Answer:
e) $4,651
Explanation:
The break-even point is the level of activity that a company must operate to have its total cost equal to its total revenue. At this level of activity, the business makes a zero profit, as the total contribution is exactly the same as the total fixed cost.
It is important for the business to have an idea of the number of customers or units of product to sell inorder for it to cover its total fixed cost. This is the information the break-point analysis seeks to provide.
Working it out
Break-point in sales = Total General fixed cost/ Contribution margin ratio
Contribution margin ratio (CMR): Contribution is sales less variable costs. And the contribution margin ratio is the proportion of sales that is earned as contribution. The higher the better.
CMR = contribution/sales
Fixed cost = Contribution + net loss
We can now apply all these relationships to the question given:
Fixed cost = 1720 + 280
= 4,000
Contribution margin ratio = 1720/400 = 43%
Break-even sales ($) = 4000/0.43
= $4,651
The best answer for this question would be:
$150,000
Because in the method of the “non-working” spouse method, they are given a calculation of (18 - youngest child's age) × $10,000 (18 being the legal age)
Resulting that the solution would be:
<span> (18 - 3) × $10,000 = $150,000</span>
Answer:
1. $46,550
2. $405,000
3. $450,600
Explanation:
1. Computation of differential cost regarding the decision to buy the model 200
Differential cost = Cost of a new model 300 - Cost of a new model 200
Differential cost = $396,350 - $349,800
Differential cost = $46,550
So, the differential cost regarding decision to buy model 200 is $46,550.
2. Sunk costs are the costs which are already incurred by the entity in the past and which are not relevant to decision made today. In this case, sunk cost is the cost of the machine purchased seven years ago for $405,000.
3. Opportunity cost is the profit forgone by chosen alternative course of action. In this case, the Opportunity cost regarding the decision to invest in the model 200 machine is $450,600.
Answer:
B) 790-700r
Explanation:
Aggregate Expenditure is the expenditure by all the sectors of economy. By Households = Consumption (C), By Firms = Investment (I), By government = Govt spending (G) & tax leakages (T), By Rest world = Next Exports (NX).
Autonomous Expenditure is the level of expenditure in economy, which doesn't depend on level of Income = Y.
AE = C + I + G + NX
[500 + 0.8 (Y-150) - 300r] + [200 - 400r] + 200 + 10
500 + 0.8Y - 120 - 300r + 200 - 400r + 210
500 - 120 + 200 + 210 - 300r - 400r + 0.8y
790 - 700r + 0.8y
As, it can be seen that the part of AE = '790 - 700r', excluding '0.8y' : is not dependent on Income Y. So, it is Autonomous Expenditure
Answer:
Decision on the margins
Explanation:
Pool time seems to be having a greater effect at the moment, it makes sense for his to spend a bit more time in the pool and a bit less time on the bike.
However, this does not mean that it makes sense for her to spend all his time in the pool and no time on the bike. If he cut out all training on the bike, the value of a little bit of bike training might be higher than the value of the last hour of pool training. Dimitri does not treat biking versus swimming as an all-or-nothing decision. He makes small changes at the margin in the number of hours spent training for each activity.
Also they both realise that his time is fixed (20hrs) and anytime he wants to spend extra on one activit, is time he cannot spend on another (opportunity cost).
They are both trying to improve Dimitri's total time (exploiting opportunities to makes themselves better off).
An assumption that Dimitri realises that as he spends more time in the pool improving his swim time, his run and cycle times will suffer. As he swims more, his improvement is likely to slow down, while spending less time on cycling and running will cost him progressively more in terms of time.
Conclusion Dimitri is looking at the margins. His wife on the other hand, is not, she is ignoring the interaction, may be forgetting the decreasing improvements in swim and increasing deterioration in the other 2 legs.
