Answer:
D) 5182 glass vases
Explanation:
<em>Contribution per glass vases:</em>
$4.5 selling price - $ 1.75 variable cost= 2.75
<em>Operating income:</em>
29,000 units x $ 2.75 - $ 8,500 = $71,250 operating income
<em>Target income is to obtain a 20% increase:</em>
71,250 x (1 + 20%) = 85,500 target income:
<em>units needed for target income:</em>
(85,500 target income + 8,500 fixed cost) / 2.75 contribution per unit= 34.181,81
aditional glass vases needed for target income:
34,182 - 29,000 = 5,182
Answer:
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Answer: Please refer to Explanation.
Explanation:
Two Companies. We shall call them A and B.
If A and B decide not to advertise, they both get $5,000,000.
If A advertises and B does not then A captures $3 million from B at a cost of $2 million meaning their payoff would be,
= 5 million - 2 million + 3 million
= $6 million.
A will have $6 million and B will have $2 million as $3 million was captured from them. This scenario holds true if B is the one that advertises and A does not.
If both of them Advertise, they both reduce their gains by $2 million while capturing $3 million from each other so they'll essentially both have just $3 million if they both decide to advertise.
With the above scenarios, it is better for both companies to ADVERTISE if there is NO COLLUSION. This is because it ensures that they do not get the lowest payoff of $2 million if the other company decides to advertise and they do not.
However, if they DO COLLUDE. They must both decide that NONE of them SHOULD ADVERTISE and this would leave them with their original $5 million each which is a higher payoff than the $3 million they will both receive if they were both advertising.
Either A or C would be right, because it couldn't be a decrease of the equity.
