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3 years ago

Assume that marginal revenue equals rising marginal cost at 100 units of output.

Business

1 answer:

Digiron [165]3 years ago

5 0

Answer:

b) -$700.

Explanation:

The economic profit or loss will be:

economic result = revenue - total cost

Where:

fixed cost + variable cost = total cost

400 + 600 = 1,000

revenue = units x selling price per unit

100 units x $3 = $300

economic result = revenue - total cost = 300 - 1,000 = -700

The company is on the optimal level, marginal revenue = marginal cost at 100 units of output.

But, it is not selling at the correct price. It should sale at a higher price.

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Bain Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine, an inexpe

pochemuha

Solution and Explanation:

Part a:

Revenue 5000 multiply 6.6 33000

Unit Level Variable Cost:

Material Cost 5000 multiply 2.7 -13500

Labor Cost 5000 multiply 1.2 -6000

Manufacturing Cost 5000 multiply 1.2 -6000

Shipping and Handling 5000 multiply 0.3 -1500

Sales Commission 0

Contribution Margin 6000

Should be accepted as it will increase profitability by $6000

Part b1&b2: Cost to Make Cost to Buy

Material Cost 40000*2.7 108000

Labor Cost 40000*1.2 48000

Manufacturing Cost 40000*1.2 48000

Prod Supervisor Salary 72000

Purchase Cost 40000*6.72 0 268800

Total Cost 276000 268800

Should purchase from outside as cost is lower than making it

Part b3:

Cost to Make Cost to Buy

Material Cost 60000 multiply 2.7 162000

Labor Cost 60000 multiply1.2 72000

Manufacturing Cost 60000*1.2 72000

Prod Supervisor Salary 72000 72000

Purchase Cost 60000*6.72 0 403200

Total Cost 378000 475200

Should make in house as cost is lower

Part c: It should not be eliminated.

Elimination will decrease profitability by $72000 which is being allocated company wide facility exp. Before Allocation, actual profit is (168000-24000-72000)=$72000

Loss is because of allocation of facility expenese, which will be allocated on other segment.

5 0

3 years ago

Last year Canada’s economy had a surge in exports and increased demand for additional economic outputs. Because of the great dem

Artyom0805 [142]

Answer:

Neoclassic economists believe that both wages and prices are sticky (hard to change) only int he short run. In the long run, both prices and wages will adjust to new economic conditions.

In this particular case, neoclassic economists will predict that even though wages are starting to rise, in the long run the equilibrium wage will be higher.

Long run and short run are economic concepts that do not refer to a given time period, e.g. long term in accounting means more than 1 year, but long run in economics may take years to come.

Long run refers to the amount of time it takes for an economic variable to adjust to economic changes.

If Canada's increase in labor costs is paired with an increase in productivity (usually new technologies), then the economy should be able to grow since private consumption and investment will increase due to higher wages.

Explanation:

6 0

3 years ago

If during 2011 the Republic of Sildavia recorded a value added of $78 billion, wages of $40 billion, profits of $8 billion, and

Otrada [13]

Answer:

$12 billion.

Explanation:

Given: Value added during 2011= $78 billion.

Total sales= $90 billion.

Intermediate goods are the goods used to produce final product and it is not included in the calculation of GDP, however, it is included in the value of final goods.

Now, finding the value of intermediate goods purchased.

Intermediate goods= $Total\ sales - Total\ value\ added$