A company, Megah Setia, has the following cost structure:

1. Is it a long run cost structure? Explain your answer briefly.
2. Complete the appropriate numbers in the column of “Average fixed cost”.
3. Complete the appropriate numbers in the column of “Average total cost”.
4. Complete the appropriate numbers in the column of “marginal cost”.

Assume Domino's Pizza has the following monthly revenue and cost functions:

Total Revenue= $10.00x Total Cost= $16000+$4.00x

a. Prepare a graph illistrating Domino's cost-volume-profit relationship. The vertical axis should range from $0 to $72,000, in increments os $12,000. The horizontal axis should range from 0 units to 6,000 units, in increments of 2,000 units.

b. Prepare a graph illustrating Domino's profit-volume relationship. The horizontal axis should range from 0 units to 6,000 units, in increments of 2,000 units.

c. When is it most appropriate to use a profit-volume graph?

In a survey of 529 travelers, 386 said that location was very important and 323 said that room quality was very important in choosing a hotel.

1. Construct a 90% confidence interval estimate for the population proportion of travelers who said that location was very important for choosing a hotel.
2. Construct a 90% confidence interval estimate for the population proportion of travelers who said that room quality was very important for choosing a hotel.

"The Role of the Room Rate" Analyze the hotel market in your state and determine if the room rates for the majority of hotels is elastic or inelastic. Explain your rationale and identify contributing factors (e.g., tax rates, competition, etc.). Imagine opening a small hotel in the town in which you attend class, Briefly describe the hotel and determine how you would determine the proper room rate.

New York City is the most expensive city in the United States for lodging. The mean hotel room rate is $204 per night.† Assume that room rates are normally distributed with a standard deviation of $55.

(a)

What is the probability that a hotel room costs $245 or more per night? (Round your answer to four decimal places.)

(b)

What is the probability that a hotel room costs less than $120 per night? (Round your answer to four decimal places.)

(c)

What is the probability that a hotel room costs between $210 and $300 per night? (Round your answer to four decimal places.)

A resort hotel annual sales revenue of $1,000,000, Variable costs of $350,000, and a fixed costs of $570,000. The fixed costs include $80,000 a year for land rental lease.

a) Calculate the hotel's breakeven point.

b) If the owners had an equity investment in the hotel of $1,200,000. What level of sales revenue is required for an operating income (BT) representing a 15% return on their investment?

c). In a renegotiation of the land lease, the landowner has offered management an alternative to the fixed lease currently being paid. The alternative in the lease currently being paid. The alternative is 10% of the resort's contribution margin.

i. If management accepts this proposal, what would be the resort hotel's new breakeven point?

ii. Calculate the indifference point.

iii. Explain whether management should accept this proposal. if next year's total sales revenue is expected to be $1,200,000?

iv. Should management accept this proposal if next's total sales revenue is expected to be $1,400,000

.:PS. I need all the C ( this includes " i " ; " ii " ; " iii " & " iv "

Question 3: Pricing Multiple Product Versions (show all work)

Casey’s company produces two versions of a software program, “Advanced” and “Basic”.

There are 3 segments of customers, the Managers, Executives and Students, and the respective segment sizes are 2000, 1000 and 5000. The per-unit cost of producing the Advanced version is $20, while the per-unit cost of producing the Basic version is $10. The willingness to pay (WTP) for each version, by segment, is given as follows:

WTP (Managers) = $100 (Advanced) and $55 (Basic)

WTP (Executives) = $62 (Advanced ) and $45 (Basic)

WTP (Students) = $45 (Advanced ) and $30 (Basic)

If Casey sells only the Advanced version, what is the optimal price it should charge and the profits? (Answer: $45, Profit=$200K)

If Casey decides to sell both versions, what are the optimal prices it should charge for each version? What is the optimal profit of the company? Assume that customers will buy if consumer surplus is at least 0 and that they need at least $1 extra in consumer surplus to switch between product versions. (Answer: Basic @ $30, Advanced @ $74, Profit=$228K)

1. Hotel has submitted an income statement for the end of the month that shows a net profit of $10,000. You will need to show that income statement based on the following given information. Food revenue and room’s revenue are the only two forms of revenue and food revenue is exactly the same as room revenue. Direct operating expenses for food is 50% of food revenue and direct operating expenses for rooms is 35% of room’s revenue. Marketing expenses are 20% of Total revenue, rent is 7%, A&G is 6%, Utilities are 8% Depreciation is 5%, Interest is 5% and Net Profit is 5%. Please put together a common-size income Statement using the correct format for the Hotel and make sure that you calculate the correct taxes (the only other additional expenses on the income statement) .

