Answer:
One of the great dangers in allocating common fixed corporate costs is that such allocations can make a product line look less profitable than it really is.
Explanation:
Therefore, care must be exercised so that a product line is not eliminated because the common fixed costs have been allocated to it such that it becomes unprofitable. This is why it is necessary to identify activity cost pools into which such fixed costs can be accumulated and from which they can be allocated to product lines. Using ABC costing approach, for instance, offers a means of escape because the system tries to allocate costs based on the level of usage or consumption of such common costs by each product line instead of using arbitrary allocation formulas.
Answer:
Break-even point (dollars)= $9,976.25
Explanation:
Giving the following information:
Fixed costs:
Rent $2,500
Utilities $500
Interest $750
An insurance premium of $200
Advertising on local bus $250 a month
Total= $4,200
A small bucket of take-out chicken, the only menu item, is priced at $9.50. Unit variable costs for the bucket of chicken are $5.50.
To calculate the break-even point in dollars, we need to use the following formula:
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 4,200/ [(9.5 - 5.5)/9.5]
Break-even point (dollars)= 4,200/0.421
Break-even point (dollars)= $9,976.25
He wants to put all mexians in space
Answer:
a higher price and produce a smaller output than a competitive firm
Explanation:
A monpolistically competitive firm is a firm that :
1. Sells differentiated products from other firms in the industry.
2. Has many buyers and sellers
3. Is a price maker
4. Has no barrier to entry or exist of firms
An example of a monpolistically competitive firm is a resturant.
A competitive firm is a firm that:
1. Sells identical goods with other firms in the industry.
2. Is a price taker . Prices are set by forces of demand and supply
3. Has many buyers and sellers
4. There are no barriers to entry or exist of firms.
When a monopolistic and competition firm are faced with the same unit cost, a monopolistic firm would aim to earn profit by increasing its price and reducing the quantity produced.
While a perfect competition would sell at the price set by the forces of demand and supply. The firm can increase the quantity produced in order to increase revenue.
A monopolistic firm is able to charge a higher price for its products while a perfect competition isn't.
