 per pound and costs $15.25 per pound to produce. Product D would sell for $36.60 per pound and would require an additional cost of $9.05 per pound to produce. The differential cost of producing Product D is
Coronado Makeup produces face cream. Each bottle of face cream costs $12 to produce and can be sold for $13. The bottles can be sold as is, or processed further into sunscreen at a cost of $14 each. Coronado Makeup could sell the sunscreen bottles for $23 each. What should Coronado Makeup do? Face cream must be further processed because it increases operating income by $1 each. O Face cream must not be further processed because incremental revenue is less than incremental processing costs. O Face cream must be further processed because its operating income is $9 each. Face cream must not be further processed because it decreases operating income by $3 each.
How would I do this problem?
More Parts Liquidators specializes in buying excess parts inventories to resell or to incorporate into other products. They recently purchased parts for $130,000 and they have a buyer willing to pay $156,000. The company also can incorporate these parts into a new product at a cost of $97,500 and sell the new product for $247,000. What should More Parts Liquidators do? Sales Revenue Cost of Parts Additional Costs. Profit/loss More Parts should Parts Only New Product withparts Incremental
s
Solve 2, the first answer is the wrong. Find the lowest acceptable transfer price.
Marigold Corp. is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $27 and Marigold would sell it for $60. The cost to assemble the product is estimated at $13 per unit and the company believes the market would support a price of $64 on the assembled unit. What decision should Marigold make and why? Sell before assembly because the company will be better off by $9 per unit. Sell before assembly because the company will be better off by $4 per unit. Process further because the company will be better off by $18 per unit. Process further because the company will be better off by $20 per unit.
Rahul
Please help me to solve this problem
A new customer ABC Ltd, wants to buy 500 units of your product, but is only prepared to pay RM4 per clock. This will not cover the total cost of making the product, but it will cover the variable costs – anything over RM3 makes a Provide and discuss three factors that you would take into account when deciding whether or not to take the order.
Barbour Corporation, located in Buffalo, New York, is a retailer of high-tech products and is known for its excellent quality and innovation. Recently, the firm conducted a relevant cost analysis of one of its product lines that has only two products, T-1 and T-2. The sales for T-2 are decreasing and the purchase costs are increasing. The firm might drop T-2 and sell only T-1. Barbour allocates fixed costs to products on the basis of sales revenue. When the president of Barbour saw the income statements (see below), he agreed that T-2 should be dropped. If T-2 is dropped, sales of T-1 are expected to increase by 10 percent next year, but the firm's cost structure will remain the same. Sales Variable costs: Cost of goods sold Selling & administrative Contribution margin Fixed expenses: Fixed corporate costs. Fixed selling and administrative Total fixed expenses Operating income Required: T-1 $ 200,000 70,000 20,000 $ 110,000 58,700 14,300 $ 73,000 T-2 $ 260,000 130,000 50,000 $ 80,000…

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