Using Benefit – Cost Ratio analysis method, determine the best alternative in the following chart if MARR = 10%: You are muted. Press Alt+A to unmute your microphone, or press and hold the SPACE key to temporarily unmute. Alt. D 45,000 32,000 Alt. A Alt. B Description Present Worth of Cost ($) Alt. C 15,000 30,000 25,000 20,000 Present Worth of Benefits ($) 22,000 45,000

Q: Define initial direct costs.

A: Initial direct cost: A cost that is incurred during the process of initiating the agreement of lease…

Q: Describe analyzing of profit using contribution margin.

A: The contribution margin ratio is the percentage of difference in a company's sales and variable…

Q: Explain price improvement

A: It is a process where the purchasing customer gets the opportunity to buy shares at a lower cost…

Q: Describe the components of contribution margin.

A: Contribution Margin: Contribution Margin refers to the margin of profit expected by the company. The…

Q: Define the term Cost approaches.

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: Define the term accelerated cost recovery system (AC RS)?

A: The AC RS is a method of depreciation. It is used for depreciating the property for tax purposes

Q: Express the two ways of contribution margin?

A: Contribution margin is the difference between the sales revenue and the variable costs.

Q: explain the importance of cost behavior

A: Cost behavior refers to any change in the behavior of cost due to change in the level of output or…

Q: Define Replacement cost.

A: Replacement cost is defined as the measure of cash required to change the current resource with a…

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit.  Overhead expenses depend upon the nature of the business operations.