Answer:
a. Toby is not maximizing his utility
b. Toby should reduce his spending on cashew and increase his spending on peanuts.
Explanation:
a. Is Toby maximizing his total utility from the kinds of nuts? If so, explain how you know.
Toby will maximize his utility when we have:
MUp/Pp = MUc/Pc
Where;
MUp/Pp = Marginal utility of peanut divided by price of peanut = 100/10 = 10
MUc/Pc = Marginal utility of cashew divided by price of cash = 200/25 = 8
From the above, Toby is not maximizing his utility. I am able to know this because MUp/Pp > MUc/Pc (i.e. 10 > 8). An Toby will only maximize his utility when MUp/Pp = MUc/Pc.
b. If not, how should he rearrange his spending?
Since MUp/Pp > MUc/Pc (i.e. 10 > 8), Toby should reduce his spending on cashew in order to increase MUc and increase his spending on peanuts reduce MUp until MUp/Pp = MUc/Pc.
Solution :
Particulars 
Sales $
$
$
$
Variable expenses 588,000 208000 180000 200000
Contribution margin 912000 192000 420000 300000
Traceable fixed 770,000 240,000 330,000 200,000
expenses
Geographic market 142,000 -$48000 $90000 $100000
segment expenses
Common fixed
expenses not traceable
to geographic markets
Net operating income
Answer:
See attachment for 1 and 2
Explanation:
Number 2 (continuation)
ISP should process the soy meal into soy cookies because that increases profit by $263. However, ISP should sell the soy oil as is, without processing it into the form of Soyola, because profit will be $56 higher if they do. Since the total joint cost is the same under both allocation methods, it is not a relevant cost to the decision to sell at splitoff or process further.
Answer:
Variable cost per unit= $6.5 per unit
Fixed costs= $3,750
Explanation:
Giving the following information:
Month - Number of Appointments - Total Cost
January: 375 $5,050
February: 350 $5,500
March: 200 $5,200
April: 500 $7,000
May: 400 $5,650
June: 300 $5,200
To calculate the variable and fixed costs, we need to use the following formulas:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (7,000 - 5,050) / (500 - 200)= $6.5 per unit
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 7,000 - (6.5*500)= $3,750
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 5,050 - (6.5*200)= $3,750
