As the manager of a golf resort, you want to increase the number of tee times sold by 10 percent. Your staff economist (and juni
1 answer:
Answer:
The price of tee times needs to be decreased by 6.67%.
Explanation:
The manager wants to increase the number of tee times sold by 10 percent.
The price elasticity of demand for tee times is –1.5.
Percentage change in price of tee times to increase the demand by 10%
Price elasticity of demand =
-1.5 =
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Answer:
Explanation:
We multiply the variable cost by each volume of production
for example direct materials 5 x 80,000 = 400,000
5 x 100,000 = 500,000
5 x 120,000 = 600,000
<u>Then for the fixed cost:</u>
notice the company expect to produce 1,200,000 units.
If fixed depreciation is $2 per unit then
1,200,000 x $2 = 2,400,000 depreciation per year.
we then divide this value by 12 to get the monthly fixed depreciation
2,400,000/12 = 200,000
Same procedure goes for supervision
1,200,000 units x $1 per unit = 1,200,000 per year
1,200,000/12 = 100,000 per month
Finally we add both, fixed and variable to et total overhead for the relevant range.