![chandranewlon](/avatars/12402.jpg)
chandranewlon
05.05.2020 •
Business
Halley Company has just received a special order for 1,000 deck chairs. Halley has sufficient idle capacity to accept the order. Indicate whether the given cost is a sunk cost, opportunity cost, relevant or not relevant to the decision to accept the special order, variable or fixed cost. CHOOSE ALL THAT APPLY. You have MORE THAN ONE answer for all questions. For these questions consider variable cost as a cost that varies with the number of chairs that Halley makes.
Solved
Show answers
More tips
- F Food and Cooking Discover the most delicious spaghetti with these tips...
- P Philosophy How did the concept of module arise in computer science?...
- F Food and Cooking How to Cook Julienne? Recipes and Tips...
- H Health and Medicine At What Age Does a Person Stop Growing?...
- F Family and Home How to Choose a Name for Your Baby?...
- F Food and Cooking Discover the Health Benefits of Cedar Nuts...
- L Leisure and Entertainment Scrapbooking: What is it and Why is it Becoming More Popular?...
- L Leisure and Entertainment Carving: History and Techniques for Creating Vegetable and Fruit Decorations...
- F Food and Cooking How to Make Sushi: A Step-by-Step Guide to Perfectly Rolled Delights...
- T Travel and tourism Maldives Adventures: What is the Best Season to Visit the Luxurious Beaches?...
Answers on questions: Business
- B Business Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $360,000 and credit sales are $1,000,000. An aging of accounts receivable...
- P Physics Which group contains elements that have the following characteristics: 1) at least one is a metalloid. 2) at least one forms an ion with a charge of -2. 3) at least one is...
- S Social Studies Select all that apply. select the items that are included in macroeconomics. __ quantity of couches produced __ price of cars __ prices of goods and services used by most people...
- B Biology True or False? Bacteria are not organisms because they have no organs....
- S Social Studies Which of the following is not a part of physical security? a. Fire doors and walls b. Locks and guards c. Tempest d. All of the above e. None of the above...
Ответ:
The costs are relevant cost and fixed costs.
Explanation:
Halley Company has just received a special order for 1,000 deck chairs. Halley has sufficient idle capacity to accept the order. Indicate whether the given cost is a sunk cost, opportunity cost, relevant or not relevant to the decision to accept the special order, variable or fixed costs. For these questions, consider variable cost as a cost that varies with the number of chairs that Halley makes.
The above is the question to be tackled. Here, the given costs for Halley Company are the Relevant costs and the Fixed costs. What is a relevant cost? A relevant cost is a cost used in management accounting which refers to the avoidable costs incurred when making very specific business decisions. A business management team uses relevant cost to make decisions for the business. It is also used to determine whether to accept a customer's last minute special order. In this case, Halley company will have to use the relevant cost in order to make this decision.
Fixed costs refers to costs that do not increase or decrease with the level of activity. These costs stay the same whether there was an increase or not. These costs are either long-term or short-term liabilities. Fixed costs are mostly associated with idle capacity because the costs incurred during idle time are fixed costs and depreciation. In Halley company's case, they can produce the preordered chairs using their idle time.
Ответ:
1. Raw materials to make 1,000 deck chairs - RELEVANT VARIABLE COST
2. Depreciation on equipment that will be used to make chairs - NOT RELEVANT FIXED COST
3. Revenue that could be earned if special order is not accepted - OPPORTUNITY COST, RELEVANT TO THE DECISION
4. Salary of the production department manager (department that will make the chairs) - NOT RELEVANT FIXED COST
5.Equipment set-up costs incurred to make the chairs - RELEVANT VARIABLE COST
6. Company president's salary - NOT RELEVANT FIXED COST
7. Material's handling cost - RELEVANT VARIABLE COST, AS MORE CHAIRS ARE MADE THIS COST INCREASES
8. Effect of accepting the order on Company's reputation - RELEVANT TO THE DECISION
9. Engineering design costs incurred when chair's design was first developed - SUNK COST, NOT RELEVANT TO THE DECISION
10. Engineering design costs incurred to customize the chairs to customers' specifications - RELEVANT VARIABLE COST, IF THE CHAIRS AREN'T MADE, THIS COST WILL NOT EXIST
11. Direct labor costs to make 1,000 chairs - RELEVANT VARIABLE COST
12. Maintenance on the equipment that would have been performed during the idle time if the order had not been accepted - OPPORTUNITY COST, RELEVANT TO THE DECISION SINCE THE MAINTENANCE WILL HAVE TO BE PERFORMED LATER
13. manager's estimates of revenue that may be generated from this customer in the future if the special order is accepted - RELEVANT TO THE DECISION
Ответ:
The correct approach is "0.39".
Explanation:
The given values are:
Low risk percentage,
= 25%
i.e.,
= 0.25
High risk percentage,
= 30%
i.e.,
= 0.30
Now,
The medium risk percentage will be:
=![1-(low+high)](/tpl/images/1010/4234/5f270.png)
=![1-(0.25+0.30)](/tpl/images/1010/4234/b1e8d.png)
=![1-0.55](/tpl/images/1010/4234/cf3cf.png)
=![0.45](/tpl/images/1010/4234/cee51.png)
Should let probability of either an assertion by a low-risk policyholder be p,
Percentage of medium risk policyholder will be,
= 2p
Percentage of high risk policyholder will be,
= 3×2p
= 6p
By applying Bayes' theorem, we get
⇒![P(A | B) = \frac{P(A \$ B)}{P(B)}](/tpl/images/1010/4234/e0252.png)
⇒![=\frac{(0.25p + 0.45\times 2p)}{(0.25p + 0.45\times 2p + 0.30\times 6p)}](/tpl/images/1010/4234/c5b44.png)
⇒![=\frac{1.15}{2.95}](/tpl/images/1010/4234/1b776.png)
⇒![=0.39](/tpl/images/1010/4234/7525f.png)