Answer:
B. a small percentage decrease in price produces a larger percentage increase in quantity demanded and total revenue increases.
Explanation:
Elasticity of demand measures the responsiveness of quantity demanded to changes in price.
Elasticity of demand = percentage change in quantity demanded / percentage change in price
Demand is elastic if a small percentage decrease in price produces a larger percentage increase in quantity demanded . Total revenue would increase because the percentage increase in Quanitity demanded exceeds the percentage decrease in price.
If demand is elastic, a small percentage increase in price produces a larger percentage decrease in quantity demanded and total revenue increases.
Here, total revenue falls because percentage decrease in price exceeds the percentage increase in price.
Demand is inelastic if a small percentage decrease in price produces a smaller percentage increasein quantity demanded.
Demand is perfectly inelastic if the quantity demanded remains the same regardless of level of price.
I hope my answer helps you
Answer: The Break-Even Point will reduce from $4,285.71 to $4,125
Explanation:
To get the Break-Even Point we can divide Fixed Assets by the Contribution margin.
The Contribution Margin is the Selling Price minus the Variable Cost.
For Scenario 1 the Break-Even Point will be,
= 15,000 / ( 6 - 2.50)
= $4,285.71
For Scenario 2 the Break-Even Point is,
= 16,500 / 6.5 -2.5
= $4,125
The Break-Even Point for Scenario 2 means that even though the higher Fixed Costs could have led to a higher Break-Even Point, the higher price contributed more than the fixed costs did and led to an ultimately lower Break-Even Point than the first Scenario.
Answer:
Line organization model
Explanation:
Based on the information provided within the question it seems that Party Pros Inc. is using a Line organization model. This is an organizational structure in which power flows from the top to the bottom, meaning that the person at the top is the owner and the individuals in each level of the hierarchy answer to those in the upper levels, all of which are trying to accomplish the same organizational goals. Such as is being described in this situation.
Answer:
under applied by $1,000.
Explanation:
The formula is shown below:
Predetermined overhead rate = (Total estimated manufacturing overhead) ÷ (estimated direct labor-hours)
= $101,998 ÷ 67,992 hours
= $1.50
Now we have to find the applied overhead which equal to
= Actual direct labor-hours × predetermined overhead rate
= 70,000 hours × $1.50
= $105,000
So, the ending overhead equals to
= Actual manufacturing overhead - actual overhead
= $106,000 - $105,000
= $1,000 under-applied
