For some time, two firms have charged $2.00 per unit of strapping material for securing loads...

For some time, two firms have charged $2.00 per unit of strapping material for securing loads on long-haul trucks and each has been selling about 40,000 units per month. Last month, Strap-It reduced its price to $1.40 per unit and its volume increased to 48,000 units. During that month, TieDown (the other company) maintained its price at $2.00 but saw its volume decline to 36,000 units.

a. What is the price elasticity of demand facing Strap-It?

b. What is TieDown’s cross-price elasticity of demand for Strap-It price changes?

c. If the price elasticity of demand for TieDown is the same as that for Strap-It, what price reduction for TieDown would be required to increase its monthly volume back to 40,000 units per month?

Expert Solution

Rahul Sunny answered 2 years ago

What is the magnitude of the force per unit area between two infinite, uniformly charged plates...

What is the magnitude of the force per unit area between two infinite, uniformly charged plates with a surface charge density of +4.20

. Two firms in the same industry sell their product at $50 per unit, but one...

. Two firms in the same industry sell their product at $50 per unit, but one firm has TFC = $800 and AVC = $10 while the other has TFC’ = $1350 and AVC’ = 5. a. Determine the breakeven quantity of each firm. b. Find the degree of operating leverage for each firm at Q = 40 and Q =50.

4).Sales is $100 per unit; direct material is $25 per unit; direct labor is $15 per...

4).Sales is $100 per unit; direct material is $25 per unit; direct labor is $15 per unit, overhead is $10 per unit and $20,000 per month; selling and administrative expenses are $5 per unit and $10,000 per month. The company produced 900 units. Gross margin equals: a).$25,000 b).$40,500 c).$90,000 d).$10,500 5).Sales is $100 per unit; direct material is $25 per unit; direct labor is $15 per unit, overhead is $10 per unit and $20,000 per month; selling and administrative expenses...

Two firms in the same industry sell their product at $10 per unit, but one firm...

Two firms in the same industry sell their product at $10 per unit, but one firm has TFC = $100 and AVC = $6 while the other has TFC’ = $300 and AVC’ = $3.33. Determine the breakeven output of each firm. Why is the breakeven output of the second firm larger than that of the first firm? Find the degree of the contribution margin for each firm at profit= 600 for the first firm and at profit = 700...

4. Two firms in the same industry sell their product at $50 per unit, but one...

4. Two firms in the same industry sell their product at $50 per unit, but one firm has TFC = $800 and AVC = $10 while the other has TFC’ = $1350 and AVC’ = 5. a. Determine the breakeven quantity of each firm. b. Find the degree of operating leverage for each firm at Q = 40 and Q =50. *Please show work

Variance Part A The following standard costs per unit have been established by John, Inc.: Material...

Variance Part A The following standard costs per unit have been established by John, Inc.: Material (3 kilograms at $2 per kilogram) $ 6.00 Direct labor (2 hours at $12 per hour) $ 24.00 During the month, John produced 1,100 units, which was 100 more units than planned. They used 3,400 kilograms and 2,050 hours to do so. Total actual materials spending was $6,460, while total actual labor spending was $27,675. Required Choose EITHER materials OR labor, and compute...

Selling price per unit (package of 2 CDs)...................................... $20.00 Variable costs per unit: Direct material............................................................................................................... $4.00...

Selling price per unit (package of 2 CDs)...................................... $20.00 Variable costs per unit: Direct material............................................................................................................... $4.00 Direct labor...................................................................................................................... $5.00 Artist's royalties.............................................................................................................. $3.50 Manufacturing overhead.......................................................................................... $3.00 Selling expenses............................................................................................................ $1.00 Total variable costs per unit............................................................ $16.50 Annual fixed costs: Manufacturing overhead.......................................................................................... $180,000 Selling and administrative....................................................................................... $220,000 Total fixed costs................................................................................ $400,000 Forecasted annual sales volume (120,000 units)......................... $2,400,000 If the company's direct-labor costs do increase by 8%, what selling price per unit of product must it charge to maintain the same contribution margin...

Calculate the minimum special price per unit that would be charged by each of the three...

Calculate the minimum special price per unit that would be charged by each of the three divisions for a special order of 100 units of their products. Calculate the minimum special price per unit that would be charged by each of the three divisions for a special order of 1,000 units of their products. What would be the maximum price per unit that David Inc would pay to outsource (buy) 3,000 units of Division 1 products from an outside supplier?...

The standard cost for material and labour in a manufacturing process is provided per unit as:...

The standard cost for material and labour in a manufacturing process is provided per unit as: Material cost 5kgs shs.50 Labour cost 20hours shs.10 Material consumed in producing 500 units was Shs.25,650 against 2,700kgs of material. Wages paid was Sh6,050 for 11,600 hours, including 20 hours which was idle time due to machine breakdown. Required: Material cost variance Material price variance Material usage variance Labour cost variance Labour rate variance

Consider two products in the same product area: Sales price (per unit) Direct material cost Direct...

Consider two products in the same product area: Sales price (per unit) Direct material cost Direct labor cost Product 1 $62 $16 $14 Product 2 $78 $34 $12 Assuming the above unit price and costs remain unchanged, calculate the net operating profit margins of these products in 2009 and 2010 using the overhead allocation method as in the case. Which of the two products is more profitable? Overhead allocation rate 2009: .61 2010: .98\ I really need help understanding this....

Question