company that writes computer software that is used by doctors to bill patients. Last year you earned a total revenue of $90,000. Your costs for equipment, rent, and supplies were $60,000. To start this business you quit a job at another computer software firm that paid $40,000 a year. A yearly normal profit for your computer software firm would be Question 6 The marginal product of the second worker is. Question 7 Demand for the product of an industry in perfect competition is assumed to be inelastic
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avoidable fixed cost. Consultant want to discontinue 110XL, half of the current customers wiil switch to Product 110 if XL is cut. Are the products substitutes or compliments? Substitutes What are the relevant costs and revenues? Revenue will fall by $20,000 while costs will fall by 19,500 for a net loss of 500 if it is discontinued. Should discontinue Product 110XL? Keep it, profit will be higher with the product than without it. Price Estimated sales Total Revenue Total Costs $8.00 80
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mode of production Process where the ratio of labour to other inputs is relatively large. Where alternative techniques of production are possible , labour intensity mode can be varied in response to changes in the relation between real wages and the cost of using other inputs. A mode of production referrers to the way production is carried out. Labour refers to the physical efforts or people are required to carry out a process of production. Therefore a labour intensive mode of production where more
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your assignment – just use this document to check that your costs are realistic in relation to your selling price. These guidelines are optional and intentionally very general. Marginal Costing Statement / Income Statement On average, the Cost of Sales for footwear is 58-62% of the sales figure. Cost of sales is the best estimate of variable cost, as this will include direct materials, direct labour and any direct overheads. If cost of sales is 58-62% of sales, then gross profit margin (gross
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decrease is a good idea. If a decrease in price is justified from a revenue perspective, one must think about the costs of producing the extra output in order to determine whether the price decrease is profit maximizing. On the other hand, if an increase in price is justified from a revenue perspective, it must be the case that it is also justified from a profit perspective simply because total cost decreases as less output is produced and sold. Total revenue is maximized when selling an extra unit would
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our inventory cost during the hurricane season and at the end average total cost. We are taking risk of a higher cost to be able to supply possible high demand occurs before and after a possible hurricane or storm and increase our profit by the help of low cost according to our rivals. Normally we could choose not to have high inventory and be able to supply these goods from neighbor states for a higher cost during an emergency or when risk of an emergency occurs. Even if the cost would be higher
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Find the value of c that completes the square. 1) x 2 + 6 x + c 2) z 2 − 10z + c 3) x 2 − 34 x + c 4) r 2 + 32r + c 5) r 2 − 6r + c 6) r 2 + 20r + c 7) x 2 − 38 x + c 8) a 2 + 12a + c 25 9) x − x+c 13 10) a 2 − 7a + c 2 11) z 2 + 11 z+c 8 12) m 2 + 3m + c 13) m 2 + 40m + c 14) x 2 + 13 x + c 15) x 2 − x + c 1 16) n 2 − n + c 2 17) a 2 − 8a + c ©M T2g0C1k1v QKcuJtMam ySloEfZtpwhaBrtez QL6LlCN.P L GAgl5la BrJiigyh7txsl sraegs5eErPvBexdT
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trade would increase because the labor unit cost in Germany has declined. Exercise 10 Page 226: Exercise 2 Page 260 Variable Input Total Product Average Product Marginal Product 0 0 - - 1 8 8 8 2 28 14 20 3 54 18 26 4 54 13.5 26 5 100 20 46 6 108 18 8 7 98 14 10 Exercise 3 Page 261 Crew Size | Amount of fish caught | Average productivity | Marginal productivity | 2 | 3 | 1.5 | - | 3 |
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head: MAXIMIZING PROFIT WITH MARGINAL ANALYSIS 1 Maximizing Profit with Marginal Analysis Timothy L. Gould Western Governors University MAXIMIZING PROFIT WITH MARGINAL ANALYSIS 2 Abstract In today’s market it is important to not only stay competitive but be able to grow with the market. In order to accomplish this, a company must pay close attention to its total revenue earned versus its total costs incurred. It must maximize its
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(traditional) costing system? Evaluate the features of this system. Should Wilkerson abandon its overhead cost allocation system and make managerial decisions based on contribution margin (price less variable costs); thereby in effect using marginal costs rather than average costs? Note: only direct materials and direct labor costs are assumed to be variable here. 3. Compute revised product costs based on an ABC (activity-based costing) analysis. Interpret your findings regarding the profitability
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