Question
Ellis Television makes and sells portable televisions. Each television regularly sells for $210. The following cost data per television is based on a full capacity of 10,000 televisions produced each period.
Direct material - $80
Direct Labour -$60
Manufacturing overhead(70% variable, 30% unavoidable fixed cos) -$40
A special order has been received by Ellis for a sale of 2,000 televisions to an overseas customer. The only selling costs that would be incurred on this order would be $6 per television for shipping. Ellis is now selling 6,000 televisions through regular channels each period. What should be the minimum selling price per television in negotiating a price for this special order?
Answer:
The minimum selling price = $174.
Explanation:
The minimum selling price to be acceptable for the special order be the same as the relevant variable cost of producing a unit.
The relevant variable cost = marginal cost of a unit
Marginal cost = Direct material + Direct labour + Variable manufacturing overhead + shipping cost
Marginal cost = 80 + 60 + (70%× 40) + 6
= 174
The minimum selling price = $174.
Note : The 30% balance of manufacturing overhead which represents unavoidable fixed costs is irrelevant for this decision. These are costs that would be incurred either way whether or not the special order is accepted.
Answer:
The correct answer is: the A option
If the company is on a tight deadline to complete a major project for an important client
Explanation:
If the company finds itself in difficult times due to work issues, then this weakens the argument for using coercive techniques.
Now, if the company has the luxury of hiring temporary workers to take care of the backlog and finish it on time, then this could further weaken the need for coercion.
If there is a highly skilled workforce, then the use of coercion can result in a reaction from employees. If employees are demotivated by the rigorous work culture, then the use of coercive techniques would only demoralize them further.
Answer:
Explanation:
Suppose there is one perfect competitive market for wheat There are 90 firms in that industry.
Consider the Table 1 given below:
Table 1: Industry supply
MC individual Quantity (9) Industry quantity (Q)
25 30 30*90=2,700
40 35 35*90=3,150
55 40 40*90=3,600
70 45 45*90=4,050
Take possible MC (Marginal cost) with their respective individual. Calculate the industry supply by multiplying 90 with the firm's individual quantities as shown in Table 1 above.
Going by the graphical diagram in the attached image below, we can derive that:
The orange line represents the industry supply. The lower and higher orange represents the lowest and highest quantity respectively.
The intersection industry demand and industry supply gives the short run price and quantity
Therefor, the short run price and quantity are $40 and $3,150 respectively. This and can be shown with dotted black line.
So Therefore
At the current short run market price, the firms will produce in short run because this price is above the average variable cost
In the long, some firms will exit the market, given the current market price.
No, it is not a valid acceptance of your offer, because it will depend on whether if he is just inquiring (most likely for another person), or if you are willing to lower the price in the first place.
hope this helps
