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Vlad [161]
4 years ago
10

Bluebird Mfg. has received a special one-time order for 15,000 bird feeders at $3.20 per unit. Bluebird currently produces and s

ells 75,000 units at $7.20 each. This level represents 80% of its capacity. These bird feeders would be marketed under the wholesaler’s name and would not affect Bluebird’s sales through its normal channels. Production costs for these units are $3.80 per unit, which includes $2.35 variable cost and $1.45 fixed cost. If Bluebird accepts this additional business, the effect on net income will be:
Business
1 answer:
kap26 [50]4 years ago
4 0

Answer:

Effect on income= $12,750 increase

Explanation:

Giving the following information:

Bluebird Mfg. has received a special one-time order for 15,000 bird feeders at $3.20 per unit. Production costs for these units are $3.80 per unit, which includes $2.35 variable cost and $1.45 fixed cost.

<u>Because it is a special offer and there is unused capacity, we will not take into account the fixed costs:</u>

Effect on income= 15,000*(3.2 - 2.35)= $12,750 increase

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Answer:

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5 0
3 years ago
Read 2 more answers
Westerville Company accumulates the following data concerning a mixed cost, using units produced as the activity level.
KatRina [158]

Answer & Explanation:

a. Using the high-low method, Variable cost per unit is;

= \frac{Highest Variable Cost - Lowest Variable Cost}{Highest number of units - Lowest number of Units} \\\\= \frac{17,492 - 14,860}{10,480 - 8,600} \\\\= $1.40

= $1.40

b. Fixed Cost

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3 0
3 years ago
In this exhibit (Monopoly Through Collusion), given the duopoly industry illustrated in the exhibit, if the two firms colluded t
tekilochka [14]

Answer:

c: P2; given by the area of the rectangle P1P2BG

Explanation:

Under monopoly, equilibrium is attained where firm's MC becomes equal to firm's MR. In the above diagram, this situation is satisfied 2 times i.e. at Q1 and Q2. This means market price may be P2 or P3 because MC = MR1 at equilibrium quantity Q1 and equilibrium price P3 while MC = MR2 at equilibrium quantity Q2 and price P2.

Economic profit of the firms is the total revenue minus total cost of the firm so it will be area above the MC curve i.e. either P1P2BG or P1P3AF.

But in the options there is presence of only P1P2BG. Therefore, (c) is the correct answer.

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Answer:

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8 0
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Alona [7]

Answer:

c

Explanation:

6 0
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