Six years ago a commercial property owner paid $490,000 for her complex which included 10 acres of land valued at $100,000. Usin
1 answer:
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Answer:
a. $120
b. 5,000 units
c. 7,000 units
Explanation:
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Workings and explanations :
Contribution margin per unit = Sales - Variable Cots
= $200 - $80
= $120
Break even (units) = Fixed Costs ÷ Contribution margin per unit
= $600,000 ÷ $120
= 5,000 units
Unit Sales to achieve a target profit = (Targeted Profit + Fixed Costs) ÷ Contribution margin per unit
= ($240,000 + $600,000) ÷ $120
= 7,000 units
Margin of Safety = Expected sales - Break even Sales
Note : There is no much details about the current sales level
<u>FULL DETAILS OF THE QUESTION IS AS FOLLOWS :</u>
<em>Information concerning a product produced by Ender Company appears here: Sales price per unit $ 200 Variable cost per unit $ 80 Total annual fixed manufacturing and operating costs $ 600,000</em>
Answer:
c. total revenue does not change.
Explanation:
A price elasticity of demand can be defined as a measure of the responsiveness of the quantity of a product demanded with respect to a change in price of the product, all things being equal.
Mathematically, the price elasticity of demand is given by the formula;
The demand for goods is said to be elastic, when the quantity of goods demanded by consumers with respect to change in price is very large. Thus, the more easily a consumer can switch to a substitute product in relation to change in price, the greater the elasticity of demand.
Generally, consumers would like to be buy a product as its price falls or become inexpensive.
For substitute products (goods), the price elasticity of demand is always positive because the demand of a product increases when the price of its close substitute (alternative) increases.
If the price elasticity of demand for a product equals 1, as its price rises the total revenue does not change because the demand is unit elastic.