Capacity makes a difference in the minimum price that can be set. If Rightway is close to capacity limits, it would replace regular business with the special order and need to price the order the same as regular business that it would forego to take the order. In this problem, 5% of capacity would be used for regular business, and 5% would be excess capacity. So, the special order would need to be priced high enough to replace the lost contribution margin of the 5% of regular business. E. Usually when operations get close to capacity limits, costs go up.
Question B Discuss the advantages and disadvantages of Job Order Costing. Be sure to include specific examples of the advantages/disadvantages that you discuss. Week 3 Discussion Questions Question A What is the difference between operations costing and a process costing system? How does a company decide whether to use a job order or a process cost system? Question B How does the treatment of costs differ in ABC systems as opposed to traditional cost systems?
This document will show results from the cash flow forecast and analysis of any possible future changes that could be made such as selling price, increasing or decreasing costs, etc. Prices of materials If the prices of the raw materials that the company are using increase then this will have an effect on the cash flow forecast because the figures will change due to the prices of the raw materials. If the raw materials change price then this will change the money that is in the total outcome. This will affect the company because if the company is buying expensive material and not making enough money back from the sold product then it is likely to make a loss and the company could therefore go bankrupt. Figures on the cash flow forecast at this point will look very poor.
Expected future prices can also affect the demand curve. If it is suspected that Tylenol will be more expensive next month, it would cause in shift that increases the demand of Tylenol. Since people are rational, they know that buying more now will save them money later. The supply side of the market also has various factors which cause a change in supply. The prices of inputs is an imperative example.
As the prices fall, the people would like to buy more and the quantity demanded increases. For example, the dial hand foam soap is buy three get one free. I would buy more because it saves me money therefore the quantity demanded
It depends on how this change would affect not only the company, but how it would affect the brokers? If they did make the change to more subjective assessments and cross-selling, they would have to consider the fact that many brokers may leave because they prefer their pay to be determined based on objective/incentive based measures. With a greater emphasis on cross-selling, this adds more areas the brokers need to become knowledgeable in which could require more time, resources, and training. One the other hand, this also adds a competitive advantage for the company and another area for brokers to make money, which could be a leg up within the bidding wars, especially if they have the opportunity to make more money. Overall, I would say that Bank of America needs to do their research and gather data from not only the brokers but also the customers to help determine their best course of
In addition, there will be the opportunity cost of not having cash available for more useful requirements i.e. supplier discounts, interest income. Therefore, Willow Company needs to hold optimum levels of inventory and increase its sales in order to improve its inventory turnover and cash
Keeping in mind the customer buying criteria, how would you increase margins for a low end product? How would you increase margins for a high end product? To increase margins for a low end product you would have to lower the price, for a high end product labor costs would need to be
According to Price (£) vs. Demand of Californians graph, it shows the negative relationship between price and quantity demanded. The higher the price of the product, the lower the quantity demanded would be. Or the lower the price, the higher quantity of Californian would be demanded. b) Elasticity of demand is a measure of how much the demand for a product changes when the price changes with all other factors held constant. It varies among products because some products may be more essential to the consumer.
In theory, demand range from anywhere above Qc. As the price increases, Californian olives, which are more expensive, are now considered valid candidates to join in the olive oil market. The only problem with Californians olives is that the imported European olive oil is being produced with a subsidy from the EU. Not only does this make Californian olives less of a competition, but according to fig 3, European producers are earning more (C x Qsub, fig 3) than they would if they did not have the subsidy (Pe x Qe). 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.