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lutik1710 [3]
3 years ago
11

Kate's 24-Hour Breakfast Diner menu offers one item, a $5.00 breakfast special. Kate's costs for servers, cooks, electricity, fo

od, etc. average out to $3.95 per meal. Her costs for rent, insurance cleaning supplies and business license average out to $1.25 per meal. Since the market is highly competitive, Kate should:
a. keep the business open in the short-run, and plan to expand the business in the long-run
b. raise her prices above the perfectly competitive level set by the market
c. keep the business open in the short-run, but plan to go out of business in the long-run
d. lay-off her staff break her lease, and close the business down immediately
Business
1 answer:
REY [17]3 years ago
6 0

Answer:

The correct answer is option c.

Explanation:

The price of Kate's breakfast special is $5.

The average variable cost is $3.95.

The average fixed cost is $1.25.

The average total cost

= $3.95 + $1.25

= $5.20

The price is not covering the average total cost but it is covering the average variable cost. The firm can continue operating in the short run but stop production in the long run.

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This video speeds through over 10 common mistakes people make that leave them open to identity theft. list at least 5 of them he
Vikentia [17]

Leaving Your Mail Unguarded. ...

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Using an Insecure Internet Connection.

3 0
2 years ago
On December 1, 2021, the company received $9,000 in cash from another company that is renting office space in Falwell’s building
MrMuchimi

Answer:

From all indications,the two rents received have been posted wrongly, I want to believe that you are required to post the adjusting entries,hence my answer below:

The first $9000 was posted to deferred revenue,whereas only two months should have been

First rent:

DR Deferred revenue $3000

CR Revenue                 $3000

Second Rent

DR Revenue                  $6000

CR Deferred revenue    $6000

Explanation:

The first $9000 was posted to deferred revenue,whereas only two months should have been deferred and December rent recognized as rent.

As far as the second rent is concerned only one month has been earned,as a result the revenue should be credited with just $3000  for December.

This then mean that revenue from the second property has been overstated in December by $6000,this necessitated by adjustment above.

8 0
3 years ago
Think of a firm that has attained a differentiation focus or cost focus strategy. Are its advantages sustainable? Why? Why not?
quester [9]

Answer:

Yes they are sustainable

Explanation:

The strategies mentioned in the question were laid out my Michael Porter and therefore, we can look analyse his model to understand whether these strategies are sustainable or not.

Porter has categorized strategies into 3 broad categories: Cost Leadership, Differentiation, and Focus strategies (all three are known as "Generic Strategies). Focus strategy is branched out into two sub-segments known as Cost Focus and Differentiation Focus.

Now, the question has already clarified that the strategies in question are both focus strategies. So lets understand what each entails.

Differentiation Focus: A strategy in which the company aims to gain market leadership in a focused market (a specific market) through strategic differentiaion. This strategic differentiaion involves offering a specialized service or a unique product in a niche market. Cost focus strategy is similar in the sense is that that the aim is to offer highly low cost products/services to a niche market. Because of the focus on these niche markets, company's develop a strong understansing of the consumer thereby developing strong brand loyalty with that particular customer base. The key ingredient, again, is that the competitive advantage is being harnessed by focusing just on a particular niche market. Another key component is that the companies using this strategy rely on the consumers in the target market having different needs, tastes, and requirements than consumers in other segments in the industry.

Now, these strategies by desig were put forth my Porter has being sustainable. Hence the term "generic strategies" in that they can be broadly used to create and sustain performance. The focus strategies as defined above are sustainable since they harness the power of having priority knowledge of their target market to provide appropriate services and products. The high brand loyalty and knowledge of consumers give them an edge over competitors (competitive rivalry). Supplier power depends on the nature of products being offered therefore it cant be taken into consideration. Buyer power can be managed since you are prodiving unique service offerings to unique customers. Threat of substitution depends on the product and service offering. Threat of new entry by larger player exists, but due to the focus that the company had in the target market, barriers to entry (long strong brand loyalty) can be developed.

7 0
3 years ago
Johnston Company wants to double production of Product X from 1,000 units to 2,000 units. The variable manufacturing cost per un
ratelena [41]

Answer: C - $30,000

Explanation: Johnston Company wants to double production of Product X from 1,000 units to 2,000 units.

The variable manufacturing cost per unit is $10. The variable non manufacturing cost per unit is $20.

The selling price per unit is $50

To increase production by 1000 units

Total cost is $10 + $20 = $30

Total incremental cost = 1,000 * $30= $30,000

7 0
3 years ago
Which expense has to be incurred at the time of Production?<br> a)fixed<br> b)variable
Setler [38]
Both but fixed goes first so a is correct
7 0
2 years ago
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