Suppose that the total revenue received by a company selling basketballs is $600 when the price is set at $15 per basketball and
1 answer:
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Answer:
$633,000.
Explanation:
We use the High-low method to get the cost formula:
This means 5,000 machine hours generate 140,000 labor cost
We divide and get the variable cost generate per machine hour:
Cost 140000
machine hours 5000
140,000/5,000 = 28
variable cost 28
Next, we use this to calculate the fixed cost:
total cost = variable cost + fixed cost
fixed cost = total cost - 28 X DL
<u>High:</u>
Total Cost 710,000
Variable 399,000 (14,250 x 28)
Fixed Cost 311,000
<u>Low:</u>
Total Cost 570,000
Variable 259,000 (9,250 x 28)
Fixed Cost 311,000
Now with the cost formula we solve for 11,500 machine hours
cost = 311,000 + 28 X Machine Hours
cost = 311,000 + 28 x 11,500
cost = 633,000
Answer:
(a)
(b)
(c) X=4.975 percent
Explanation:
(a) Find the z-value that corresponds to 5.40 percent
.
Hence the net interest margin of 5.40 percent is 2.5 standard deviation above the mean.
The area to the left of 2.5 from the standard normal distribution table is 0.9938.The probability that a randomly selected U.S. bank will have a net interest margin that exceeds 5.40 percent is 1-0.9938=0.0062
(b) The z-value that corresponds to 4.40 percent is The net interest margin of 4.40 percent is 0.5 standard deviation above the mean.
Using the normal distribution table, the area under the curve to the left of 0.5 is 0.6915
Therefore the probability that a randomly selected U.S. bank will have a net interest margin less than 4.40 percent is 0.6915
(c) The z-value that corresponds to 95% which is 1.65
We substitute the 1.65 into the formula and solve for X.
A bank that wants its net interest margin to be less than the net interest margins of 95 percent of all U.S. banks should set its net interest margin to 4.975 percent.
