Sales units Sales Selling price: $250 100,000 400 Selling price: $250(0.1)= $275 137500 Variable cost: $160 variable cost: $160 Fixed cost: 22500 Fixed cost: 22,500(0.1)= 24750 1. Compute the company’s current break-even point in units and dollars? Break even Units: Fixed expense/CMUnit 22500/90 = 250 CM: 250-160= 90 Dollars: Fixed expense/ Cm ratio 22500/.36= $62500 CM Ratio: units 90/ $250 selling price = .36 2. What is the company’s current margin of safety in Units, dollars and percentage? Margin of Safety (DOLLARS) Budgeted – break even = 100,000-62500= 37500 (Percentage) 37.500/100.000= 37.5% (Units) 37500/250= 150 3.Compute the company’s margin of safety in units assuming the proposal is accepted.
And how? The moment there is speculation that crude will be trading higher, retailers usually increase their prices in an attempt to keep their margins intact for future purchases. Contrarily, when the price of the crude decreases, retailers are not inclined to lower rates as fast as they have raised it in order to maximize profits.” (Austin, 2011) So you can say when the price of oil is rising, the merchants have a small opportunity to gain a profit. Yet when the prices are low, they utilize this to take a advantage of the situation and delay the lowering of prices at the pump. It might be acceptable from their point of view for this reasoning.
The tax on depreciation requires several steps to calculate. We have to add the $70,000 base cost and $15,000 modification to get the depreciable cost of the equipment, which is $85,000. We then use the depreciation rates of .33, .45 and .15 for years 1, 2 and 3 respectively to find the depreciation expense. We can then apply the 40% tax rate to those expenses.
Explain the problem(s) associated with the labor productivity. Quantity $/Unit Deluxe car 4,000 units sold $8,000/car Limited car 6,000 units sold $9,500/car Labor. Deluxe 20,000 hours $12/hour Labor. Limited 30,000 hours $14/hour Solution: Firstly, we use the single-factor productivity for measuring productivity as explained below: The labor productivity (in hours) for Deluxe car: Units sold = 4,000 = 0.2 units per labor hour. Labor hours 20,000 The labor productivity (in hours) for Limited car: Units sold = 6,000 = 0.2 units per labor hour.
With the recent increase of overweight and obese Americans, a debate has surfaced over whether the government should tax sugary drinks. Taxing sugary drinks is the right step because it could change people’s choices behavior, it reduces the number of people who purchase these drinks, it could pay for health education and medical expenses, and it helps prevent obesity. Taxing sugary drinks could change people’s choices behavior. People need to change their life style and learn to live more healthily. Healthy choices are always more expensive than bad choices.
I believe whole-heartedly that government intervention as well as taxation should be justified when these industries are not providing optimal amount of a good for society’s well-being. When a tax is put on someone’s favorite soda, they are either going to buy a similar drink that is untaxed or not buy the drink at all. Typically, the body does not account for liquid calories as much as it does food calories, therefore making it easier to drink more sugared drinks. Usually people do not to feel full from a sugary drink, which makes it less likely to buy foods that will replace the taxed beverage. They would be more likely to drink one or two more cans of soda rather than eating a snack or a full meal.
Furthermore the brand has the current advertising campaign emphasizing on different ways to use baking soda can be assumed to not be very effective since advertising recollection is low. Option 1: Cut down on trade promotions lowering the amount of baking soda in stores and increasing the price per unit. Pros: Getting rid of some trade promotions such as free cases with purchases over a certain amount will help reduce overhead. Fewer products in the market would also hopefully increase demand. Cons: Retails could by less baking soda and could probably decide to sell baking soda at a higher price, which could deter some existing costumers from buying again.
It varies among products because some products may be more essential to the consumer. Products that are necessities or ‘need’ are more insensitive to price changes because no matter what happen, consumers would continue buying these products despite prices increases, even though, consumers might buy less, but overall, it’s least affected by these changes compared to the products that may not be necessary in daily life. Elasticity of demand for Californians for reduction in price from: I. £18 to £16 Price elasticity = %
Secondly, If US could change the drinking age to 18, less people will abuse alcohol. It doesn’t have sense wait to have Twenty years old the age that you're considered an adult under the law, and have the same right to drink alcohol at 18, If the age were lowered that would help promote a culture of responsible alcohol use. 18-year olds person would often go to bars rather than house parties, and wouldn't feel like they had to hide what they were doing. In turn, this would lead to less fatality from alcohol abuse. Also, lowering the drinking age would be a good thing not only for the economy, but also to prevent so many young people from breaking the law so much.
However, EU producers are looking to cut subsidies on the production of olive oil, which would increase the price to Pe and decrease the quantity supplied and quantity demanded to Qe. These measures are all in favor of non-European olive producers, since the competitiveness is improved as the price of European olive oil approaches the world