for account releted Allison's Auto Art is a company that applies pinstripes to vehicles.Allison's cost for a basic 1 - color pinstriping job is $35, and shecharges $95 for this service. For a total price of $175, Allison will applya fancier 3 - color pinstripe application to an automobile, a service thatadds an additional $40 to the total cost of the package. Should Allisoncontinue to offer the 3 - color pinstripe application?A Yes, but only if she lowers the price of the 1 - color applicationB No, her marginal benefit is less than her marginal costC Yes, she still makes a profit by selling the 3 - color application.D More information is needed for Allison to make this decision.

Ans. ) Given the question is related to the concept of profit and loss.Profit is the situation where…

Answered: Allison's Auto Art is a company that…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Mountain Fun manufactures snowboards. Its cost of making 2,100 bindings is as follows: (Click the icon to view the costs.) Suppose Hemingway will sell bindings to Mountain Fun for $14 each. Mountain Fun would pay $3 per unit to transport the bindings to its manufacturing plant, where it would add its own logo at a cost of $0.70 per binding. Read the requirements. Requirement 1. Mountain Fun's accountants predict that purchasing the bindings from Hemingway will enable the company to avoid $1,800 of fixed overhead. Prepare an analysis to show whether Mountain Fun should make or buy the bindings. (Only enter the net relevant costs. For the Difference column, use a minus sign or parentheses only when the cost of outsourcing exceeds the cost of making the bindings in-house.) Variable costs: Binding costs Direct materials Direct labor Variable overhead Fixed costs Purchase price from Hemingway Transportation Logo Total differential cost of 2,100 bindings Should Mountain Fun make or buy the…
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The business manager of an RSO has a choice of purchasing T-shirts for 500 students from two suppliers. Alpha T offers the shirt to be acquired at P300 each with print 500 pieces and silk screen cost of P1,000 for 500 pieces. If the RSO will buy less than 500 pieces, it will be charged at P315each. Beta T, another supplier offers the T-shirt at P187 each, charges printing at P10,000 at a higher level of printing technology for every 300 pieces, and P75/shirt for ink and labor. Record shows that sales come from 75% of the students buy T-shirts. If only 80% of the students are targeted to serve, which supplier will you choose? a) Alpha T b) Beta T c) Either of the two supplier d) none of the supplier
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