The Burkes pay their babysitter $5 per hour before 11 P.M. and $7.50 after 11 P.M. One evening they went out for 4 hr and paid
1 answer:
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Answer:
The contribution margin will decrease by 2.50
Explanation:
IF sales decreases, then the contribution margin decreases.
That's because, there is less money to pay for the variable cost.
The company will also have to sale more units to break even, as now each units contribution is fewer.
Cone's should evaluate how much their sales are expected to increase for the lower price and be cautious
Answer: The $4.05 market price
Explanation: Air-tite can buy or sell Hydrol at $4.05. If they decide to accept the order, there has to be a higher return on the use of Hydrol in the return than they would get from selling Hydrol as is.
There may also be an opportunity cost to using the product for this special order if there is an order that would yield higher returns for the use of Hydrol.
The quantity that would remain after making the special order does not have any impact on the decision making process, as they are considering just one order that requires Hydrol.
The purchase price is not relevant as they cannot purchase Hydrol at that price in the present. The total quantity is not relevant either as they have enough for the order.
