Explain why the credit industry wants you to believe that you need a credit score

$553,950 represents the total production costs. The accompanying table elucidates various factors leading to this total cost calculation. The standard product production for three months is calculated as (30,000*$15) = $450,000, while the deluxe product yields (6,930*$15) = $103,950. When these amounts are summed, the total cost amounts to $553,950.

Answer:

additional revenue = $26,250

relevant costs:

direct materials = 350 x $82 = $28,700

direct labor = 525 x $15 = $7,875

setup hours = 1 x $5 = $5

inspection costs = 20 x $5 = $100

machining = 175 x $3 = $525

total relevant costs = $37,205

1) change in income if order is accepted:

total revenue - total relevant costs = $26,250 - $37,205 = -$10,955

the company will incur a loss of $10,955 if the order is approved.

2) if the cost of direct materials is decreased by $13 per unit = $13 x 350 = $4,550, and if direct labor can be reduced by 0.5 hours per unit = 175 hours (= 175 x $15 = $2,625) ⇒ total relevant costs will be lowered by $7,175.

It results in a $3,780 (= $10,955 - $7,175) loss if the special order is accepted.

Utilizing the compound interest formula:

The annual compound interest equation, including principal amount, is:
A = P (1 + r/n)ⁿˣ

Here:

A = future value = $95000
P = principal investment amount =?
r = annual interest rate = 0.06
n = frequency of compounding per year = 2
x = duration in years for investment = 0.5

95,000 = P (1 + 0.06/2)¹

95,000 = P (1 + 0.03)

95,000 = P (1.03)

P = 95,000 ÷ 1.03

P = 95,000 ÷ 1.03

P = 92,233.01

Total compounded interest = 92,233.01 - 95,000

Total compounded interest = -2,766.99