Answer:
Increase by $37,100.
It will accept any time the price is above $43 with the condition it will not incur in additional fixed cost.
$63. is the sales price that generates 106,000 dollar of operating income
Explanation:
As the units will not inccur in any additional fixed cost we should check for the contribution margin this units will provide:
50 dollars - 43 dollar of variable cost = 7 dollars
5,300 saws x $7 = 37,100
The sales reveues will increase by that amount.
(5,300 x $43 dollars each in cost + 106,000 contribution )/5,300 = sales price
sales price = 63
Answer:
80000 unit of Alpha
Explanation:
This is a Limiting factor/resource constraint question. In certain situations entities suffer from shortage of necessary resources (e.g: shortage of material, labor hours, machine hours), in such circumstances entities strive to allocate the constraint resources to the production of those products which generate the highest contribution per limiting factor and help maximize total contribution. In this case the limiting factor for Cane is Raw material.
Lets suppose that each unit of <em>Alpha and Beta sell for $120 and $80</em> respectively and variable cost per unit of <em>Alpha and Beta is $69 and $20 </em>respectively. Each unit of <em>Alpha and Beta require 2 and 5 pounds</em> of raw material for production respectively.
Now that we have supposed the data we have to compute contribution per unit and then contribution per limiting factor and based on the ranking (i.e highest first) of contribution per limiting factor we decide which product should be given priority for resource allocation.
<em>Lets calculate contribution per unit.</em>
Alpha:
Contribution per unit= SP-VC
Where, SP stands for selling price and VC stands for variable cost.
CPU= 120-69
CPU=$51
Beta:
Contribution per unit= 80-40
CPU=$40
<em />
<em />
<em>Now, lets calculate contribution per limiting factor.</em>
Alpha:
CLF: $51÷2
CLF: $25.5 1st Rank
Beta:
CLF: $40÷5
CLF: $8 2nd Rank
So clearly Alpha has a greater contribution per limiting factor and it implies that Alpha will earn the highest contribution margin therefore Cane should produce and allocate resources to Alpha first and then Beta if there remains any?
Profit maximizing output:
It requires 2 pounds of raw material to produce one unit of Alpha (i.e 80000×2=160000) Therefore Cane should produce 80000 units of Alpha only in order to maximize its profits.
Answer:
Starting at equilibrium point D, if the cost of inputs rises, the short-run equilibrium will move to the point B, and thus real output will Decrease and the price level will Increase.
Explanation:
This means it will go down but the price is gunna increase.
-<em>Hope This Helps!</em>
<em>-Justin:)</em>
Answer:
The value of this employee benefit today is closest to $17,758.66
Explanation:
Crane Flight services per week contribution C = $25
Discount rate per r=4.75%
Discount rate per week r= 4.75% / 52 =0.0913%
Total Payment N = $52 * 22 years = $1,144
Current value of employee benefit P = C*(1+r)*(1-(1+r)^-N)/r
P=25*(1+0.0913%)*(1-(1+0.0913%)^-1144)/0.0913%
P = 25 * (1.000913) * (1 - (1.000913)^-1144)/0.000913
P = 25 * (1.000913) * 1 - 0.3520453/0.000913
P = 25 * (1.000913) * 709.6985
P = 17758.661368
P = $17,758.66
The ratio could increase with the purchase of $170,000 of inventory on account.
