Answer:
The correct answer is option c.
Explanation:
In order to increase the revenue, the firm should increase the price when the demand is inelastic. Inelastic demand means that a change in price will cause a less proportionate change in quantity demanded.
So when the price is increased it will lead to a less proportionate decrease in the quantity demanded. As a result, the total revenue will increase.
Answer:
Crane Company is planning to sell 870000 units for $1.50 per unit. The contribution margin ratio is 20%. If Crane will break even at this level of sales, what are the fixed costs?
$261,000 would be the fixed cost
Explanation:
870000 X $1.50= $1,305,000
20/100= 0.2
0.2 X 1,305,000= $261, 000
The price will rise because the manufacturer a cannot meet the demand so it will be harder to get the product
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Answer:
higher under absorption costing than under variable costing.
Explanation:
Costing is the measurement of the cost of production of goods and services by assessing the fixed costs and variable costs associated with each step of production.
Manufacturing costs can be defined as the overall costs associated with the acquisition of resources such as materials and the cost of converting these raw materials into finished goods. Manufacturing costs include direct labor costs, direct materials cost and manufacturing overhead costs.
In Business management, when the total units of goods produced by a business firm (manufacturer) exceed the total units of goods sold, net income will generally be higher under absorption costing than under variable costing.
