Barker Production Company is considering the purchase of a flexible manufacturing system. The after-tax cash benefits/savings associated with the system are as follows: $ 75,000 100,000 Decreased waste |Increased quality Decrease in operating costs Increase in on-time deliveries 62,500 12,500 The system will cost $750,000 and will last ten years. The company's cost of capital is 10 percent.

Q: Assume that a straight line on a CVP chart intersects the vertical axis at the level of fixed costs…

A: CVP Chart:   Cost Volume Chart (CVP) chart refers to a graphical representation of the cost-volume…

Q: Which one of the following statement best describe the unit variable cost: Select one: O a. Remains…

A: The Question has covered the concept of Variable Cost. The cost which is increases with level output…

Q: 14 Within the relevant range of activity, how will variable cost per unit behave? Select one: a.…

A: The correct answer is d. It will remain constant.Explanation:Variable Costs are costs that change in…

Q: Which of the following is called minimum point of production at which total cost is recovered:

A: Total cost recovery is the point under which the entity does not make any profit or loss That is…

Q: How to compute the PV Factor?

A: The PV factor allows you to discount a future value to a present value. The formula to determine the…

Q: Fixed cost per unit ______ A

A: Under Marginal costing technique there are two types of costs . That is  a) Fixed costs Fixed cost…

Q: Q2. Describe how total variable costs and unit variable costs behave with changes in the level of…

A: This is a theory question and we will explain Total variable cost and unit variable costs behave…

Q: Fixed costs per unit _______. .1. can be estimated by the high-low method 2. remains the same when…

A: The high-low technique tries to distinguish between fixed and variable costs. The highest level of…

Q: Define an inverted yield curve. What does it indicate?

A: A yield curve is a graph that shows the yields of bonds with different maturities. Normally, a yield…

Q: How do i caculate the fixed cost

A: The objective of this question is to understand how to calculate the fixed cost in a business. Fixed…

Q: If the ordering cost triples in an EOQ model, while the remaining values stay constant, how will the…

A: Economic Order Quantity is a model which aims to minimize the total inventory cost including the…

Q: What does it mean to have a fixed cost? What's this? How much does it all end up costing? Describe…

A: Introduction: Costs are the costs that a company incurs when it is in operation. It includes the…

Q: What is a yield curve, and what information would you need todraw this curve?

A: Yield curve: It could be a line plotting bond yields (coupon rates) of comparative credit quality…

Q: How would the equation for total costs be written using the following? y = total costs v =…

A: Variable costs are costs that change with change in volume of production . Whereas, Fixed costs…

Q: When output volume increases, do variable costs per unit increase, decrease, or stay the same within…

A: Variable costs: These are the costs that proportionately change with the changes in the activity…

Q: with solution

A: Annual cost refers to the compiled sum value of expenses involved in producing or purchasing an item…

Q: How would an Increase in total fixed costs affect the break-even point and the margin of safety?

A: The break even sales are the sales where business earns no profit no loss during the period.

Q: “Increasing the number of indirect-cost pools is guaranteed to sizably increase the accuracy of…

A: Indirect cost pool refers to the accumulated cost that jointly benefits two or more costs…

Q: What effect does an increase in volume have on—c. Total fixed costs?

A:

Q: How can we determine the operating margin?

A: Operating margin refers to percentage of net operating income over the sales of the company.

Q: What is the Computing equivalent savings per machine-hour? Explain with an example?

A: In costing and especially marginal costing you need make decisions regarding purchase of different…

Q: Which of the following best describes a variable cost? A cost that: a. Represents a fixed…

A: Variable cost is the cost incurred during the production of units which will be directly…

Q: What do you mean when you say "fixed costs"? What's the point? Is it possible to have a combined…

A: Introduction: Costs are the costs that a company incurs when it is in operation. It includes the…

Q: Lana Powell has cumulative earnings of $132,800 at the end of September. In the first week in…

A: The process of establishing precise financial objectives and devising an organized strategy to reach…

Q: What is net operating margin ?

A: operating profit is the companies earnings after deducting operating expenses.  operating profit =…

Q: When output volume increases, do fixed costs per unit increase, decrease, or stay the same within…

A: Fixed Costs:   These are the costs that remain constant in total dollar amount irrespective to the…

Q: How is life-cycle-cost analysis useful?

A: Life Cycle Costing (LCC) is a process of accounting which is used by the owner or management of an…

Q: The controller of Sheridan Industries has collected the following monthly expense data for use in…

A: The high-low method is a cost analysis technique that calculates the variable and fixed components…

Q: Introduc  about the three types of leverages and how different types of leveraged are  related to…

A: In financial terms, leverage is defined as the method or technique, which involves the debt usage,…

Q: What is the impact of changing transportation costs on incremental analysis?

A: 2. Impact on Pricing and Revenue:-Product Pricing: Fluctuations in transportation costs can affect…

Q: 7. Which of the following charts best represent total variable costs? For each chart, the line…

A: Total variable cost which increases when number of production units increases I.e changing of…

Q: How can we calculate the Total Present Cost for the Base Case and Alternative?

A: The question is based on the concept of calculation of cost benefit analysis of base case and…

Q: The cost that vary accordingly to the volume of output is O a. Variable cost O b. Both fixed and…

A: Variable cost means the cost which vary with the level of output and fixed cost means the cost which…

Q: Why is fixed costs changing?

A: In the given problem some estimates related to selling price and cost to be incurred are given and…

Q: How can we compute the mean return for each project?

A: Mean return refers to the average return that a number of projects of a company earns on an average.…

Q: For the given cost function C(x) = 28900 + 500x + x², First, find the average cost function. Use it…

A: Average cost function  = C(x) / x = (28900+500x+x2)/x

Q: How is contribution margin calculated? What about contribution margin ratio? Aren’t they the same…

A: Subtracting the selling price per unit from the variable cost per unit yields the contribution…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.