Suppose that a natural disaster substantially increase the cost of producing cheese, we would predict that the equilibrium quantity of cheese will decrease and the equilibrium price of cheese will increase because natural disasters can have a negative effect on the supply of the cheese. So, using the supply and demand curve, this will cause the supply to shift left while making demand curve steady since the effect will be on the supply part and not affecting the demand of the cheese.
<span>The annualized loss expectancy (ALE) is the product of the annual rate of occurrence (ARO) and the single loss expectancy (SLE).
The ARO is provided as 1% chance that a fire will occur per year. The SLE is provided as $2 million in damages. Thus the formula to calculate the ALE is:
ALE = 0.01 X $2,000000. The annualized loss expectancy is $20,000.</span>
Answer:
COGS will decrease by 2,597 dollars as will decrease by the proration of the factory overhead
Explanation:
we do cross mutiplication to solve for the COGS and FG based on actual overhead
<em> applied actual</em>
<em>COGS</em> 57,500 54,903 *A
<em>FG</em> <u> 20,000 </u> <u> 19,067 </u> *B
<em>Total</em> 77, 500 74,000
*A) 57,500 x 74,000/77,500 = 54,903
*B) 20,000 x 74,000/77,500 = 19,097
Decrease in COGS 57,500 - 54,903 = 2,597
Answer:
Products Selling price Unit variable cost
$ $
Junior 50 15
Adult 75 25
Expert <u>110 </u> <u> 60</u>
Total <u> 235 </u> <u> 100</u>
The sales price per composite unit = $235
The contribution margin per composite unit
= Composite selling price - Composite unit variable cost
= $235 - $100
= $135
Break-even point in units
= <u>Fixed cost</u>
Contribution per unit
= <u>$114,750</u>
$135
= 850 units
Break-even point in dollars
= Break-even point in units x Composite selling price
= 850 units x $235
= $199,750
Income Statement
$
Total contribution ($135 x 850 units) 114,750
Less: Fixed cost <u>114,750</u>
Net profit <u> 0</u>
Explanation:
Sales price per composite unit is the aggregate of all the selling prices.
Contribution margin per composite unit equals composite selling price minus composite unit variable cost.
Break-even point in units is fixed cost divided per composite contribution margin per unit.
Break-even point in dollars equal break-even point in units multiplied by selling price.
Income statement is prepared by deducting the total fixed cost from the total contribution.
