The cost of underestimating the demand is considered a revenue loss that arises due to cancellation of flight costing $134. Hence, cost of underetimating the demand is
.
The cost of overestimating the demand is known as rewards. For example, free round trip ticket worth $263. Hence, the cost of overestimating the demand is
.
The z-score that yields a p-value of 0.3375 is -0.4193.
Thus, super discount airlines should overbook the flight by 35 + (-0.4193 x 24) = 35 - 10.0632 = 24.9368 = 25 seats.
Therefore, super discount airlines should overbook the flight by 25 seats.
Answer:
Explanation:
Reorder point quantity is the level at which an inventory is expected to be restocked , calculated by finding the sum of demand over the lead time and the safety stock days
Daily usage = 800 feet / day
Lead time = 6 days
Desired service level = 95%
Risk level = 1-0.95 =0.05
safety stock at 0.05 = 1800
Reorder point = expected demand in (LT) + safety stock
= (800*6) + 1800
= 4800+1800 = 6600 feet.
Answer:
$10,000
Explanation:
Given that
Total revenue is $70,000
Total fixed cost is $40,000
And, the total variable cost is $10,000
According to the given situation, the computation of profit is shown below:-
Profit = Total Revenue - Total Fixed cost - Total variable cost
= $70,000 - (10,000 × $4) - 10,000
= $70,000 - 40,000 - 10,000
= $10,000
Therefore for computing the profit we simply applied the above formula.
Answer:
Feb. 1 DR Cash $400,000
CR Tax anticipation notes $400,000
Dec 31 DR Expenditures - Interest $3,666.67
CR Accrued Interest Payable $3,666.67
Working
February to December = 11 months
Interest = 400,000 * 1.0% * 11/12 months = $3,666.67
April 1 DR Investments $100,000
CR Cash $100,000
Sept. 30 DR Cash $50,200
CR Investments $50,000
Interest Income $200
Working
Interest Income = 50,000 * 0.8% * 6/12 months
= $200
Answer:
$72,679.976
Explanation:
The computation of present value is shown below:-
Present value = Future value ÷ (1 + Rate of return)^Number of years
= $95,000 ÷ (1 + 3.9%)^7
= $95,000 ÷ (1 + 0.039)^7
= $95,000 ÷ (1.039)^7
= $95,000 ÷ 1.307100055
= $72,679.97553
or
= $72,679.976
Therefore for computing the present value we simply applied the above formula.
