1)The cm ratio<span> is the difference between a company's sales and variable expenses (expenses proportional to units produced), expressed as a <span>percentage. Hence, we have that the costs of the product per unit are 70%= 100%-30% of the unit income, thus they are 40*70%=28$. Thus, the variable expenses per unit are 28$.
2) In order to break even, they have to make profit of 180000$ from sales. Each unit gives a profit of 12$=40$-28$ (unit profit). Hence, in order to make a profit of 180000$, the have to sell 180000/12=15000 units. Those units will bring in sales of 40*15000=600000$. We also have that if the company wants to make a net profit of 60000$, the profit from the unit sales needs to be 240000$ in total. Hence, they will need 240000/12=20000 units and the sales will be 40*20000=800000$ at that point.
3) Let us calculate the new cost. It is obviously 28-4=24$. The new profit margin per unit is 40-24=16$. Hence, to break even this time they will need only 180000/16=11250 units. They will be sold for 40*11250=450000$ in total. To make that additional profit of 60000$, they will need to sell 60000/16 more units, hence 3750 more units. This means that they need to do an additional 150000 dollars in sales. With the new variable cost, to achieve profit of 60000 they need to sell 11250+3750=15000 units and they will cost 600000$
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The factors that can impact the elasticity of demand are:
necessity versus luxury
availability of substitutes
<h3>What is the elasticity of demand?</h3>
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
The more close substitutes a good has, the more elastic its demand. This is because if price is increased, consumers can easily shift to the consumption of an alternative product.
Goods that are deemed as necessities usually have an inelastic demand. While goods that are deemed a luxury usually have elastic demand.
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Answer:
Please consider the following calculations
Explanation:
Expected cash collection during august =
(70000*68%+75000*20%+69000*10%) = 69.500
Expected cash disbursement during august = (53000*98%++14400) = 66.340
Expected cash balance on august 31 = (32000+69500-66340) = 35.160
Answer:
Buying in bulk stops being a wise spending choice when the consumer buys more than is needed
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Answer:
See the explanation for the answers.
Explanation:
1. "Regulate it" is superior because anti trust makes it open to competition and the firm no longer remains a monopoly.
2. A regulated monopoly lower the price it charges from consumers which benefits the consumers because their consumer surplus increases. A regulated monopoly also offers better quality products.
3. Yes, there are redeeming qualities of monopolies.
Advantages of monopoly-
(a) The profits that the monopolist earns can be invested in R and D.
(b) Monopolies can practice price discrimination which can benefit weaker sections of the society.
(c) Monopolies can invest in latest technology which increases productivity and total output of a country.
(d) The government generates revenue from taxing the monopoly firm.
