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weqwewe [10]
3 years ago
8

The cost to manufacture one unit of Rinker Audio Products' bestselling hearing aid, the Magnifier, is $87.50. The CFO of the com

pany, Neha Patel, has determined that if the company expands the output of its biggest U.S. plant by 20 percent, the unit cost would be only $82.50. The concept that as plant output expands, unit costs decrease, is known as
a. minimum efficient scale.
b. lean production.
c. Six Sigma.
d. economies of scale.
e. total quality management.
Business
1 answer:
padilas [110]3 years ago
4 0

Answer:

d. economies of scale

Explanation:

Based on the information provided within the question it can be said that this concept is known as an economy of scale. Like mentioned in the question this concept states that as a company scales their operation, the cost of each input unit decreases as their output or production increases, Thus granting the company a cost advantage. As is happening in this scenario.

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Answer:

1. Margin = 0.32 or 32%

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3. Return on Investment = 0.17 or 17%

Explanation:

Firstly, list out the parameters we were given:

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1. Operating Margin = Net Operating Income / Sales

Operating Margin = 6,100,000 ÷ 19,000,000 = 0.32

Operating Margin = <u>0.32</u> (to 2 decimal places)

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<u />

2. Turnover refers to sales or revenue made during a particular period. In which case turnover is <u>$19,000,000</u>

However, if the turnover referred to is the Operating Asset Turnover, that is calculated below:

Operating Asset Turnover = Sales / Average Operating Assets

Operating Asset Turnover = 19,000,000 ÷ 36,500,000

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Operating Asset Turnover = <u>52%</u>

<u />

3. Return on Investment (ROI) = Net Operating Income / Average Operating Assets

Return on Investment (ROI) = 6,100,000 ÷ 36,500,000

Return on Investment (ROI) = <u>0.17</u> (to 2 decimal places)

Return on Investment (ROI) = <u>17%</u>

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