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Oduvanchick [21]
3 years ago
12

A firm has three different production facilities, all of which produce the same product.. While reviewing the firm's cost data,

Jasmin, a manager, discovers that one of the plants has a higher average cost than the other plants and suggests closing that plant. Another manager, Joshua, notes that the high-cost plant has high fixed costs but that the marginal cost for that plant is lower than in the other plants. He says that the high-cost plant should not be shut down but should expand its operations. Who is right?
Business
1 answer:
Valentin [98]3 years ago
6 0

<u>Joshua is right because fixed costs are unavoidable but marginal costs are not.</u>

<u>Explanation</u>:

Decision making plays an important role while considering the development of the organization. The officials in the company should act smartly in making decisions during crucial situation.

<u>Marginal cost </u>is the cost added to the total cost while producing additional units. <u>Fixed cost </u>is the cost of the product that does not change with the increase or decrease in the quantity of the products.

In the above scenario, Jasmine and Joshua were discussing about the cost of the products that are produced in their manufacturing plants. They were discussing about the marginal cost and fixed cost.

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Julio receives utility from consuming food​ (F) and clothing​ (C) as given by the utility function . In​ addition, the price of
AleksandrR [38]

​Julio's marginal rate of substitution equals is: 0.38, which is the price of food divided by the price of clothing.

<h3>Marginal rate of substitution</h3>

Using this formula

Marginal rate of substitution=Price of food/Price of clothing

Let plug in the formula

Marginal rate of substitution=$3 per unit/$8 per unit

Marginal rate of substitution=0.375

Marginal rate of substitution=0.38 (Approximately)

Therefore ​Julio's marginal rate of substitution equals is: 0.38, which is the price of food divided by the price of clothing.

Learn more about  marginal rate of substitution here:brainly.com/question/13401044

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6 0
1 year ago
Young Company budgets sales of $112,900,000, fixed costs of $25,000,000, and variable costs of $66,611,000. What is the contribu
quester [9]

Answer:

a. The contribution margin ratio will be 41%

b. The income from operations will be $12,420,000.

Explanation:

a. The sales are given at $112,900,000.

The fixed costs are $25,000,000.

The variable costs are $66,611,000.

The contribution margin will be

=Sales-variable costs

=$(112,900,000-66,611,000)

=$46,289,000

The contribution margin ratio will be

=(Contribution margin/sales)*100

=($46,289,000/ $112,900,000)*100

=41%

b. Now, if the contribution margin ratio is 40%.

The sales are given at $34,800,000.

The fixed costs are $1,500,000.

Income from operations or operating profit will be

=(sales*contribution margin ratio)-fixed cost

=$(34,800,000*0.4)-$1,500,000

=$12,420,000

7 0
3 years ago
Examine the equal opportunity laws of another country, not the United States. Are the laws in other countries as much a concern
ira [324]

Answer:

The equal opportunity laws of another country, not the United States is discussed below in details.

Explanation:

An equal opportunity system is a certificate that declares what measures a company takes to eliminate and stop discrimination in the workplace.

The United Kingdom employment equality law is an organization of law that legislates against prejudice-based activities in the workplace.

The prime legislation is the Equality Act 2010, which condemns discrimination in passage to education, government services, private services, and goods, or assumptions in addition to employment.

5 0
3 years ago
Fad City sells novel clothes that are subject to a great deal of price volatility. A recent item that cost $20 was marked up $12
Alenkinab [10]

Answer:

20+12-6+3 = 29

Explanation:

7 0
2 years ago
What effects did the Great Depression have on the credit industry?
koban [17]
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The effects Postwar Era had been good. Consumer borrowing increased. the G.I Bill was used by thousands of veterans to go to college or buy homes. Wages were mostly higher now and there were many jobs out there.
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