Answer:
Efficiency variance = $851 favorable
Explanation:
<em>Variable overhead efficiency variance: A variance is the difference between a standard cost and the actual cost. Variable overhead efficiency variance aims to determine whether or not their exist savings or extra cost incurred on variable overhead as a result of workers being faster or slower that expected.
</em>
<em>Since the variable overhead is charged using labour hours, any amount by which the actual labour hours differ from the standard allowable hours would result in a variance</em>
To calculate this variance, we do as follows:
Hours
4,700 should have taken(4,700 × 0.70 hrs) 3,290
but did take (i.e actual hours) 480 <u> 3,060</u>
Efficiency variance in hours 70 unfavorable 230 favourable
Standard variable overhead rate <u>× $3.70</u>
Efficiency variance <em> </em><u><em> 851
</em></u>
Efficiency variance = $851 favorable
<em> </em>
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Answer:
False
Explanation:
If Jake decides to increase total sales volume by decreasing the price of its engines, the decrease in price is too large compared to the increase in quantity demanded. The number of engines sold will increase from 5 to 6 (1 more unit) while the price of each engine will decrease from $75,000 to $50,000.
In this scenario, engines are price inelastic:
PED = % change in quantity demanded / % change in price = [(6 - 5) / 5] / [($50,000 - $75,000) / $75,000] = (1 / 5) / ($25,000 / $75,000) = 0.2 / 0.33 = 0.6
when PED is less than 1, the demand is inelastic. This means that a decrease in price will result in a smaller proportional increase in quantity demanded.
Answer:
Psychological pricing
Explanation:
Psychological pricing also known as price ending, charm pricing is a pricing and marketing strategy based on the theory that prices produces a psychological impact. This involves setting prices as odd prices being a little less than a whole number such as $9.99 or £2.99. It is believed that consumers think that this prices are lower than they actually are.
Answer:
a. Global used $20 million of its available cash to repay $20 million of its long-term debt.
Explanation:
To find the fixed cost, we need add all costs that do not change with the number of haircuts. These are the salaries of the barbers and the manager bonus, the advertisement fees, rent and the magazines. We also have the standard part of the utility payment, the 170$. Those add up to:
6*1310+520+280+980+20+170=9830$. We also have regarding the variable costs:
The utilities variable part are included since they depend on haircuts, barber supplies and the base rate of each barber per haircut. Hence those are:
(5.90+0.38+0.27 per haircut)=6.55$ per haircut
