Which of the following scenarios is an example of monopolistic competition?
2 answers:
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Answer and explanation:
<em>check the attached file for a well formatted answer</em>
The purchase budget for the month of Mar 2012 is asked. Also there are no changes in beginning and closing inventories. The data given is summarised as below,
Brand 1 Brand 2
Bottle size 2 lit 2 lit
Number of bottles 106000 81000
Concentrate cost $85 per pound
Concentrate used 0.15 lb per 100 lit 0.2 lb per 100 lit
Carbonated water used 2 lit 2 lit
Bottle cost $0.1 per bottle
Carbonated water cost $0.08 per litre
Based on this the budget is filled as below,
CONCENTRATE 2-LITRE BOTTLES CARBONATED WATER
Brand 1 (A)
318 lbs
[=106000*2/100*0.15 lbs]
106000 bottles
212000 litres
[106000 bottles * 2 litres]
Brand 2 (B)
324 lbs
[=81000*2/100*0.2 lbs]
81000 bottles
162000
[81000 bottles * 2 litres]
Total Materials (C=A+B) 642 lbs 187000 bottles 374000 litres
Direct materials unit price (D) $ 85 $ 0.1 $ 0.08
Total direct materials to be purchased (E=C*D) $54570 $18700 $29920
