Answer
Financial advantage from further processing $31
Explanation:
<em>A company should process further a product if the additional revenue from the split-off point is greater than than the further processing cost. </em>
<em>Also note that all cost incurred up to the split-off point (the cost of crushing) are irrelevant to the decision to process further . </em>
<em> $</em>
Sales revenue after the split off point( 64+64) 128
Sales revenue at the split-off point (16+47) <u> 63</u>
Additional sales revenue 65
Further processing cost ( 15+19) <u>(34
)</u>
<em>Net income after further processing 31</em>
Financial advantage from further processing $31
Answer: Demand based pricing
Explanation:
Ray-Ban's plan of gathering information about the other brands sold in department stores, which includes their prices, would most likely be used in a demand based basis for pricing
Demand-based pricing, refers to the method of pricing whereby the fluctuations in the demand of consumers is considered.
Due to the flctuations, the prices are adjusted in a way that fits the changes in the values of the product.
Answer:
The increase in pre-tax income 20,000
Explanation:
The fixed cost of production would remain the same whether or not the special order is taken, hence, irrelevant for the decision at hand.
The sale price for the special order=10
the variable cost per unit=6
contribution margin per unit from special order=10-6=4
The increase in pre-tax income=total contribution margin from special order
The increase in pre-tax income=5000*4
The increase in pre-tax income=20,000
Hence, accepting the order is worthwhile.
