1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
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

You might be interested in
Santiago company incurs annual fixed costs of $66,000. variable costs for santiago's product are $34 per unit, and the sales pri
babunello [35]

Answer: 6250

Explanation:

From the question, we are informed that Santiago company incurs annual fixed costs of $66,000. variable costs for santiago's product are $34 per unit, and the sales price is $50 per unit. santiago desires to earn an annual profit of $34,000.

The contribution margin ratio approach to determine the sales volume in dollars and units required to earn the desired profit for thus:

Contribution margin ratio = (Sales price - Variable cost)/Sales price

= (50-34)/50

= 16/50

= 0.32

Sales = (66,000 + 34,000)/0.32

= 100,000/0.32

= 312,500

Sales volume in units will be sales divided by price. This will be:

= 312,500/50

= 6250

6 0
3 years ago
The shortest possible time an activity can be completed realistically is called ___________ time.
alexira [117]
<span>The shortest possible time an activity can be completed realistically is called crash time. In project management crash time is a method that is used to shorten the length of a project. To do this, the team will decided on a crucial part of the project they can complete in less time than normal. This speeds up the projects completion time and allows for more work to be completed. </span>
6 0
3 years ago
What are persuasive messages
kozerog [31]

Answer:

A message in which you are trying to get the reader to agree with your opinion. This way the walk away with a new perspective over such topic.

3 0
3 years ago
Read 2 more answers
The part of the computer that contain the brain or central processing unit, is also know as the A. Modem b. Monitor. C. System u
timofeeve [1]
The awnser is C. system unit
7 0
3 years ago
What does the word speculation mean to an economist? investing in low-risk stocks with surplus money investing in a type of stoc
Eddi Din [679]
The correct answer among the choices given is the third option. Speculation would mean to an economist as making high-risk investments with borrowed money. It is the purchase of something hoping for it to be more valuable at a certain time.
3 0
3 years ago
Read 2 more answers
Other questions:
  • Assume that sales are predicted to be $4,000, the expected contribution margin is $1,720, and a net loss of $280 is anticipated.
    13·1 answer
  • Choose a real or made up example of a company, and describe at least three fixed costs the company has.
    10·1 answer
  • Mary transferred a life estate in her home to John based on the life of Ned Green. Mary's interest in the property is known as a
    11·1 answer
  • For an organization to grow its market share, it must: a.advertise using multimedia b.lower prices c.exceed minimum standards of
    15·1 answer
  • A college professor was overheard saying, "A management course teaches students about management, not to actually BE managers."
    8·1 answer
  • Will Co. is expected to pay a dividend of $2 per share at the end of year 1(Div1), and the dividends are expected to grow at a c
    10·1 answer
  • Cell Phones for Soldiers is a nonprofit organization with a long-term commitment to one cause. Suppose that FedEx volunteered to
    9·1 answer
  • On March 19, 2015, Karen dies and leaves Larry an insurance policy with a face value of $100,000. Karen is Larry's sister, and L
    15·1 answer
  • ABC company uses the equity method to account for its 40% interestt in voting stock of XYZ company. ABC paid $5,000,000 for inve
    10·1 answer
  • Corina has added animations to objects on a particular slide within a presentation. She needs to reorder the animations. How sho
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!