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Annette [7]
3 years ago
7

Firm X is selling a vehicle with an MSRP of $30,000 and dealer discount of 10%. Unit cost is $20,000 and fixed costs are $1.4 bi

llion. How many units must they sell to break even?
Business
1 answer:
seraphim [82]3 years ago
5 0

Answer:

Number of vehicles to be sold to reach break-even point is 200,000 unit

Explanation:

<em>Computation of Dealer’s Discount: </em>

Dealer  Discount = MSRP * Rate of Discount

=$30,000×10%

=$3,000

<em>Computation of net selling Price:  </em>

Net Selling Price = MSRP - Dealer ′ s Discount

=$30,000 - $3,000

=$27,000

<em>Computation of Contribution Margin:  </em>

Contribution Margin = Net Sales - Unit Cost

=$27,000 - $20,000

=$7,000

<em>Compute the number of units to reach break-even point for Firm X.</em>

Break-even point = Fixed cost / Contribution per unit

=$1,400,000,000  / $7,000

=200,000 units

​

Therefore, number of vehicles sold to reach break-even point is 200,000.

Nb: MSRP means manufacturer's suggested retail price

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For 300 cups of lemonade, Wanda profit's will be 0.32 * 300 = 96
Therefore, Wanda's economic profit is $96.
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3 years ago
Jose owns a dog whose barking annoys Jose's neighbor Amy. Suppose that the net benefit of owning the dog is worth $400 to Jose a
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Explanation:

Jose has to pay $600 to Jane for her inconvenience.

In Accordance with Coase theorem, when two conflicting parties exist, one has to ‘buy the right’ from the other party.

Which In this scenario or case, Jane has the ‘right to prevent Jose from having a dog’.

Thus, Jose has to pay compensation to Jane so that he can keep his dog and at the same time Jane is also compensated for the inconvenience which may arise later.

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3 years ago
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Pattison Corporation is a service company that measures its output by the number of customers served. The company has provided t
777dan777 [17]

Answer:

B. $1,500 F

Explanation:

                                          Flexible    Planning     Activity  

                                          Budget     Budget      Variance

Customer served (q)             17             20  

Travel expense ($500q)   $8,500     $10,000     $1,500 (Favorable)

Workings

<u>Travel Expense </u>at 500q

Flexible budget = 500 * (17) = $8,500

Planning budget = 500 * (20) = $10,000

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3 years ago
Historically, a factory has been able to produce a very specialized nano-technology component with 35% reliability, i.e., 35% of
pochemuha

Answer:

Yes

Explanation:

From the given output

The  Probability of getting 13 or more passed

when the  reliability = 0.35. can be calculated as follows

=0.0258+0.0109+0.0039+.0012+0.0004 = 0.0422   ≈  4.2%

Since the probability is less than the  5% level we will therefore reject the Null hypothesis  

answer : YES

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3 years ago
Esquire Company needs to acquire a molding machine to be used in its manufacturing process. Two types of machines that would be
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Answer: Machine B because it has the lower Present Value

Explanation:

<h2>Machine A</h2>

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= $2,315.97

Present Value of Costs;

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Maintenance of $1,000 per year for  years.

Present value of maintenance= 1,000 * Present value factor of annuity,  10 years, 8%

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Machine A Present Value

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No salvage value.

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= -$9,567.79

Present Value = -40,000 - 9,567.79

= -$49,568

5 0
3 years ago
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