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galina1969 [7]
3 years ago
12

Micro Enterprises has the capacity to produce 10,000 widgets a month, and currently makes and sells 9,000 widgets a month. Widge

ts normally sell for $6 each, and cost an average of $5 to make, including fixed costs. The monthly fixed costs are $18,000. Coyote Corp. has offered to buy 1,000 widgets at $4 each. Assuming the same story, but Coyote's offer is for 1,500 units (all or nothing), should the offer be accepted?
Business
1 answer:
balu736 [363]3 years ago
6 0

Answer:

The order for 1,500 at $4 should be rejected. It will imply omre work for no extra income.

Explanation:

First, we need to check for the cost structure of Micro Enterprises

9,000 x $5 average cost = 45,000 total cost

total cost = fixed cost + variable cost

45,000 = 18,000 + 9,000 x variable cost per unit

(45,000  - 18,000) / 9,000 = variable per unit

variable per unit = 3

Now we calculate the the special order

<em>sales revenue for the proposed deal:</em>  1,500 x 4 = 6,000

<em>variable cost for the widget:</em>                 1,500 x 3 = (4,500)

<u>opportunity cost:</u>

we resing the contribution for 500 units in the local marke

this units selling price is $6 and their cost is the same $3

                   500 x (6  -  3 )  =                                     (1,500)

                             net differencial analysis                      0

It should be rejected. as it would not modify the net income

<u></u>

<u>We could prove this by building the incomefor each scenario</u>

<u></u>

<u>if not accepted:</u>

9000 x ( 6 - 3 ) -18,000= 9,000

<u>if accepted:</u>

8500 x (6-3) + 1,500 x (4-3) - 18,000 = 9,000

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Dividends:  

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Therefore, If Bean's equity cost of capital is 12%, then the price of a share of Bean's stock is closest to $27.75

8 0
2 years ago
A mother earned ​$ 7500.00 from royalties on her cookbook. she set aside​ 20% of this for a down payment on a new home. the bala
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Amount of money deposited in the two accounts is 80% of 7500$.
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Now assume that the amount deposited in CD account is m and the amount deposited in the saving bond is n.
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Now we write another equation expressing the savings:
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Substitute with equation I in equation II:
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Which of the following statements is true? Group of answer choices If current Real GDP is greater than Natural Real GDP, the eco
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Classical economists believe that the economy is self-regulating. This means that if the economy is not at equilibrium, it will return to equilibrium if it is left without interference.

For this to happen, inputs such as wages have to flexible to enable them to adjust to market conditions and thus take the Economy back to equilibrium.

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<h3>What is output?</h3>
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To learn more about output from the given link :

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