$29,827 Chester has negotiated a new labor contract for the next round that will
ID: 2584507 • Letter: #
Question
$29,827
Chester has negotiated a new labor contract for the next round that will affect the cost for their product Cid. Labor costs will go from $7.91 to $8.41 per unit. Assume all period and variable costs as reported on Chester's Income Statement remain the same.
If Chester were to pass on half the new labor costs to their customers, how many units of product Cid would need to be sold next round to break even on the product?
Assets $263,400
Common Stock $59,042
Retained earnings $52,131
Suppose next year the Baldwin Company generates $20,000 in net profit, pays $10,000 in dividends, assets change to $151,000, and common stock remains unchanged. What must their total liabilities be next year? Select: 1 $9,827 $152,227 $88,869
$29,827
Chester has negotiated a new labor contract for the next round that will affect the cost for their product Cid. Labor costs will go from $7.91 to $8.41 per unit. Assume all period and variable costs as reported on Chester's Income Statement remain the same.
If Chester were to pass on half the new labor costs to their customers, how many units of product Cid would need to be sold next round to break even on the product?
Explanation / Answer
Dear student, only one question is allowed at a time. I am answering the first question
Net increase in retained earnings next year
= Net profit – Dividends paid
= $20,000 - $10,000
= $10,000
So, total retained earnings at the end of next year
= Opening retained earnings + Net increase in retained earnings
= $52,131 + $10,000
= $62,131
Total liabilities = Assets - Common stock - Retained earnings
= $151,000 - $59,042 - $62,131
= $ 29,827
So, option D is the correct option
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