Answer:
The optimal stocking level is 45 muffins.
Explanation:
First we have to calculate the Overage cost Co = Purchase price - Salvage value = $0.2 - 0 = $0.2
Then the Underage cost Cu = Selling price - Purchase price =$0.80 - $0.2 = $0.60
Service level = Cu / (Cu + Co) = $0.60/($0.60+$0.2) = $0.75
Hence, optimal stocking level = Minimum demand + Service level *(Maximum demand - Minimum demand)
optimal stocking level = 30 + 0.75*(50-30) = 45
The optimal stocking level is 45 muffins.
Optimal stocking level = 68.75 Muffins
C Variable Cost Fixed
D Variable Cost VariableA) Choice C B) Choice D C) Choice A D) Choice B
Answer:
The correct answer is letter "B": Choice D.
Explanation:
Fixed costs are business expenses that do not change when production levels increase or decrease. These are one of two types of business expenses and the other is variable costs. Variable costs change with increases or decreases in production volume. Then:
1)The wages paid to the taco makers and other employees - Variable Costs
2)Materials (e.g., cheeses, salsa, tomatoes, lettuce, taco shells, etc.) used to make the tacos - Variable Costs
Answer: George's initial price markup over marginal cost was approximately 41.2% George's desired markup is 45% Since George's initial markup, or actual margin, was Less than his desired margin, raising the price was profitable
Explanation:
a) Price Elasticity of Demand = [(Q1-Q2)/(Q1+Q2)] / [(P1-P2)/(P1+P2)]
= 5000- 4000/4000+ 5000) / 8.50- 9.50 /8.50 ₊9.50 =
1000/8000 / -1/ 18 = 0.125/-0.055 = -2.2
George's initial price markup over marginal cost was approximately
when Marginal cost = $5
b)initial price markup = Price - marginal cost / price = 8.50 - 5.00/ 8.50 = 0.412= 41.2%
C) George's desired margin = 1/absolute value of price elasticity = 1/ 2.2= 0.45= 45%
.
D)Since George's initial markup or actual margin was less than his desired margin, raising the price is profitable.
This is because When the markup is lower than the margin, business is running on a loss, so it is nessesary to increase price.
The price elasticity of demand for George's T-shirts is approximately -1.7, indicating that demand is elastic. The initial markup over the cost price was 70%, but the question doesn't specify the desired markup or if raising the price satisfied that margin.
The price elasticity of demand measures how sensitive the quantity demanded is to a price change. It's calculated as the percentage change in quantity demanded divided by the percentage change in price. In George's case:
So, the percentage change in quantity = (4000-5000)/5000 = -20% and percentage change in price = ($9.50-$8.50)/$8.50 = 11.76%. Therefore, price elasticity of demand = -20%/11.76% = -1.7 (approx.). This indicates that the demand is elastic, meaning quantity demanded is sensitive to price changes.
Regarding the price markup, this is the percentage increase over the cost price. The initial markup = ($8.50-$5)/$5 = 70%. The question didn't specify the desired markup, or if raising the price satisfied the desired margin.
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Answer and Explanation:
The preparation of the sales section of the income statement is presented below:
Income Statement
For the year ended
Sales
Sales revenue $903,400
Less:
Sales Discount $15,400
Sales return & allowances $22,000
Net Sales $866,000
hence the net sales is $866,000
The freight out would not be considered. Hence, ignored it
b. its primary goal is to reap monopoly profits by replacing competition with cooperation.
c. producing homogenous output is more expensive than producing differentiated output.
d. producing differentiated output is more expensive than producing homogenous output.
e. it has a monopoly, but potential entrants exist in the form of contestable markets.
Answer:
a. it is part of a group of firms that has formally agreed to control the price and the output of a product.
Explanation:
A monopolistic competitive firm ensures that, the price of goods and the output of the products produced by them is controlled. This helps them to dictate the market in which they find themselves in.
2. %
Answer:
Margin of safety in dollars is $91,000
Margin of safety as percentage of sales is 26%
Explanation:
Margin of safety can be defined as the amount of output or sales that a business can make before it reaches its breakeven point.
To calculate margin of safety in dollars
Margin of safety= Sales - Breakeven sales
Margin of safety= 350,000- 259,000
Margin of safety= $91,000
To calculate margin of safety as a percentage of sales, we use the following formula.
Margin of safety = (Sales- Breakeven point) ÷ Sales
Margin of safety = (350,000- 259,000)÷ 350,000
Margin of safety= 0.26= 26%
Answer:
1. Margin of Safety(MOS) expressed in dollars =91,000
2. Margin of Safety(MOS) expressed as percentage = 26% (to the nearest whole number)
Explanation:
The MARGIN OF SAFETY is applied as a measure of the difference between the actual sales and break-even sales.
In other words, to find Margin of Safety, you subtract break-even sales from the actual sales.
MOS is used to determine at which level sales can drop before a business incurs losses. It is a tool by which actual or budgeted sales may be decreased without resulting in any loss.
1. Formula for Margin of Safety(in dollars):
Margin of Safety(in dollars) = Actual/Budgeted Sales ➖ Break-even Sales
Where:
Actual Sales = $350,000
Break-even Sales = $259,000
➡ Margin of Safety(in dollars) = $350,000 ➖ $259,000 = 91,000(ans)
2. Formula for Margin of Safety (expressed as a percentage) = [(Actual/Budgeted Sales ➖ Break-even Sales) ➗ Actual/Budgeted Sales] ✖ 100%
Where:
Actual Sales = $350,000
Break-even Sales = $259,000
➡ Margin of Safety (in percentage) = [($350,000 ➖ $259,000) ➗ $350,000] ✖ 100%
= ($91,000 ➗ $350,000) ✖ 100%
= 0.26 ✖ 100% = 26%(ans).
Answer:
Cash would be debited $5,000 on the left side of the T account. Unearned programming service revenue will be credited $5,000 on the right side of T account.
Explanation:
When cash is received, cash increases and is debited by $5,000 (note Cash is an asset account, when asset and expense accounts increase they are debited. When revenue, liability, and owner's equity increase they are credited).
The revenue for this service is not earned yet so we pass the other leg of the entry to Unearned Programming Revenue. It is a revenue account so when it increases we credit. So we credit $5,000 to this account.
When a business receives cash in advance for services, this is treated as a liability called 'Unearned Revenue'. The Cash account would be debited (increased) by $5,000 and the Unearned Revenue account would be credited (increased) by $5,000.
When Major Programming receives $5,000 in advance for providing programming services, this is considered as prepayment and thus, it is recorded as a liability on the balance sheet. In terms of T-accounts, it would be recorded as follows:
Therefore, the T-accounts would reflect an increase in both Cash and Unearned Revenue by $5,000 each, resulting from this transaction.
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