Neutronics makes four different models of gas identifiers. Next year, the company anticipates total overhead costs of $2.5 milli
1 answer:
You might be interested in
Answer:
$11880
Explanation:
Given that:
In a local Honda Dealership;
Last year, your dealership earned a record profits of $1.5 million
according to the local Chamber of Commerce, your earnings were 10 percent less than either of your competitors.
The Price Elasticity of demand E = - 4.5
Marginal cost of a midsized automobile = $11,000
Let assume that In your market, you compete against two other dealers
From The above given data , the objective is to determine the What price should you charge for a midsized automobile if you expect to maintain your record sales.
So; in order to achieve that ; we consider the scenario of an Oligopoly market by using the markup formula for homogeneous product Cournot Oligopoly which can be represented as:
P = 1.08 × 11000
P = $11880
Hence. the price you should charge for a midsized automobile if you expect to maintain your record sales is $11880
Answer:
Net income will increase by $11,250
Explanation:
Provided information,
Current sales = 75,000 units which represents 80% capacity
Therefore, 100% capacity =
Fixed cost at 100% capacity = $1.25 93,750 = $117,187.50
Therefore,
Current net income
Sales = 75,000 $7.00 = $525,000
Less: Variable cost = 75,000 $3.50 = $262,500
Less: Fixed Cost = $117,187.50
Net Operating Income = $145,312.50
Now with the additional order, which is of 15,000 units the additional ideal capacity of 20% will be utilized, further no fixed cost will be incurred, as the entire fixed cost for 100% capacity is utilized, thus
Sales = 15,000 $3 = $45,000
Less: Variable cost = 15,000 $2.25 = $33,750
Net Income = $11,250
Thus, the net income will increase by $11,250