Answer:
B) Increases profits by $700.
Explanation:
We must perform an incremental analysis of the costs and revenues generated by the alternative course of action which is offering the package:
Current income:
ballroom rent $4,500
<u>extras $800</u>
total current income = $5,300
Alternative action income:
wedding package $6,000
opportunity cost ballroom rent $4,500
<u>opportunity cost extras $800 </u>
net income increase = $700
D. Inelastic.
Hope this helps!
:3
Answer:
B) costs that change with the level of production.
Explanation:
Variable costs are costs that change according to the total production output.
The two main cost components in the production process are fixed costs, which remain to be paid even if the firm shuts down temporarily, and variable costs, which are subject to change according to the level of production.
Therefore, the answer is alternative B)
Answer:
a.$75,508
Explanation:
Newham Corporation
Break Even Sales = Fixed Expenses/ 1- (Variable Expenses/ Sales)
We combined the Break Even Sales by adding the sales of the two products and the variable expenses of the two products.
Break Even Sales =$46,060/1-($10,780+$18,470/$31,000+ $44,000)
Break Even Sales =$46,060/1-(29250/75,000)
Break Even Sales =$46,060/ 1-0.39
Break Even Sales =$46,060/ 0.61
Break Even Sales = $75,508.19
