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Anettt [7]
3 years ago
15

ony Manufacturing produces a single product that sells for $ 80. Variable costs per unit equal $ 45. The company expects total f

ixed costs to be $ 83 comma 000 for the next month at the projected sales level of 2 comma 600 units. In an attempt to improve​ performance, management is considering a number of alternative actions. Each situation is to be evaluated separately. Suppose that management believes that a 10​% reduction in the selling price will result in a 10​% increase in sales. If this proposed reduction in selling price is implemented​ ________.
Business
1 answer:
bogdanovich [222]3 years ago
8 0

Answer:

It is not convenient to reduce the selling price by 10%.

Explanation:

Giving the following information:

Selling price= $ 80.

Variable costs per unit= $ 45.

The total fixed costs= $83,000

Units= 2,600

Suppose that management believes that a 10​% reduction in the selling price will result in a 10​% increase in sales.

New price= 80*0.90= $72

Units= 2,600*1.10= 2,860

We need to determine the effect on income.

First, we calculate the present income:

Income= 2,600*(80-45) - 83,000= $8,000

Now, we can calculate the effect on income:

Effect on income= 2,860*(72 - 45) - 83,000= -$5,780

It is not convenient to reduce the selling price by 10%.

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D. 184 parts

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2 years ago
Ed has a summer beach cottage that he has owned for many years. the cottage is valued at $ 75 comma 000. this​ year, ed spends ​
mezya [45]

is this all of the equation?

3 0
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Lake stevens marina has estimated that fixed costs per month are $350,000 and variable cost per dollar of sales is $0.30.
Leni [432]

$500,000

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4 0
2 years ago
According to the specifications that a customer gave to a manufacturer, the length of a shoe should not deviate from the correct
vichka [17]

Answer:

Capability ratio = 1.04166

Explanation:

Given:

Length of a shoe (not deviate) = 1 mm

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Capability ratio = ?

Computation:

Capability ratio = [Length of a shoe (not deviate) / Standard deviation of this length] / Number of standard deviations

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4 0
3 years ago
Trevor Company expects sales of Product W to be 60,000 units in April, 75,000 units in May, and 70,000 units in June. The compan
Sedbober [7]

Answer:

65000 units

Explanation:

Given:

Expected sales of product W in April  = 60000 units

Expected sales of product W in May  = 75000 units

Expected sales of product W in June  = 70000 units

Inventory in hand at the end of each month = 40% of the next month's expected sale

Inventory expected at the end of the April = 40% of the expected sales in May

or

Inventory expected at the end of the April = 0.4 × 75000 = 30000 units

Therefore, the total units required in April =  Expected sales of product W in April + Inventory expected at the end of the April

or

the total units required in April = 60000 + 30000 = 90000 units

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Excessive production in March (inventory) = 25000 units

Hence, the units required to be produced in April = the total units required in April - Excessive production in March (inventory)

or

the units required to be produced in April = 90000 - 25000 = 65000 units

7 0
3 years ago
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