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Sholpan [36]
3 years ago
12

In order to sell a product at a profit, the product must be priced higher than the total cost to build the unit, plus period exp

enses and overhead.
At the end of last year, Digby had their product Daze aimed at the Americas Budget segment. Use the Globe's Product Analysis to find Daze's production cost (labor + materials) in the Americas region. Exclude possible inventory carrying costs. Assume period expenses and overhead total 50% of their production cost.

Name Daze Units Sold 987 Price $23 Customer Satisfaction 21 Accy 7.2 Speed 7.2 Service Life 14,000 Age 3.3 Region Kit Yes Material Costs $6.79 Labor Costs $4.56 Contrib. Margin 49.27%

What is the minimum price the product could have been sold for in the American region to cover the unit cost, period expenses, and overhead?

a. $17.02
b. $11.35
c. $23.00
d. $5.67
Business
1 answer:
Aloiza [94]3 years ago
6 0

Answer:

$17.02

Explanation:

The computation of the minimum price of the selling price is shown below:

= Material Costs per unit + Labor Costs per unit × (percentage + percentage given)

= $6.79 + $4.56 × (100% + 50%)

= $11.35 × 150%

= $17.02

We simply added the material cost per unit, labor cost per unit and the overhead cost allocation rate.

All other information which is given is not relevant. Hence, ignored it

You might be interested in
Explain how some of the behavioral biases discussed in the chapter might contribute to the successof technical trading rules.
kirill115 [55]

Answer:

A number of the behavioral biases discussed in the chapter might contribute to such trends and patterns. For example, a conservatism bias might contribute to a trend in prices as investors gradually take new information in to account, resulting in gradual adjustment of prices towards their fundamental values.

Explanation:

Step by step explanation:

1. Technical analysis can generally be viewed as a search for trends or patterns in market prices. Technical analysts tend to view these trends as momentum, or

gradual adjustments to ‘correct’ prices, or, alternatively, reversals of trends. A number of the behavioral biases discussed in the chapter might contribute to such trends and patterns. For example, a conservatism bias might contribute to a trend in prices as investors gradually take new information into account, resulting in gradual adjustment of prices towards their fundamental values. Another example derives from the concept of representativeness, which leads investors to inappropriately conclude, on the basis of a small sample of data, that a pattern has

been established that will continue well into the future. When investors

subsequently become aware of the fact that prices have overreacted, corrections reverse the initial erroneous trend.

2. Even if many investors exhibit behavioral biases, security prices might still be set efficiently if the actions of arbitrageurs move prices to their intrinsic values. Arbitrageurs who observe mispricing in the securities markets would buy

underpriced securities (or possibly sell short overpriced securities) in order to profit from the anticipated subsequent changes as prices move to their intrinsic values.

Consequently, securities prices would still exhibit the characteristics of an efficient market.

3. One of the major factors limiting the ability of rational investors to take advantage of any ‘pricing errors’ that result from the actions of behavioral investors is the fact

that a mispricing can get worse over time. An example of this fundamental risk is the apparent ongoing overpricing of the NASDAQ index in the late 1990s. A

related factor is the inherent costs and limits related to short selling, which restrict the extent to which arbitrage can force overpriced securities (or indexes) to move

towards their fair values. Rational investors must also be aware of the risk that an apparent mispricing is, in fact, a consequence of model risk; that is, the perceived

mispricing may not be real because the investor has used a faulty model to value the security

4. There are two reasons why behavioral biases might not affect equilibrium asset

prices: first, behavioral biases might contribute to the success of technical trading

rules as prices gradually adjust towards their intrinsic values, and second, the

actions of arbitrageurs might move security prices towards their intrinsic values. It

might be important for investors to be aware of these biases because either of these

scenarios might create the potential for excess profits even if behavioral biases do

not affect equilibrium prices.

In addition, an investor should be aware of his personal behavioral biases, even if

those biases do not affect equilibrium prices, to help avoid some of these

information processing errors (e.g. overconfidence or representativeness).

