Answer:
$195000.05
Explanation:
His fixed costs and variable costs must be made equal to his selling price in order to gauge the break even point in hours.
$78000 + $21x = $35x
78000 = 35x - 21x
78000 = 14x
x = 5571.428...
Rounded of : x = 5571.43 hours
break even point in terms of sales dollars :
5571.43 x 35 = $195000.05
Answer:
The expected profit from the addition is $47,000
Explanation:
Total Addition can be calculated by netting expected values of all situations as follow:
Expected value = %Chance x additional Profit/loss
i Expected profit = 50% x $100,000 = $50,000
ii Expected profit = 30% x $0 = $0 (Profit is same there is no addition)
iii Expected profit = 20% x ($15,000) = ($3,000)
The expected profit from the addition = $50,000 + ($3,000) = $47,000
Answer:
a) Loss Aversion
b) Mental Accounting
c) Status Quo Bias
d) Misperceiving opportunity cost
e) Overconfidence
Explanation:
a) In Alexander's case, he is suffering from the Loss Aversion theory that is very prevalent in Economics where some people prefer not losing money as opposed to actually gaining money. Alexander does not want to lose the money he invested and so is holding on hoping to get back his money so he doesn't lose anything.
b) In Jim's case, he practices mental accounting. This is a situation where people group their various money related transactions in different groups in their mind and ascribe them different values. Jim did not attach enough value to the money he found though and so just decided to spend it.
c) Geneva faces Status quo bias which is a situation where one prefers things the way they are. She freezes every time big question is asked of her and just let's things continue the way they are every time. She faces the Status Quo Bias.
d) Tiffany misperceived her Opportunity Cost when she failed to calculate the transport cost associated with the job she took. Had she not done so, she would have factored in the correct Opportunity Cost and seen that it might be better to take the job closer to her.
e) Steve is overconfident in his ability to start a diet. He has been failing at doing so and yet believes he can do so. It is important therefore that he finds something else to spur him ti start the diet because his confidence in doing it himself is clearly a farce and does not match what he actually can do.
Answer:
The monthly fixed manufacturing cost is $7500.
Explanation:
Variable cost per unit = change in total cost / change in no of units
= 6900-5000/8000-4200
= 0.5 per unit
Fixed cost = Total manfacturing cost - variable cost at a 4200 level
= 5000 - (4200*0.5)
= 5000 - 2100
= $2900
If company produces 9200 units:
Total manfacturing costs = fixed costs + 9200*variable cost per unit
= 2900 + (9200*0.5)
= $7500
Therefore, The monthly fixed manufacturing cost is $7500.
Answer
The answer and procedures of the exercise are attached in the following images.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
