harry should add $20 per pound
The method of identifying the advantages and disadvantages of various options by looking at the incremental impact on total revenue and total cost caused by a very modest change in the value or input of each alternative (just one unit). Instead of making decisions based on totals or averages, marginal analysis encourages those that focus on small or gradual changes to resources. Examining the costs and possible gains of particular business operations or financial choices is known as marginal analysis. The objective is to ascertain whether the benefits from the change in activity will be great enough to outweigh the costs.
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Answer:
b. $127,200
Explanation:
Both sales and variable cost are dependent on the number of units sold.
The sales less the variable cost gives the contribution margin. The contribution margin less the fixed cost gives the net operating income.
As such, the total fixed cost of the corporation not traceable to the individual divisions
= $168,500 + $48,800 - $90,100
= $127,200
Answer:
The marginal benefit from selling the vane without restoring it is $200.
Explanation:
Marginal benefits are the extra income a company can get from selling one additional unit of production.
Zane had already spent $250 in purchasing the vane and the restoration process.
Zane has two options:
- Sell the vane as it is for $200.
- Keep restoring the vane, spend $200 more and sell the vane for $500.
If Zane decides to sell the vane as it is, his marginal benefit will be $200. That would not be enough to cover his costs, this transaction will result in a $50 loss.
If Zane decides to continue the restoration, then his marginal costs will be $200 extra, but his marginal benefit would be $500. If he chose this option he could end up earning a $50 profit.
Answer:
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