Answer:
The largest revenue the supplier can make under this deal is $24,151.2
Explanation:
Working file has been attached to help understand how the answer was derived. Some points to note in the sheet are:
- The sheet represents the following columns which are S. No., Chairs, Price, Total Revenue and difference in each revenue.
- As the no. of chairs rises the price is dropping by $0.2 in the entire order.
- However, at first this increase in order of chairs is beneficial even with the drop in the price of entire order.
- At the point, where chairs ordered are 348 and price is $69.4 the revenue is at its largest which is $24,151.2.
- After this point the increase in the no. of chairs is only decreasing the overall total revenue of the supplier.
Answer:
The change in the dollar amount of inventory is $200 due to change in the inventory costing method.
Explanation:
The variable cost per unit is $6.00 while the fixed cost per unit is $2.00
Variable cost per unit = $6.00
Absorption cost pet units = $8.00
Total cost under absorption costing = Absorption cost per unit / number of units in ending inventory
Total absorption cost = $8.00 × 100 = $800
Total cost under variable cost = Variable cost per unit × number of units in ending inventory
Total variable cost = $6.00 × 100 = $600
Change in cost = Total absorption cost - Total variable cost
Change in cost = $800 - $600 = $200
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