Answer:
Accounting profit = $50
Economic profit = $10
Explanation:
Accounting profit = Revenue - Explicit cost
$60 - $10 = $50
Economic profit = Accounting profit - Opportunity cost
$50 - $40 = $10
I hope my answer helps you
Answer: $117,000
Explanation:
So we are to calculate the Raw Materials purchased during the year.
Logically speaking the following should hold,
Raw materials purchased during the year + beginning raw materials = ending Raw materials + Raw materials used
Agreeing on that and rearranging the formula we will have,
Raw Material purchased during the year = Raw Material used during the year + Ending Raw Material Inventory - Opening Raw Material Inventory
Slotting in the figures we will then have,
Raw Material purchased during the year = 114,000 + 56,000 - 53,000
= $117,000
Raw materials purchased during the year amount to $117,000.
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Answer:
$400 per unit
Explanation:
Variable cost $60 * 20 units = 1200
Fixed cost = $4000
Total current cost is $5,200
Total sales is 280 * 20 = $5,600
net income (Sales - Total cost) = $400
If CEO wants to increase net income by $1,100 the
Net income = Total sales - Variable cost -Fixed cost
Net income $1,500 = x - ($60 + $40) * 20 units - $4,000+ $500
Total sales = $1,500 + $2,000 + $4,500
Total sales = $8,000
Sales price per unit = $8,000 / 20 units
Sales price per unit = $400 / unit
Answer:
1. 300 tires
2. 150 units
3. 32 times
4. 11.4 days
5. $2,400
6. $2,400
Explanation:
Economic order quantity is the quantity at which business incur minimum cost. This is the level of order where the holding cost equals to the ordering cost of the business.
Material cost remains the same whatever the the order level. The costs that vary with the change in order level are ordering cost and holding cost.
The cost incurred to for each order placed is called ordering cost and cost which incurred to hold the inventory for a specific period is called holding cost.
EOQ = 
EOQ = 
EOQ = 300 units
1. EOQ is the level of order That should be placed to minimize the total cost of the business. The manager should order 300 tires in each lot.
2.
Average Inventory = EOQ / 2 = 300 / 2 = 150 units
3.
Number of orders = Total yearly demand / EOQ = 9,600 / 300 = 32 times
4.
Number of days = ( EOQ / total demand ) x 365 = 300 / 9600 x 365 = 11.4 days
5.
Fixed ordering cost = Total Demand / EOQ x $75 = (9600 / 300) x $75 = $2,400
6.
Holding cost = Average Inventory x holding cost per unit = 150 units x $16 = $2,400
Here Holding cost and ordering cost is same at EOQ level.
