The Selling Division’s unit sales price is $25 and its unit variable cost is $15. Its capacity is 10,000 units. Fixed costs per unit are $6. Current outside sales are 8,000 units. What is the Selling Division’s opportunity cost per unit from selling 2,000 units to the Purchasing Division?
The Selling Division’s unit sales price is $23 and its unit variable cost is $15. Its capacity is 9000 units. Fixed costs per unit are $5. Current outside sales are 7000 units. What is the Selling Division’s opportunity cost per unit from selling 2000 …
Dec 10, 2015 · The Selling Division’s unit sales price is $25 and its unit variable cost is $15. Its capacity is 10,000 units. Fixed costs per unit are $6. Current outside sales are 8,000 units. What is the Selling Division’s opportunity cost per unit from selling 3,000 units to …
The Selling Division’s unit sales price is $25 and its unit variable cost is $15. Its capacity is 10,000 units. Fixed costs per unit are $6. Current outside sales are 8,000 units. What is the Selling Division’s opportunity cost per unit from selling 2,000 …
To determine comparative advantage you have to calculate per unit opportunity cost using the formula give up/gain (the amount of good you are giving up divided by the amount of good you are gaining).Jan 28, 2021
The formula for calculating an opportunity cost is simply the difference between the expected returns of each option. Say that you have option A—to invest in the stock market hoping to generate capital gain returns.
$5.56What is the minimum price Sal and Mario can charge for each pizza? $5.56 covers the variable costs of each pizza, so one pizza could be sold for this price.
The opportunity cost is time spent studying and that money to spend on something else. A farmer chooses to plant wheat; the opportunity cost is planting a different crop, or an alternate use of the resources (land and farm equipment). A commuter takes the train to work instead of driving.Jan 29, 2020
Example of the Opportunity Cost of Capital The senior management of a business expects to earn 8% on a long-term $10,000,000 investment in a new manufacturing facility, or it can invest the cash in stocks for which the expected long-term return is 12%.Oct 2, 2021
Opportunity cost is the profit lost when one alternative is selected over another. The concept is useful simply as a reminder to examine all reasonable alternatives before making a decision. For example, you have $1,000,000 and choose to invest it in a product line that will generate a return of 5%.Feb 2, 2022
Take your total cost of production and subtract your variable costs multiplied by the number of units you produced. This will give you your total fixed cost.
To calculate variable costs, multiply what it costs to make one unit of your product by the total number of products you've created. This formula looks like this: Total Variable Costs = Cost Per Unit x Total Number of Units.Jun 24, 2021
What is the Margin of Safety Formula? In accounting, the margin of safety is calculated by subtracting the break-even point amount from the actual or budgeted sales and then dividing by sales; the result is expressed as a percentage.
How to Calculate Opportunity CostOpportunity Cost = Return on Most Profitable Investment Choice - Return on Investment Chosen to Pursue.Opportunity Cost = $80,000 (selling ten cars worth $8,000 each) - $60,000 (selling 5 trucks worth $12,000 each)Opportunity Cost = $20,000.May 13, 2021
The opportunity cost of primary education consists not only of the loss of returns from the income of child labour, but also loss of the child's informal contribution to the household such as taking care of younger siblings, performing household chores, and caring for livestock.Oct 8, 2021
The correct answer is b. Benefits foregone by not choosing an alternative course of action.
1) In order to maximize firm value, management should invest in new assets when cash flows from the assets are discounted at the firm's ________ and result in a positive NPV.
1) In order to maximize firm value, management should invest in new assets when cash flows from the assets are discounted at the firm's ________ and result in a positive NPV.
Capital Structure Capital structure refers to the amount of debt and/or equity employed by a firm to fund its operations and finance its assets. A firm's capital structure. can be a tricky endeavor because both debt financing and equity financing carry respective advantages and disadvantages.
In other words, it is the expected compound annual rate of return that will be earned on a project or investment. that a business must earn before generating value. Before a business can turn a profit, it must at least generate sufficient income to cover the cost of the capital it uses to fund its operations.
A firm's capital structure. Debt is a cheaper source of financing, as compared to equity. Companies can benefit from their debt instruments by expensing the interest payments made on existing debt and thereby reducing the company’s taxable income. These reductions in tax liability are known as tax shields.
Tax shields are crucial to companies because they help to preserve the company’s cash flows and the total value of the company. However, at some point, the cost of issuing additional debt will exceed the cost of issuing new equity.
Also, equity financing may offer an easier way to raise a large amount of capital, especially if the company does not have extensive credit established with lenders. However, for some companies, equity financing may not be a good option, as it will reduce the control of current shareholders over the business.