Select the correct answer. Ashley is a finance executive. She has gathered all the data from different departments regarding the
1 answer:
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Answer:
Price elasticity of demand, = 1.63
Explanation:
We know,
Price elasticity of demand, =
We will be using mid-point method to calculate the price elasticity.
Here,
Percentage change in Quantity demanded = × 100
or, Percentage change in Quantity demanded = × 100
Therefore, % change in Quantity demanded = × 100 = 88.89%
Again,
Percentage change in price = × 100
or, Percentage change in price = × 100
Therefore, Percentage change in price = × 100 = - 54.55%
Therefore, Price elasticity of demand, = 88.89% ÷ (- 54.55%) = 1.63
We know, price elasticity is always positive. Therefore, we have to give an absolute value for price elasticity.
Answer:
$810,000
Explanation:
incremental revenues = 20,000 x $13 = $260,000
incremental direct materials costs = 20,000 x $2 = ($40,000)
incremental direct labor costs = 20,000 x $4 = ($80,000)
additional overhead costs = $200,000 x 15% = ($30,000)
additional administrative expenses = ($86,000)
incremental net income = $24,000
combined net income = incremental net income + regular net income = $24,000 + $786,000 = $810,000
