Answer:
Explanation:
Feb. 1
prepaid rent 200
Cash 200
To record the advance rent payment
Feb. 4
Cash 800
Advance liability 800
To record received for future supplies
Feb. 7
Cash 900
Contract liability 900
Payment for the service to be provided
Feb. 10
Advance wages 1200
Cash 1200
Advance wages payment to pilot
Feb. 14
Adv to Advertise 100
Cash 100
Advance payment for advertisement expense.
Feb. 18
Cash 795
Account receiveable 1710
Revenue 2510
To record the accrued revenue
Feb. 25
inventory 1730
Account payable 1730
purchases on credit
Answer:
a. What is the MRP per driver per day?
- the marginal revenue product per driver = 60 packages x $20 = $1,200 per day
b. Now suppose that a union forces the company to place a supervisor in each vehicle at a cost of $300 per supervisor per day. The presence of the supervisor causes the number of packages delivered per vehicle per day to rise to 60 packages per day What is the MRP per supervisor per day? By how much per vehicle per day do firm profits fall after supervisors are introduced?
- if the drivers were already delivering 60 packages per day without the supervisor, then the addition of the supervisor doesn't change anything. So the MRP of the supervisor is $0. That means that the company's profits will decrease by $300 per day due to the supervisors.
c. How many packages per day would each vehicle have to deliver in order to maintain the firm's profit per vehicle after supervisors are introduced?
- $300 / 20 = 15 packages per day
- in order to maintain the profit per vehicle, each team of delivery man + supervisor should be able to deliver 75 packages per day.
d. Suppose that the number of packages delivered per day cannot be increased but that the price per deliver might potentially be raised. What price would the firm have to charge for each delivery in order to maintain the firm's profit per vehicle after supervisors are introduced?
- $300 / 60 = $5
- the price of each package delivered should increase by $5 to $25 per package.
