Answer:
a. $11
b. $35
c. If the transferring division does not have excess capacity,this would mean that some units that could have been sold externally would be transferred internally and this creates an opportunity cost. Opportunity costs increase the transfer price.However no opportunity cost exist if transferring division has excess capacity and hence a lower transfer price.
Explanation:
The minimum acceptable price is the price that is acceptable to the transferring division and out of a range of acceptable prices, it is that which would be the best for the company.
When there is excess capacity.
Note : No opportunity costs would exist.
Minimum acceptable price = Variable Cost - Internal Savings + Opportunity Cost
= $11
When there is excess capacity.
Note : Opportunity costs would exist.
Minimum acceptable price = Variable Cost - Internal Savings + Opportunity Cost
= $11 + ($35 - $11 )
= $35
Why Capacity of transferring division (Small Motor Division) has an effect on the transfer price.
If the transferring division does not have excess capacity,this would mean that some units that could have been sold externally would be transferred internally and this creates an opportunity cost. Opportunity costs increase the transfer price.However no opportunity cost exist if transferring division has excess capacity and hence a lower transfer price.
Answer:
Option (b) is correct.
Explanation:
Given that,
Initial price of good A = $50
Initial quantity demanded of good A = 500 units
New price of good A = $70
New quantity demanded of good A = 400 units
Average quantity demanded:
= (New + Initial) ÷ 2
= (400 + 500) ÷ 2
= 450 units
Change in quantity demanded:
= New - Initial
= 400 units - 500 units
= -100 units
Average price level:
= (New + Initial) ÷ 2
= (70 + 50) ÷ 2
= $60
Change in price level:
= New - Initial
= $70 - $50
= $20
Therefore, the price elasticity of demand for good A is as follows:
=
=
=
= -0.67
Total revenue before price increase:
= quantity demanded of good A × price of good A
= 500 units × $50
= $25,000
Total revenue after price increase:
= quantity demanded of good A × price of good A
= 400 units × $70
= $28,000
Therefore, there is an increase in total revenue with increase in the price level.
it will rest lightly on the pinky finger on the right hand
The correct answer to this situation is the following.
Well, here we are facing an ethical dilemma. Alex thought that she "played her cards" optimally and benefited from the situation. The companies acted in "goodwill" and pay as promised all the expenses when they both sent the checks a weel later. But that is not the kind of conduct that is expected from an ethical professional. She is cheating in order to get money from the companies.
What she should have done is be honest and candidly express the real situation. That should have shown that she is a person of high values that respects the hard-earned money of the company and that she always acts with class, being honest and open.
Answer
Today’s markets involve demand and supply which are defined by quality of sensible selection rather than price (matchmaking).
Explanation
For example the school admission program in a city X allows only few students to proceed to the schools they want because the students were left with limited choices that do not allow for proper matching. This is so because first the selection was done by mail where the students ticked the school they wanted then the list is returned to the school to await selection results. The ticked option is over-picked by many students making the extra number shifted to other schools which they did not select. No right matching was made here.