Answer:
The correct answer is: less than $22.
Explanation:
Price discrimination is a situation where a firm charges different prices for the same product. Different price is charged generally from consumers with different price elasticities.
A firm charges a higher prices from the consumer with lower price elasticity because with a higher price there demand will decrease less than proportionate.
Lower price is charged from consumers having a higher price elasticity of demand because these consumers will decrease their demand more than proportionate at a higher price.
So if a firm charges $22 in the market segment with less elastic demand, the price in the more elastic market segment will be lower than $22.
Answer:
Company A
a. Differential Analysis dated May 29
Alternative 1 Alternative 2
Opportunity cost $250,000 $550,000
Variable production costs 580,000 192,000
Total cost $830,000 $742,000
b. Sunk cost in this situation is: $225,000 ($400,000 - $175,000) cost of the old machine.
Explanation:
Company A's relevant cost for the old machine is the opportunity cost that it will lose if it continues with Alternative 1 or continued use of the old machine and the additional cost for the new machine for Alternative 2. Also relevant is the variable production costs that would be incurred if the old or new machine is used.
Company A's sunk cost is the cost of the old machine minus accumulated depreciation. Sunk cost is not relevant for decision making under differential analysis.
Company A's differential analysis is a managerial tool that is used to differentiate one decision alternative from another. In this analysis, only relevant costs are considered. A relevant cost in this case is cost that its inclusion or elimination makes a difference in the decision outcome.
Answer:
$1,050,000
Explanation:
Budgeted purchases= coats in inventory + budgeted sales- Beginning inventory expected coats
Budgeted purchases = 6,000 + 12,000 - 4,000 = 14,000 suits
14,000 suits x $75/suit = $1,050,000
Therefore the dollar amount of the purchase of suits if each coat has a cost of $75 is $1,050,000
Answer: <u>Memos omit a closing signature.</u>
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<u>(I took the test and this was the answer)</u>
