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Leya [2.2K]
3 years ago
13

For a manufacturing company, selling price for an item is $472.00 per Unit, Variable cost is $235.00 per Unit, rent is $7,880.00

per month and insurance is $3000 per month. What is the contribution margin?
Business
1 answer:
vredina [299]3 years ago
3 0

Answer:

$237.00

Explanation:

Contribution margin = Selling Price  - Variable Cost

Contribution margin= $472 - $235

Contribution margin= $237.00

You might be interested in
Two isolated nations, Alphaland and Betaton, are considering opening their borders to trade with each other. Both nations consum
Artist 52 [7]

Answer:

5 tons of salt for 1 ton of pepper

10 tons of salt for 1 ton of pepper

Explanation:

Alphaland's opportunity cost of producing one ton of pepper = 80 ÷ 5

                                                                            = 16 tons of salt

Betaton's opportunity cost of producing one ton of pepper = 3 ÷ 1

                                                                            = 3 tons of salt

Alphaland's opportunity cost of producing one ton of salt = 5 ÷ 80

                                                                            = 0.0625 tons of pepper

Betaton's opportunity cost of producing one ton of salt = 1 ÷ 3

                                                                            = 0.3333 tons of pepper

Therefore, Betaton has a comparative advantage in producing pepper because it has the lower opportunity cost of producing pepper as compared to Alphaland. On the other hand, Alphaland has a comparative advantage in producing salt because it has the lower opportunity cost of producing salt as compared to Betaton.

Hence, Betaton is specialized in the production of pepper and Alphaland is specialized in the production of salt.

Trade is beneficial for both the nations when Alphaland buys pepper at a price lower than the 16 tons of salt and Betaton sells pepper at a price greater than 3 tons of salt.

Trade ratios:

5 tons of salt for 1 ton of pepper

10 tons of salt for 1 ton of pepper

7 0
3 years ago
Mark owns his own business and wants to make sure that his employees arrive on time each day and take breaks as specified. He ha
olga2289 [7]

Operant conditioning is used by Mark .

<h3><u>Explanation:</u></h3>

The instrumental conditioning is the other name given for operant conditioning. It can be considered as a method of learning in which  rewards and punishments are used for modification of certain behaviors. This forms a relativity between certain behavior and the consequences of that behavior.

In the example given, Mark has decided to give rewards in order to make his employees to reach office at time. Monthly rewards are given to those employees who did not take breaks and thus he is using the principle of Operant conditioning .

6 0
3 years ago
Your financial analyst calculated the following ratios for three companies: Boeing Microsoft PG&amp;E Cash ratio 0.15 0.1 0.1 Cu
MaRussiya [10]

Answer: Not necessarily: The debt ratios are not directly comparable, since each company is in a different industry.

Explanation:

We cannot authoritatively state that even though Boeing has such a high debt rate, that it is a riskier company than either Microsoft or PG&E. This is due to the drawback in ratio analysis of bias if compared across different industries.

Ratio analysis best works when comparing companies in the same industry because their situations will be similar. Comparing across industries can be misleading because different industries operate in different ways. In the Airplane manufacturing business for instance, having a high amount of debt due to having the tangible assets to back it up might be a normal thing.

The debt ratios are therefore not directly comparable because each company is in a different industry.

7 0
3 years ago
Which of the following is the most profitable investment for a game shop earning 2 profit from every game sold
stira [4]

Answer:  3 profit

Explanation:

6 0
3 years ago
Charlie’s Furniture Store has been in business for several years. The firm's owners have described the store as a "high-price, h
wolverine [178]

Answer:

a. Calculate current sales and ROI for Charlie’s Furniture Store.

asset turnover formula = net sales / average assets

0.4 = net sales / $800,000

net sales = $320,000

ROI = net income / investment

net income = $320,000 x 34% = $108,800

ROI = $108,800 / $800,000 = 13.6%

b. Assuming that the new strategy would reduce margin to 20%, and assuming that average total assets would stay the same, calculate the sales that would be required to have the same ROI as Charlie’s currently earns.

net income = net sales x 20% (new margin)

net sales = $108,800 / 20% = $544,000

c. Suppose you presented the results of your analysis in parts a and b of this problem to Charlie, and he replied, "What are you telling me? If I reduce my prices as planned, then I have to practically double my sales volume to earn the same return?" Given the results of your analysis, what is the actual amount of increase in sales required?

sales increase = ($544,000 - $320,000) / $320,000 = 70% increase

d. Now suppose Charlie says, "You know, I'm not convinced that lowering prices is my only option in staying competitive. What if I were to increase my marketing effort? I'm thinking about kicking off a new advertising campaign after conducting more extensive market research to better identify who my target customer groups are." In general, explain to Charlie what the likely impact of a successful strategy of this nature would be on margin, turnover, and ROI.

An extensive market research and a "successful" marketing campaign are generally expensive. Even if the marketing campaign is really successful in increasing sales, costs would also increase. So the equation may or may not change, depending if the contribution margin of the additional units sold will be able to cover the expenses of a complex marketing campaign. If you spend $100 to earn $100 more, your situation hasn't changed at all. Which means that net income may or may not increase, therefore, the profit margin, ROI and asset turnover may not change.

7 0
3 years ago
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