Answer:
D. This agreement is not in the best interest of society, because there will be less competition and the price of cell phones will be significantly below marginal cost.
Explanation:
If the market for cell phones is an oligopoly market(Oligopoly market is a market situation where few firms are dominating the market), and the consumption and production of cell phone generate no negative externalizes and the major companies desired to collude and charge a single price for their product then this agreement is not in the best interest of society, because there will be less competition and the price of cell phones will be significantly below marginal cost.
Answer:
$680,000 vs $440,000
Explanation:
Total Costs to Make :
Manufacturing Costs ($34 x 20,000) $680,000
Total $680,000
Total Cost to Buy :
Purchase Price ($28 x 20,000) $560,000
<u>Less Savings :</u>
Fixed overhead ($6 x 20,000) ($120,000)
Total Cost $440,000
Predatory pricing is a dangerous and doubtful pricing strategy
where a product or amenity is fixed at a very small price, proposing to drive opponents
out of the market, or make barriers to access for potential new opponents. The
company expressively raised its prices after its competitors were forced out of
the market. And the company purposely set its prices below its average variable
costs. This can prove that a business is engaged in predatory pricing.
Answer:
Explanation:
Overhead allocated to Product X = Department A overhead cost+ Department B overhead cost
= $51,157.84+$5755.62=
= $56,913
Calculations:
Using a single-driver allocation system, with direct labor hours as the driver, how much overhead was allocated to Product X:
Department A's Overhead rate per labor hour = Overhead costs/Total direct labor hours = $4300000/60000 hours = $71.66 per hour
Overhead (Department A) = $71.66per hour*724 labor hours
= $51,157.84
Department B's Overhead rate per labor hour = Overhead costs/Total direct labor hours = $2200000/60000 hours = $36.66 per hour
Overhead (Department A) = $36.66 per hour*157 labor hours
= $5755.62
