Answer:
The correct answer is the option C: the restaurant has been around for many years and the customers have a nostalgic preference for it.
Explanation:
It is quite understood that if a restaurant has a wide number of loyal customers due to their brand recognition then that company will ultimately tend to charge a higher price to the customers because of their loyalty. However, this unique situation of loyalty may not explain completely how that business could do it when there are many other competitors around the same region, and therefore that if an explanation must be found to why the company can charge more and still remain competitive then more details of the company's strategy must be revealed.
Answer:
It would take 162 minutes to make one unit of product X.
Explanation:
Giving the following information:
Hours available to produce the products are the constrained resources.
Soap could reduce the processing time for X by 10 percent.
X Y
Sales Price $20 $25
Variable Cost 14 15
Hours needed to process 3 5
<u>First, we need to determine the number of minutes required to make one unit of Product X under the new method:</u>
Number of minutes required= (3*60)*0.9= 162 minutes.
It would take 162 minutes to make one unit of product X.
B) False. The contribution margin per hour of Product B is higher than product Y.
C) False. The contribution margin per hour of $2 was before the improvement in product X.
D) False. Product Y has a higher contribution margin per unit but lower compared to the contribution margin per hour.
Answer:
$154,900
Explanation:
The computation of the total cost of operating the assembly department as follows:
= Direct expenses of assembly department + allocated amount
= $123,400 + $52,500 × 69,000 ÷ (69,000 + 46,000)
= $123,400 + $52,500 × 69,000 ÷ 115,000
= $123,400 + $31,500
= $154,900
Answer:
The correct answer is option b.
Explanation:
The number of units of output sold is 8,000
.
The sales revenue is $9,600,000
.
The variable costs are $6,000,000
.
The fixed costs are $2,600,000.
The price of the product
= 
= 
= $1,200
The average variable cost is
= 
= 
= $750
Profit = TR - TC
Profit = 
$1,270,000 = $1,200Q - $750Q - $2,600,000
$3,870,000 = $450Q
Q = 
Q = 8,600 units
Explanation:
Income Elasticity of Demand(IED)= Percentage change in quantity demanded/ Percentage change in income
-Percentage change in Q:
%Change in quantity demanded= (q2-q1/q1) = (10-8)/8= 0.25
-Percentage change in Income:
%Change in income= (i2-i1/i1) = (4,500-4,000)/4,000= 0.125
IED= 0.25/0.125= 2
This indicates that the Shaffers are very sensitive to changes in income when it comes to eating out. Which means that changes in income will change significantly the number of times they eat out.
2. Restaurant meals are normal goods, in this case, because when income rises, they ate more in restaurants, then the units consumed for this good increase too.
