1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
svp [43]
3 years ago
9

A company produces 1,000 packages of chicken feed per month. The sales price is $4.00 per pack. Variable cost is $1.50 per unit,

and fixed costs are $1,700 per month. Management is considering adding a vitamin supplement to improve the value of the product. The variable cost will increase from $1.50 to $1.90 per unit, and fixed costs will increase by 20%. The company will price the new product at $5 per pack. How will this affect operating income? (Hint: Compare the increase in revenue to the increase in cost.)
Business
1 answer:
OlgaM077 [116]3 years ago
7 0

Answer:

It is more profitable to add the vitamin and sell the product for $5. Income will increase by $260

Explanation:

Giving the following information:

The number of units= 1,000 packages

Actual:

Selling price= $4.00 per pack.

Variable cost is $1.50 per unit

Fixed costs are $1,700 per month.

New option:

Selling price= $5

Variable cost= $1.9

Fixed costs= $2,040

We need to calculate the net income of both options, and choose the more profitable one:

Actual:

Net income= 1,000*(4-1.5) - 1,700= $800

New:

Net income= 1,000*(5 - 1.9)- 2,040= $1,060

It is more profitable to add the vitamin and sell the product for $5.

You might be interested in
15. If you are the kind of person who wants to succeed in whatever you do, you value
dmitriy555 [2]

Answer:

The correct answer is letter "B": achievement.

Explanation:

<em>Highly-competitive</em> individuals tend to focus on the results of their activities, or, in other words, in their achievements. This characteristic of people makes them push themselves to their limits to find out how far they can go o they can accomplish their goals. Individuals who pay special attention to their achievements have little to no tolerance for failure.

3 0
3 years ago
If a specific subsidy​ (negative tax) of s is given to only one competitive​ firm, how should that firm change its output level
elena-s [515]

Answer:

The correct answer is option D.

Explanation:

The market price is P.

The marginal cost is given at MC.

The subsidy is equal to s.  

When the subsidy is provided to only a single firm, that firms marginal cost will decline. The firm can take advantage of decreased marginal cost by increasing the output level. The firm will produce the output where the price and marginal revenue is equal to marginal cost plus subsidy. At this point, the firm will be having maximum profit.

So, the firm will increase production until

P=MC+S

6 0
3 years ago
What are some business plan questions
inysia [295]

What business are you in? The question sounds easy enough. ...

How will the business make money? ...

What does your business need to get off the ground? ...

What is the operating budget? ...

Who are your customers? ...

How will you reach your customers? ...

What sets you apart from the competition? ...

What are your strengths and weaknesses?

What business are we in? ...

What is the vision and mission of the company? ...

Who is our customer? ...

What does our customer value? ...

What is our target market? ...

What products and services do we provide? ...

What is our sales and marketing strategy?

3 0
3 years ago
Click this link to view O*NET’s Skills section for Film and Video Editors. Note that common skills are listed toward the top, an
olasank [31]

Answer:

B, C, and E

Explanation:

6 0
3 years ago
Read 2 more answers
If sales volume increases and all other factors remain constant, then the:______.
Montano1993 [528]

If sales volume increases and all other factors remain constant, then the Margin of safety will increase

Explanation:

The margin for safety (MOS) is described as an overall excess of current or expected revenue, expressed either in terms of currency or in units, or as a percentage of total revenues.

One of the main ways to increase the safety margin is through increasing the gross value per unit (if business conditions are favourable) and by reducing the variable cost per unit of the good. This can be accomplished by rising selling costs.

6 0
3 years ago
Other questions:
  • Sonia goes to have her hair trimmed and agrees to pay $40 to the stylist. while there, sonia decides that she would also like hi
    11·1 answer
  • What is the nash equilibrium for this​ game?
    14·1 answer
  • A natural monopoly can occur when the average cost of making a good _____ a lot as output increases.
    11·2 answers
  • Using the Cuusoo System, Lego develops ideas that are generated by the many children and adults who create a model, take photos,
    9·1 answer
  • You are one of nine partners of MobileWorks, a partnership organized to manufacture and sell mobile networking devices. You rece
    10·1 answer
  • The simple structure usually depends on _____ to coordinate work activities, so it is very difficult to operate as the company g
    10·1 answer
  • Determine the account and amount to be debited and the account and amount to be credited for the following adjustment. Equipment
    7·1 answer
  • What are two factors used to determine a credit score? Explain how they indicate good or poor credit. Write in complete
    12·1 answer
  • . Which one of the following statements is TRUE?
    15·1 answer
  • Prepare a contribution format income statement at the company's break-even point that shows the appropriate levels of sales for
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!