Answer:
Products Selling price Unit variable cost
$ $
Junior 50 15
Adult 75 25
Expert <u>110 </u> <u> 60</u>
Total <u> 235 </u> <u> 100</u>
The sales price per composite unit = $235
The contribution margin per composite unit
= Composite selling price - Composite unit variable cost
= $235 - $100
= $135
Break-even point in units
= <u>Fixed cost</u>
Contribution per unit
= <u>$114,750</u>
$135
= 850 units
Break-even point in dollars
= Break-even point in units x Composite selling price
= 850 units x $235
= $199,750
Income Statement
$
Total contribution ($135 x 850 units) 114,750
Less: Fixed cost <u>114,750</u>
Net profit <u> 0</u>
Explanation:
Sales price per composite unit is the aggregate of all the selling prices.
Contribution margin per composite unit equals composite selling price minus composite unit variable cost.
Break-even point in units is fixed cost divided per composite contribution margin per unit.
Break-even point in dollars equal break-even point in units multiplied by selling price.
Income statement is prepared by deducting the total fixed cost from the total contribution.
Based on accounting principles, a $1 per unit tax levied on consumers of a good is equivalent to "a $1 per unit tax levied on producers of the good."
This is based on the idea that the market reaches the exact equilibrium price irrespective of who is accountable for paying the money to the government.
In other words, when the government levies a tax on a good, producers are not exempted from the tax levy because that money will be recouped from the producers' sales or revenue.
Hence, in this case, it is concluded that tax on goods is inevitable to consumers and producers.
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Based on the question above, <u>demand and supply</u> will increase.
<h3>Demand</h3>
- demand is the quantity of a good that consumers are willing and able to buy at various prices during a given period of time.
<h3>Supply</h3>
- supply is the amount of a resource that firms, manufacturers, labourers, providers of financial assets, or other economic agents are willing and able to provide to the marketplace or to an individual.
Therefore, the correct answers are demand and supply.
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