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timurjin [86]
3 years ago
10

It costs Marigold Company $26 per unit ($18 variable and $8 fixed) to produce its product, which normally sells for $38 per unit

. A foreign wholesaler offers to purchase 6200 units at $21 each. Marigold would incur special shipping costs of $2 per unit if the order were accepted. Marigold has sufficient unused capacity to produce the 6200 units. If the special order is accepted, what will be the effect on net income? $18600 increase
Business
1 answer:
olasank [31]3 years ago
7 0

Answer:

$6,200 Increase

Explanation:

Given that,

Costs Marigold Company = $26 per unit

Fixed cost = $8

Variable cost = $18

Selling price = $38 per unit

Foreign wholesaler offers to purchase 6200 units at $21 each.

Shipping costs = $2 per unit

Effect on net income:

= Sales - Variable cost - special shipping cost

= (6,200 × $21) - (6,200 × $18) - (6,200 × $2)

= $130,200 - $111,600 - $12,400

= $6,200 Increase

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Their average wholesale price can be said to be competitive if it is below the all-company average wholesale price in that geographic region.

<h3>When is a price considered competitive?</h3>
  • It means that the price is better than others in the market for a certain good or services.
  • It is lower than the average price offered by other sellers.

The company is therefore charging a lower than average price which is why it is competitive with others because they will be forced to lower prices to maintain sales.

In conclusion, option A is correct.

Find out more on markets that allow competitive pricing at brainly.com/question/24877850.

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2 years ago
Write merits of one dimensional diagrams ?​
Usimov [2.4K]

Answer:

(i) They are readily understood even by those unaccustomed to reading charts or those who are not chart-minded.

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(iii) When a large number of items are to be compared they are the only form that can be used effectively.

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2 years ago
Read 2 more answers
Rosario Company, which is located in Buenos Aires, Argentina, manufactures a component used in farm machinery. The firm’s fixed
julia-pushkina [17]

Answer:

- BEP in unit: 4,000 units;

- In case fixed cost increases by 10%, New BEP in unit: 4,400 units.

- Net income: 1,000,000p.

- BEP in units if sale price to decrease : 8,000 units => Price change should not take place as it moves the company from making 1 million peso profit to a loss as sales in units (1,200 + 5,000 =6,200) is lower than break-even point ( 8,000 units).

Explanation:

Please find detailed calculations as below:

- BEP in unit is calculated as Fixed cost/ Margin earned by one product = 4,000,000/(3,000 - 2,000) = 4,000.

- New BEP in unit is calculated as  New Fixed cost/ Margin earned by one product = (4,000,000 x 1.1)/(3,000 - 2,000) = 4,400.

- Net income: Sales - fixed cost - variable cost = 3,000 x 5,000 - 4,000,000 - 2,000 x 5,000 = 1,000,000 p

- BEP in units if sale price to decrease: Fixed cost/ Margin earned by one product = 4,000,000/(2,500 - 2,000) = 8,000.

4 0
3 years ago
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Pepsi [2]

Answer:

Greece has a comparative advantage in the production of stained glass.

Germany has a comparative advantage in the production of oil.

Greece can gain from specialization and trade as long as it receives more than 4 barrels of oil.

Germany can gain from trade as long as it receives more than 0.1 pane of stained glass.

Trade price in this situation will be 8 barrels of oil per pane of stained glass and 6 barrels of oil per pane of stained glass.

Explanation:

Greece and Germany both produce oil and stained glass.

Greece's opportunity cost of producing a pane of stained glass

= 4 barrels of oil

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Greece has a comparative advantage in the production of stained glass as it has lower opportunity cost.

Greece's opportunity cost of producing a barrel of oil

= \frac{1}{4}

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= \frac{1}{10}

= 0.1 pane of stained glass

Germany has a comparative advantage in the production of oil as it has lower opportunity cost.

Greece can gain from specialization and trade as long as it receives more than 4 barrels of oil. Germany can gain from trade as long as it receives more than 0.1 pane of stained glass.

Both the countries will gain from trade if the trade price lies between their opportunity cost. So trade price in this situation will be 8 barrels of oil per pane of stained glass and 6 barrels of oil per pane of stained glass.

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Eva8 [605]

Answer:

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Explanation:

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