Omar industries manufactures two products: regular and super. the results of operations for 20x1 follow.
regular super
total units 10,000 4,700 14,700
sales revenue $ 260,000 $ 987,000 $ 1,247,000
less:
cost of goods sold 200,000 658,000 858,000
gross margin $ 60,000 $ 329,000 $ 389,000
less:
selling expenses 60,000 189,000 249,000
operating income (loss) $ 0 $ 140,000 $ 140,000
fixed manufacturing costs included in cost of goods sold amount to $3 per unit for regular and $30 per unit for super.
variable selling expenses are $4 per unit for regular and $30 per unit for super; remaining selling amounts are fixed.
required:
1. omar industries wants to drop the regular product line. if the line is dropped, company-wide fixed manufacturing costs would fall by 10% because there is no alternative use of the facilities. what would be the impact on operating income if regular is discontinued?

Corey is trying to save money to buy a new tv. he invests $800 into an account paying 6.5% simple interest. for how long must he save if the tv costs $950? a. 2 years b. 3 years c. 4 years d. 5 years

4. suppose that pollution in a neighborhood comes from two factories, with marginal benefit curves given by mb1 = 12 – p1 and mb2 = 8 – p2. the level of pollution in the neighborhood is given by p = p1 + p2. the government wants to limit pollution by instituting a pollution-rights market. the government’s desired level of p is 10, so it prints 10 pollution rights and offers them for sale to the firms. a)find the equilibrium selling price of a pollution right, as well as the allocation of rights (and hence pollution levels) across the two factories. b)repeat part (a) for the case where the government’s desired level of pollution equals 14. c)comment on the usefulness of a pollution rights market in achieving efficient levels of pollution abatement.

Miko willingly admits that she is not an accountant by training. she is concerned that her balance sheet might not be correct. she has provided you with the following additional information. 1. the boat actually belongs to miko, not to skysong, inc.. however, because she thinks she might take customers out on the boat occasionally, she decided to list it as an asset of the company. to be consistent, she also listed as a liability of the corporation her personal loan that she took out at the bank to buy the boat. 2. the inventory was originally purchased for $27,500, but due to a surge in demand miko now thinks she could sell it for $39,600. she thought it would be best to record it at $39,600. 3. included in the accounts receivable balance is $11,000 that miko loaned to her brother 5 years ago. miko included this in the receivables of skysong, inc. so she wouldn’t forget that her brother owes her money. (b) provide a corrected balance sheet for skysong, inc.. (hint: to get the balance sheet to balance, adjust stockholders’ equity.) (list assets in order of liquidity.)