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Gelneren [198K]
3 years ago
7

The Central Publishing Company is about to publish its first reference book in managerial economics. It is now in the process of

estimating costs. It expects to produce 10,000 copies during its first year. The following costs have been estimated to correspond to the expected copies.
a. Paper Stock $8.000
b. Typesetting $15,000
c. Printing $50,000
d. Art (including graphs) $9.000
e. Editing $20,000
f. Reviews $3,000
g. Promotion and advertising $12,000
h. Binding $22.000
i. Shipping $10,000
In addition to the preceding costs, it expects to pay the authors a 13 percent royalty and its salespeople a 3 percent commission. These percentages will be based on the publisher’s price of $48 per book. Some of the preceding costs are fixed and others are variable. The average variable costs are expected to be constant. Although 10,000 copies is the projected volume, the book could sell anywhere between 0 and 20,000 copies.
Using the preceding data,
1. Write equations for total cost, average total cost, average variable cost, and marginal cost.
2. Draw the cost curves for quantities from 0 to 20,000 (in intervals of 2,000).
Business
1 answer:
S_A_V [24]3 years ago
6 0

Answer:

Total Cost is the cost that is fixed and does not vary directly with the level of output. According to this question typesetting, printing, editing, reviews, promotion, and advertising are fixed costs. The total fixed cost here is $100000.

Total Variable Cost is the costs that vary directly with the level of output. Variable costs are incurred on variable factors. The Total Variable Cost here is $49000.

Marginal cost is addition to the total cost when one more unit of output is produced.

<u>EQUATIONS </u>

TC = 100000 + 4.9Q

ATC = 100000 + 4.9Q / Q

AVQ = 4.9Q / Q

MC = Change in Total Cost / Change in Quantity = 4.9

<u>GRAPH</u>

Is attached as picture.

Conclusion: The AVC and MC both are equal to 4.9.

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Heath can pay $10 for one meal deal at the hamburger restaurant or $15 for
andrezito [222]

The marginal cost of the second meal deal is $5.

<h3>What is the marginal cost?</h3>

The marginal cost is the change in total cost when consumption is increased by one unit.

Marginal cost = change in total cost / change in consumption

($15 - $10) / (2 - 1) = $5

To learn more about marginal cost, please check: brainly.com/question/16399134

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8 0
2 years ago
Highlight four ways of improving productivity of labour as a factor of production​
UNO [17]

Answer:

Following are the four ways for improving the productivity of the labour is given below

Explanation:

  • If we give the proper resource assignment to each worker at the proper time we will increase the productivity of the labor .
  • Increasing the skills by guiding the labor to the latest technology so they  know the latest or the current technology they will increase the productivity .
  • If we enhancing the physical capital it means if we dependent on the machinery they will increase the productivity .
  • Giving the incentive to labor at the particular interval of time we will increase the productivity.
3 0
3 years ago
A financial institution has entered into an interest rate swap with company X. Under the terms of the swap, it receives 10% per
sergij07 [2.7K]

Answer:

The loss of the financial institution is $413,000

Explanation:

Let's say that after 3 years the financial institution will receive:

0.5 * 10% of $10million

= 0.5 * 0.1 * 10000000

= $500,000

Then, they will pay 0.5 * 9% of $10M

= 0.5 * 0.09 * 10000000

= $450,000

Therefore, their immediate loss would be $500000 - $450000

= $50000.

Let's assume that forward rates are realized to value the rest of the swap.

The forward rates = 8% per annum.

Therefore, the remaining cash flows are assumed that floating payment is

0.5*0.08*10000000 =

$400,000

Received net payment would be:

500,000-400,000= $100,000. The total cost of default is therefore the cost of foregoing the following cash flows:

Year 3=$50,000

Year 3.5=$100,000

Year 4 = $100,000

Year 4.5= $100,000

Year 5 = $100,000

Discounting these cash flows to year 3 at 4% per six months, the cost of default would be $413,000

4 0
3 years ago
The shareholders’ equity for the Fiesta Foods, Inc. on December 31, 2010 follows: 12% Preference share capital, P100 par, 20,000
fiasKO [112]

Answer:

26.65

Explanation:

The computation of the book value of an ordinary share is shown below

But before that the following calculations to be done

Balance for equity shares is

= Total shareholder equity - dividend paid to preference shareholders - redemption of preference shares

= 8,250,000 - (20,000 × 100 × 12% ×3) - (20,000 × 110)

= 8,250,000 -  720,000 - 2,200,000

= 5,330,000

And, the number of shares is 200,000

So, the book value of the ordinary share is

= 5,330,000 ÷ 200,000

= 26.65

6 0
3 years ago
Smith company sold inventory that cost $5,000 for $9,000 cash. Freight cost was $600 paid in cash. The freight terms were FOB sh
Mashutka [201]

Answer:

b. gross margin would be $4,000.

Explanation:

Distribution costs are considered when calculating gross margin.

Gross margin is given by sales subtracted by the cost of goods sold:

GM = \$9,000-\$5,000=\$4,000

The gross margin would be $4,000.

Although the freight cost should be included when calculating net income, more administrative costs could be added and, thus, net income cannot be determined with the given information.

5 0
3 years ago
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