Cindys Computer Corp is considering a merger with Bobbys Hard Drive, Inc Cindys total operating costs of producing services are $5 4 million for a sales volume ( S C ) of $48 million Bobbys total operating costs of producing services are $4 5 million for a sales volume ( S B ) of $24 million Calculate the average cost of production for the two firms (Round your answers to 2 decimal places ) If the two firms merge, calculate the total average cost ( TAC ) for the merged firm assuming no synergies (Round your answer to 2 decimal places ) Suppose, instead, that synergies in the production process result in a cost of production for the merged firms totaling $9 3 million for a sales volume of $72 million Calculate the total average cost ( AC CindyBobby ) for the merged firm (Round your answer to 2 decimal places )

The Answer is in the image, click to view ...

Question: Cindys Computer Corp. is considering a merger with Bobbys Hard Drive, Inc. Cindys total operating costs of producing services are $5.4 million for a sales

Cindys Computer Corp. is considering a merger with Bobbys Hard Drive, Inc. Cindys total operating costs of producing services are $5.4 million for a sales volume (S_C) of $48 million. Bobbys total operating costs of producing services are $4.5 million for a sales volume (S_B) of $24 million.

Calculate the average cost of production for the two firms. (Round your answers to 2 decimal places.)
If the two firms merge, calculate the total average cost (TAC) for the merged firm assuming no synergies. (Round your answer to 2 decimal places.)
Suppose, instead, that synergies in the production process result in a cost of production for the merged firms totaling $9.3 million for a sales volume of $72 million. Calculate the total average cost (AC_CindyBobby) for the merged firm. (Round your answer to 2 decimal places.)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Paper Company acquired 80 percent of Scissor Company's outstanding common stock for $296,000 on January 1, 20X8, when the book value of Scissor's net assets was equal to $370,000. Problem 3-37...

Cindys Computer Corp. is considering a merger with Bobbys Hard Drive, Inc. Cindys total operating costs of producing services are $3.4 million for a sales volume (SC) of $16 million. Bobbys total...

Cindys Computer Corp. is considering a merger with Bobbys Hard Drive, Inc. Cindys total operating costs of producing services are $5.1 million for a sales volume ( S C ) of $42 million. Bobbys total...

Cindy's Computer Corp. is considering a merger with Bobby's Hard Drive, Inc. Cindy's total operating costs of producing services are $4.3 million for a sales volume (SJ) of $26 million. Bobby's total...

Cindys Computer Corp. is considering a merger with Bobbys Hard Drive, Inc. Cindys total operating costs of producing services are $3.7 million for a sales volume ( S C ) of $14 million. Bobbys total...

Cindys Computer Corp. is considering a merger with Bobbys Hard Drive, Inc. Cindys total operating costs of producing services are $5.2 million for a sales volume ( S C ) of $44 million. Bobbys total...

1) Management accounting plays a role in a planning new products. b evaluating operational processes. c controlling costs. d all of the above. 2) Management accounting, managers are more concerned...

Question. 1. How strong are the competitive forces confronting J. Crew in the market for specialty retail? Include a [Michael Porter] five-forces analysis to support your answer. (see chapter 3 in...

Questions: 1. How strong are the competitive forces confronting J. Crew in the market for specialty retail? [Michael Porter] five-forces analysis to support your answer. (see chapter 3 in the textfor...

Hello - Could you mark the correct answer for each question on the attached study guide please. 1 The Congress Company has identified two methods for producing playing cards. One method involves...

Discuss Issues raise in the case and recommendations on how to resolve the issues. CASE STUDY: MGX GROUP BERHAD In early March 2020, Martin Su drove through the darkened streets of Jalan Dang Wangi...

Puffin Industries acquired all of Sunset Coast Digital's stock on January 1, 2014, for $8,750,000, $5,250,000 in excess of book value. At that time, Sunset Coast's inventory (LIFO) was overvalued by...

The following T-accounts indicate the effects of normal business transactions: Required: 1. Describe the typical investing and financing transactions that affect each T-account. That is, what...

The leader of a country makes a unilsteral decision to cut off frade with another county. What is this declsion - making style called? 2 Unilitieral Minortity rule Presidential Authoritative 2 . 3...

Add "Viggo Mortenslet cast = new Map ( ) ;en " to the cast as the key, with value "Aragorn".