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3 years ago

Speedy Bikes could sell its bicycles to retailers either assembled or unassembled.

Business

1 answer:

Feliz [49]3 years ago

7 0

Answer:

Speedy Bikes

a. Incremental Analysis for the sell-or-process-further decision:

Cost of an Cost an Difference

unassembled bike assembled bike

Alternative 1 Alternative 2 Increment

Sales price of unassembled bike $450 $495 $45

Manufacturing cost per unit $290 $312 (22)

Net operating income $160 $183 $23

b. Speedy should process the bikes further.

c. It will generate an incremental net operating income of $23 per bike.

Explanation:

a) Data and Calculations:

Cost of an Cost an

unassembled bike assembled bike

Direct materials $150 $155

Direct labor 70 80

Variable overhead (70% of direct labor) 49 56 ($80 * 70%)

Fixed overhead (30% of direct labor) 21 21

Manufacturing cost per unit $290 $312

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3 years ago

Experts in operations management for service industry type businesses stress:

stealth61 [152]

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3 years ago

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kati45 [8]

Answer:

$328,400

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therefore,

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3 years ago

You are asked to make comparisons of two pairs of countries. The first pair are the Latin American countries of Chile and Argent

aleksklad [387]

Answer:

Part a: According to Solow model higher per capita real GDP will be in Chile because of its highest saving rate.

Part b: The per capita capital stock or the labour ratio is the primary factor for these differences in the simple Solow model.

Explanation:

Part a:

According to Solow model higher per capita real GDP will be in Chile because of its highest saving rate.

In Solow model the GDP per capita is defined as

$y=k^{\alpha}=f(k)$

Also the steady state path is given as

$sf(k)=(s+n)k\\\frac{s}{s+n}=\frac{k^*}{f(k^*)}\\\frac{s}{s+n}=\frac{k^*^{\alpha-1}}{k^*}\\\frac{s}{s+n}={k^*^{\alpha-2}}$

As all other parameters are same thus the country with higher value of s will have a higher per capita GDP.

According to the Solow model, higher saving rate means larger capital stock and high level of output at the steady state.

Higher saving rate leads to faster growth in Solow model. So there is higher per capita real GDP for the country that has higher saving rate.

Part b:

In Simple Solow Model, the steady state per Capita GDP, $y^*$ is the function of the steady state per capita capital stock given as $k^*$

Now this indicates that

$y^*=f(k^*)$

where f is an increasing concave function i.e. f'>0 and f''<0

Thus the sole dependence of per capita GDP is on per capita capital stock.

Thus the per capita capital stock or the labour ratio is the primary factor for these differences in the simple Solow model.

6 0

3 years ago

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