5. Efficient market advocates believe that publicly available information (and, for

advocates of strong-form efficiency, even insider information) is, at any point in

time, reflected in securities prices, and that price adjustments to new information

occur very quickly. Consequently, prices are at fair levels so that active

management is very unlikely to improve performance above that of a broadly

diversified index portfolio. In contrast, advocates of behavioral finance identify a

number of investor errors in information processing and decision making that could

result in mispricing of securities. However, the behavioral finance literature

generally does not provide guidance as to how these investor errors can be exploited

to generate excess profits. Therefore, in the absence of any profitable alternatives,

even if securities markets are not efficient, the optimal strategy might still be a

passive indexing strategy.

6. a. Davis uses loss aversion as the basis for her decision making. She holds on to

stocks that are down from the purchase price in the hopes that they will recover.

She is reluctant to accept a loss.

7. a. Shrum refuses to follow a stock after she sells it because she does not want to

experience the regret of seeing it rise. The behavioral characteristic used for the

basis for her decision making is the fear of regret.

8. a. Investors attempt to avoid regret by holding on to losers hoping the stocks will

rebound. If the stock rebounds to its original purchase price, the stock can be sold

with no regret. Investors also may try to avoid regret by distancing themselves from their decisions by hiring a full-service broker.

7 0
2 years ago
On May 3, 2020, Pina Company consigned 90 freezers, costing $470 each, to Remmers Company. The cost of shipping the freezers amo
Yuki888 [10]

Answer:

a. Inventory value of units unsold in the hands of the consignee.

$ 480 * 45= $ 21600

b. The profit for the consignor for the units sold = $12,150

c. The amount of cash that will be remitted by the consignee  $10,960.4

Explanation:

a. Inventory value of units unsold in the hands of the consignee.

$ 480 * 45= $ 21600

b. The profit for the consignor for the units sold = $12,150

c. The amount of cash that will be remitted by the consignee  $10,960.4

Remittance from consignee $________

Freezers 90 *$ 470= $ 42300

Freight                     $ 870

Total Cost               $ 43,170  for 90 freezer

Cost of One freezer = $ 43170/ 90= 479.6 = $ 480

Sales            45* $750=  $ 33750

<u>Cost of 45 freezers=  $ 21600</u>

Gross Profit               12150

Installation Charges   $ 310

Advertising                $ 180

Profit                           $11660

<u>Commission                699.6</u>

Net Profit             $  10,960.4

Working : 6 % of $11660= $ 699.6

3 0
3 years ago
Complete the sentence. Entrepreneurs are visionaries who __________. A. anticipates future consumer demands B. wear vision-corre
lana66690 [7]
<span>Entrepreneurs are visionaries who can anticipate future consumer demands. An example of an entrepreneur is Marcus Lemonis who has a show on TV called 'The Profit.'</span>
8 0
3 years ago
Marketing consists primarily of advertising a product or service. <br><br> a. True <br><br> b. False
DedPeter [7]
I think the answer would be false. Marketing does not primarily consists of only advertising a product or service. It involves with the buying and selling of a product or a service. It would include advertising, selling of the products and the delivery of these products to the consumers. It should be able to coordinate the 4P's in marketing namely the product, the price, the place and the promotional strategy. So, it is not mainly advertising a product or a service. 
7 0
3 years ago
Cora will be a bridesmaid next summer, and has purchased her dress online. The next time she turned on her computer, Cora was su
Serjik [45]

Answer: direct marketing

   

Explanation: In simple words, it refers to the method of marketing in which the organisation directly communicates to the customer,which is selected on some predetermined criteria, and offers him or her to respond to the  organisation directly as well.

Physical mail, E-mail, telemarketing or calling are some of many sources which are used by an organisation for directly marketing their product.

     In the given case, Cora was offered special offers in the market based upon her previous purchase online. Hence we can conclude that the correct answer is direct marketing.

8 0
3 years ago
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