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Ink Shots, Inc., is a new business located in upstate New York. It prints promotional flyers for local businesses and distributes them at public places or area events. The flyers are either placed on the windshield of cars in parking lots or distributed by hand to people. Ink Shots' owner, Dana Edwards, is facing a difficult decision. She could purchase a commercial printer and produce the flyers in house. However, the machinery, costing approximately $20,000 is quite expensive. The printer has an estimated useful life of four years and would be depreciated using the straight-line method with no salvage value. If Dana purchases the printer, she would also have to buy paper and toner for the machine and pay for maintenance or repairs as needed. She estimates that it would cost $0.02 per page to print the flyers herself. Alternatively, Dana could pay a local printing company $0.05 per copy to print the flyers. She would incur no printing costs other than the 0.05 per page if she chooses this alternative. However, $0.05 per page is considerably more than Dana would have to pay for paper and toner if she owned a commercial printer. Dana plans to charge customers $0.08 per page for each flyer Ink Shots distributes. Questions to answer:
1. Why does Dana need to understand cost behavior? How does it impact Dana and her business?
2. Discuss factors other than cost that Dana should consider.
If the direct materials is 24,000 the direct labor is 18,000 and the applied overhead is 6,300 and total cost is 48,300 what is the cost transferred to finished goods?
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Beale Manufacturing Company has a beta of 2.2, and Foley Industries has a beta of 0.5. The required return on an index fund that holds the entire stock market is 9.5%. The risk-free rate of interest is 3.25%. By how much does Beale's required return ..
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Do your answers above depend on the time frame? In other words, do some parties stand to gain initially but lose in the long run? If so, explain how.
Which one of the following is an underlying assumption of the dividend growth model?
The dominant employer in Davis is UCD. Some argue that UCD uses its market power to lower the wages of some of its staff, especially those in lower-skill jobs. What are the average expenditure and marginal expenditure for labor?
The statement of cash flows is not useful for:
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