In this situation, the Average fixed cost wll be INCREASED.
AFC (average fixed cost) is calculated by adding up all total fixed cost within a certain period and divide it with the total years. If a business experienced an increased in any way to its fixed cost, the average will automatically increased.
For the case of a consumer with an inelastic demand curve, it is less costly to cater for them, hence reducing the production fixed cost. given that different customers will be charged differently for the same product, it is easy to cover for a low profit range.
Contingency theories propose that the effectiveness of a particular style of <u>leader</u> behavior depends on the situation.
<h3>What do you understand by contingency theory of leadership?</h3>
According to the contingency theory of leadership, a leader's efficacy is determined by whether or not their leadership style is appropriate for the situation. These theory shows that there is no fundamental way to meet with the requirements of business and implement decision making.
To represent better effectiveness at workplace, A leader should be flexible to meet with different situations. The decision making will be varied from situation to situation.
The contingency theory of leadership focus on skills like, adaptability, ability to face challenges, effective communication, innovative approach as well as critical thinking and decision making. The leaders should develop unique leadership style to deal with challenging situation.
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Answer:
Just-in-time inventory method
Explanation:
Just-in-time inventory method accurately forecasts demand for a good or service, so that it requests only for inventory it uses in production process. This method is aimed at reducing inventory storage cost and other expenses associated with having excess inventory on hand.
This method results in smooth operation at reduced cost. To be successful the business must accurately predict demand, and react fast to meet supply obligations.
Answer: 4,975 units
Explanation:
Budgeted production in July = Sales forecast for July + Ending inventory for July - Beginning inventory
Beginning inventory = 25% of July sales
= 25% * 4,800
= 1,200 units
Ending inventory = 25% of August sales
= 25% * 5,500
= 1,375 units
Budgeted production is therefore:
= 4,800 + 1,375 - 1,200
= 4,975 units
