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olya-2409 [2.1K]
3 years ago
10

Hau Lee​ Furniture, Inc., spends 45​% of its sales dollars in the supply chain and finds its current profit of ​$35,000 inadequa

te. The bank is insisting on an improved profit picture prior to approval of a loan for some new equipment. Hau would like to improve the profit line to ​$40,000 so he can obtain the​ bank's approval for the loan. Current Situation Sales ​$140,000 Cost of material ​$63,000 ​(45​%) Production costs ​$35,000 ​(25​%) Fixed cost ​$7,000 ​(5​%) Profit ​$35,000 ​(25​%) ​a) What percentage improvement is needed in the supply chain strategy for profit to improve to ​$40,000​? What is the cost of material with a ​$40,000 ​profit? A decrease of nothing​% in material​ (supply-chain) costs is required to yield a profit of ​$40,000​, for a new material cost of ​$ nothing. ​(Enter your response for the percentage decrease to one decimal place and enter your response for the new material cost as a whole​ number.)
Business
1 answer:
murzikaleks [220]3 years ago
3 0

Answer:

a) 7.93%

b) 58,000 dolllars

Explanation:

a) We want to increase the profits by 5,000 thus we divide by our current supply chain cost to know how much do we need to decrease it:

5,000 / 63,000 = 0.0793 = 7.93%

b) material cost if estrategy is success:

original cost less 5,000 cost reduction

63,000 - 5,000 = 58,000

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Answer:

Option (A) is correct.

Explanation:

Given that,

Implicit costs per week = $200,000

Average explicit cost per banana = $0.25 per banana

Per week bananas sold = 1 million

Explicit cost = Average explicit cost per banana × No. of banana sold

                    = $0.25 × 1,000,000

                    = $250,000

Total revenue = No. of banana sold × Selling price of each banana

                        = 1,000,000 × $0.50

                        = $500,000

Accounting profit = Total revenue - Explicit cost

                             = $500,000 - $250,000

                             = $250,000

Economic profit:

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= $500,000 - $250,000 - $200,000

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The All star income statement has no line item for cost of good sold because cost of good sold is a direct cost incurred by All star Exposure on the goods sold. it does not appear as part of the expenses in the income statement.

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