Pleasanton Studios Kersten Brown, the CEO of Pleasanton Studios, is having a tough week – all three of her top management level employees have dropped in with problems. One executive is making questionable decisions, another is threatening to quit, and the third is reporting losses (again). Kersten is hoping to find simple answers to all her difficulties. She is asking you (her accountant) for some advice on how to proceed. Pleasanton Studios owns and operates three decentralized divisions: Entertainment, Streaming, and Parks. Pleasanton Studios has a decentralized organizational structure, where each division is run as an investment center. Division managers meet with the CEO at least once annually to review their performance, where each division manager’s performance is measured by their division’s return on investment (ROI). The division manager then receives a bonus equal to 10% of their base salary for every ROI percentage point above the cost of capital. The Entertainment division manager, John Freeman, was the first to knock on Kersten’s door this morning. Entertainment, Pleasanton Studios’ first endeavor, produces movies for the big screen. Entertainment has been in operation since 1965. Last month, John had mentioned a proposal to build a new animation studio. The build would cost $4,910,000 with an estimated life of 20 years and no salvage value and would allow Entertainment to start producing animated movies. Animated movies were projected to bring in an additional $1,210,000 in revenues each year, but would increase annual production costs by $574,000. John had dropped in to let Kersten know he had decided not to move forward with the animation studio. This surprised Kersten – her quick mental calculation indicated that the studio would have a payback period of 8 years, much shorter than the expected life of the studio. Not entirely sure that her quick assessment was valid, Kersten needed to check with her accountant on the matter. Next to Kersten’s door was the manager of Streaming, which produces short-form (30 minute to one hour) episodes in addition to streaming the movies developed by Entertainment. Customers then buy subscriptions to the service. Run by division manager Reyna Imanah, Streaming was introduced in 2016 and has increased subscriptions by 20% every year since. Reyna’s complaint was that, based on the current bonus payout schedule, John Freeman’s bonus last year was significantly higher than hers. She points to the increasing subscription rates at Streaming, and says that her division is being punished for having opened so recently (her division’s facilities are much more recent than those in Entertainment). She currently has an employment offer from another company at the same base pay rate, and stated that she will accept this offer unless she feels her performance is being appropriately acknowledged and compensated. Kersten needs to look at the relative performance across divisions to determine how to proceed with Reyna. Pleasanton Parks is a theme park based on the movies from Entertainment and the series from Streaming. For many years, it was a popular year-round destination, with characters, rides, and a hotel. This park has lost popularity in recent years, and has been ‘in the red’ for the past two years. If the park is not profitable this year, you will need to decide whether to permanently close that division. Included in the ‘Fixed COGS’ for Parks is an annual $1,650,000 mortgage payment on the land and buildings for the park, which would still need to be paid (as a corporate level cost) if the park is closed and that segment is removed from the financial statements. Incidentally, you recently had a conversation with a Marriott Hotels executive, who would like to expand into the area. If you decided to close Parks, you are fairly certain that you could lease the hotel facilities to Marriott for $650,000 annually. A partial report of this year’s financial results for Pleasanton Studios can be found in Table 1 below. The ‘Selling and admin costs’ listed in Table 1 are directly incurred by each division, and are determined at the beginning of each year (that is, they do not change with increased/decreased production). In addition to the divisional information above, there are $2,000,000 in corporate costs that are currently allocated evenly between the three divisions. These costs are primarily due to employee benefits costs, which are billed at the corporate level. If the Parks division is closed, the decreased employee base would reduce allocated corporate costs by $500,000. Pleasanton Studios has a cost of capital of 12 percent (and Kersten uses the cost of capital as their required rate of return) and are subject to 32% income taxes. Before she can make any decisions, Kersten needs to evaluate this year’s performance results. She sets off to see you, the company’s accountant, for answers.

Required: Write your response in the form of a 1-2 page memo to Kersten Brown, from the perspective of the company accountant. Be sure to include all the financial analyses to support your conclusions, clearly showing your calculations, at the end of the memo or attached in a separate document. Be sure to address the following points in your memo.

a. Evaluate this year’s performance results for the three divisions. Your financial analysis should include a segmented income statement for Pleasanton Studios, as well as the current annual ROI, residual income and EVA for the three divisions.

b. Evaluate Entertainment’s decision not to invest in the new animation studio (i.e., was the decision appropriate and in the best interests of Pleasanton Studios), including the appropriate financial analyses to support your evaluation.

c. Evaluate the validity of Reyna Imanah’s complaint regarding her evaluated performance. Explain why it is (or is not valid), and what further information would be necessary.

d. Provide a recommendation on whether to close the Parks division, including all necessary financial analyses.