Question
Assume that your R&D team has a new design for their product brea next round that can reduce their material cost of producing units from
Assume that your R&D team has a new design for their product brea next round that can reduce their material cost of producing units from $8.59 to $7.73. They pass on half of all cost savings by cutting the current price to customers. For simplicity:
Use current labor cost of $8.37
Assume all period costs as reported on john Income Statement for African Pacific (Annual Report Page 5) will remain the same.
Current price is equivalent to $30.00
Shipping cost to Africa is $2.50 per unit
Determine how many units (000's) of product Able would need to be sold in Africa alone next round to break even on the product.
302 units 371 units 357 units 386 units
Suppose Bola invested in plant and equipment last year. The plant investment was funded with bonds at a face value of $8,000,000 at 12.5% interest and equity of $4,200,000. Depreciation is 15 years straight line. For this transaction alone, which of the following statements are true (select 3 answers)? On the Balance Sheet, Long Term Debt changed by $8,000,000. On the Balance Sheet, Plant & Equipment increased by $12,200,000. Buying the plant had no net effect on the Cash account because the plant was paid for by the bond plus Retained Earnings. Depreciation increased by $813,333. Since the new plant was funded with debt and equity, on the Balance Sheet, Retained Earnings decreased by $4,200,000, the difference between the investment and the bond issue. Cash was pulled from Retained Earnings to cover the $4,200,000 difference between plant purchase and bond issue. Cash went up when the bond was issued by $8,000,000. Cash went down by the amount of the plant purchase.
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