Why can trendy items be made more cheaply than wardrobe staples?
1 answer:
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Answer:
1) Colt Carriage Company
Income Statement
For the month ended April 202x
Revenues:
- Adults passengers $186,300
- Children $81,000
- Total revenues $267,300
Variable costs:
- City fees $26,730
- Souvenirs $7,425
- Brokerage fees $11,340
- Carriage drivers $52,650
- Total variable costs <u>$98,145</u>
Contribution margin $169,155
Period costs:
- Depreciation $2,900
- Horse leases $48,000
- Marketing expenses $7,350
- Payroll expenses $7,600
- Total period costs <u>$65,850</u>
Operating profit $103,305
2) If the total amount of passengers increase by 10%, then all variable costs will increase by 10% except brokerage fees which would increase only by 6%. Revenues should also increase by 10%. Period costs should not change.
Contribution margin should increase by 10.29% and operating profit would increase by 16.81%.
Explanation:
since the information is not complete, I looked it up:
Revenues
13,500 passengers:
8,100 x $23 = $186,300
5,400 x $15 = $81,000
total $267,300
variable costs:
fees paid to the city 10% of total revenue
souvenirs $0.55 per passenger
brokerage fees 60% of total tickets x $1.40
carriage drivers $3.90 per passenger
fixed costs:
depreciation $2,900
horse leases $48,000
marketing expenses $7,350
payroll expenses $7,600
Question:
The question is incomplete. See the complete question below and the graph.
You are given the following data;
Cost = C = $12,000.00
w = $100.00 per unit of labor
r = $100.00 per unit of capital
These data are used to construct the isocost line (C) in the diagram to the right. Suppose the wage increases to $200.00 but that the firm chooses to keep using the same amount of labor and capital to produce 200 units of output. Given this new set of factor prices (w'=$200.00, r = $100.00), how much have costs changed if the set of input choices remains at point A? Enter a numeric response using a real number rounded to two decimal places.)
Answer:
Cost change = $6,000
Explanation:
Given Data:
Cost = C = $12,000.00
w = $100.00 per unit of labor
r = $100.00 per unit of capital
Calculating the cost incurred at point A using the equation of iso-costline C¹, we have;
C = wl + rk
where;
C = total cost
w = price of labor = $100
l = labor = 60 unit from the graph
k = capital = 60 unit from the graph
r = price of capital = $100
Substituting into the formula, we have
C = wl + rk
= 100*60 + 100*60
= 6000+6000
= $12,000
For increase in wages(w= $200, r = $100) with same amount of labor and capital, the cost incurred becomes;
C = wl + rk
= 200*60+100*60
= 12,000 + 6000
= $18,000
Therefore,
Cost change = 18000-12000
= $6,000
See the attached graph.
