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11111nata11111 [884]
3 years ago
15

A manufacturer of a very labor-intensive product wishes to employ the 'experience curve' to predict the AVC associated with vari

ous levels of cumulative production volume. Based on the first lot of 1,000 units, AVC are $12.50 per unit. You may assume that this level of AVC is attained at the point where the first 1,000 units are produced. The producer expects an experience constant or rate of about .9. The producer can expect AVC of ____________ with the third doubling (within $.10).
Business
1 answer:
Rasek [7]3 years ago
5 0

Answer:

with the third doubling, the AVC = $9.11 per unit

Explanation:

The average variable cost (AVC) decreases by 10% with each doubling of cumulative output:

<u>Production level in units</u>                         <u>AVC per unit</u>

    1,000                                                   $12.50 per unit

    2,000                                                  $11.25 per unit

    3,000                                                  $10.13 per unit

    4,000                                                  $9.11 per unit

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Answer:

B. $ 3 comma 600 comma 000$3,600,000

Explanation:

The total manufacturing cost of an entity maybe divided into two broad classes. These are direct and indirect cost. The indirect cost are also known as the overheads and may be further divided into fixed and variable overheads. The variable overheads may be given as a function of direct cost such as machine hours, direct labor hours etc.

Given that

Total units to be produced = 120,000

Time required to produce a unit = 10 hours

Hence total number of hours required

= 120,000 × 10

= 1,200,000 hours

Hourly wage rate = $12

If Factory overheads is applied to direct labor hours at $3 per​ hour

Factory overheads = $3 × 1,200,000

= $3,600,000

7 0
3 years ago
Which of the following illustrates a tradeoff​? A. Randy enjoys ski vacations. B. I will study for my exam instead of going to t
aliya0001 [1]

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A property is being appraised using the income capitalization approach. Annually, it has potential gross income of $40,000, vaca
luda_lava [24]

Answer:

<em>Value $  256,250</em>

<em>rounding against nearest 1,000 dollar: 256,000</em>

<em />

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20,500 net

<em />

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6 0
2 years ago
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What global market-entry strategy did mary kay use when it entered india?
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The global market entry strategy that Mary Kay used when it entered India was the exporting market entry strategy. The priorities of Mary Kay when doing business was God first, family second and career third. In India however it was adapted that faith first, family second and career third.  Mary Kay does this for the purpose of the religion and for the sake of respecting those who practice their religions.


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3 years ago
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Parker Corp. owns 80% of Smith Inc.'s common stock. During Year 1, Parker sold Smith $250,000 of inventory on the same terms as
IrinaVladis [17]

Answer:

c. $500,000

Explanation:

Given that :

Parker Corp. owns 80% of Smith Inc.'s common stock

During Year 1, Parker sold Smith $250,000 of inventory

Therefore; adjusted for inter Corp. sales = $250,000

The following information pertains to Smith and Parker's sales for Year 1:

                         Parker                     Smith

Sales                 $ 1,000,000            $ 700,000

Cost of Sales    $400,000                $ 350,000

Total                   $ 600,000              $ 350,000

For the Unadjusted Cost of Sales of Parker and Smith = $400,000+$ 350,000

= $750,000

The amount that Parker should report as cost of sales in its Year 1 consolidated income statement = Unadjusted Cost of Sales - adjusted for inter Corp. sales

= $750,000 -  $250,000

= $500,000

7 0
3 years ago
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