Cove’s Cakes is a local bakery. Price and cost information
follows:
| Price per cake | $ | 14.01 | |
| Variable cost per cake | |||
| Ingredients | 2.19 | ||
| Direct labor | 1.12 | ||
| Overhead (box, etc.) | 0.29 | ||
| Fixed cost per month | $ | 3,955.80 | |
Required:
1. Calculate Cove’s new break-even point under each of the
following independent scenarios: (Round your answer to the
nearest whole number.)
a. Sales price increases by $1.10 per cake.
b. Fixed costs increase by $450 per
month.
c. Variable costs decrease by $0.44 per
cake.
d. Sales price decreases by $0.50 per
cake.
2. Assume that Cove sold 400 cakes last month.
Calculate the company’s degree of operating leverage. (Do
not round intermediate calculations. Round your answer to 2 decimal
places.)
3. Using the degree of operating leverage
calculated in Requirement 2, calculate the change in profit caused
by a 5 percent increase in sales revenue. (Round your final
answer to 2 decimal places (i.e. .1234 should be entered as
12.34%.))
In: Accounting
| Selling price of ZylexB per gallon | $ 17.00 | |||||||||
| Selling price of ZylexA per gallon | $ 11.00 | |||||||||
| Minutes to manufacture a gallon of ZylexA | 25 | |||||||||
| Additional minutes to manufacture a gallon of ZylexB | 10 | |||||||||
| Cost per gallon of resources for manufacturing: | ||||||||||
| ZylexA | Additional Cost - ZylexB | |||||||||
| Material | $2.00 | $1.75 | ||||||||
| Labor | 2.50 | 0.50 | ||||||||
| Variable overhead | 2.25 | 1.10 | ||||||||
| Both products have been successful and demand for both products is strong and beyond the company's capacity. Since it takes additional time to manufacture ZylexB, the vice president of production is trying to determine whether ZylexB should be produced. | ||||||||||
| Required | ||||||||||
| Which product makes the largest contribution to company profit, given a capacity constraint measured in terms of production time? | ||||||||||
| ZylexA | ||||||||||
| Incremental revenue of Zylex B | ||||||||||
| Incremental costs: | ||||||||||
| Incremental profit of ZylexB | ||||||||||
In: Accounting
Explain the terms, Price Taker and Price Seeker. For each case, identify a market structure where we are likely to observe the behavior.
150 words
In: Economics
Advise what Price Elasticity of Demand is. The more price-elastic demand is, the more responsive consumers are to a price change. TRUE or FALSE? Please Explain. The less price-elastic demand is, the less responsive consumers are to a price change. TRUE or FALSE? Please Explain.
In: Economics
Compute Bond Price Compute the price of a 8.0 percent coupon bond with 15 years left to maturity and a market interest rate of 7.0 percent. (Assume interest payments are semi-annual.) Is this a discount or premium bond?
In: Finance
|
Price for Services Provided |
Customers are charged $91 per hour for services rendered |
|
Sales Price of Retail Product |
Customers are charged $65 for each unit purchased |
|
Cost of Inventory for Products Purchased |
Inventory can be purchased for $30 per unit |
Record the following transactions in the General Journal.
|
Trans. |
Date |
Description |
|
1 |
Dec. 1 |
Borrow $128,250 from the local bank and signed a five-year installment note with payments of $2,600 at the end of each month beginning December 31. The annual interest rate is 8%. Current portion of the note payable at year end after December payment = $21,875 |
|
2 |
Dec. 1 |
Purchase a vehicle necessary for business operations for $7,400 cash. The vehicle has a six-year life with a residual value of $200 |
|
3 |
Dec. 1 |
Issue 15,000 shares of no-par value common stock for $5 per share to obtain the funds necessary to start your business. |
|
4 |
Dec. 1 |
Paid $18,000 for one year of insurance in advance. |
|
5 |
Dec. 1 |
Purchased a building for $50,000. Paid $2,000 in back taxes; $2,000 in realty fees. It has a 25-year useful life with residual value of $6,000. |
|
6 |
Dec. 3 |
Purchase supplies on account, $5,000. |
|
7 |
Dec. 3 |
Purchase 300 units of inventory with terms 2/10 net 30. |
|
8 |
Dec. 6 |
Provide 28 hours of services to customers for cash (calculate using your hourly service rate) no terms specified. |
|
9 |
Dec. 10 |
Sell 150 units of inventory on account. (Perpetual method = 2 entries) |
|
10 |
Dec. 12 |
Company pays invoice for inventory purchased on December 3rd within discount terms. (perpetual method) |
|
11 |
Dec. 15 |
Sell 50 units of inventory to a customer on account with a sales discount of 4/10, n/30. (Perpetual method= 2 entries) |
|
12 |
Dec. 20 |
The customer who purchased product on December 15th pays the amount due (within discount period). |
|
13 |
Dec. 23 |
Receive cash in advance for 27 hours of services to be completed in the future. |
|
14 |
Dec. 25 |
Purchase an additional 250 units of inventory for cash. |
|
15 |
Dec. 31 |
Sell 200 units of inventory to a customer who signs a 6-month promissory note at 12% interest for the balance due. This note originated end of month so no interest would be accrued. (perpetual method = 2 entries) |
|
16 |
Dec. 31 |
Pay employee salaries, $5,000. |
|
17 |
Dec. 31 |
Pay cash dividends to shareholders of $0.05 per share. |
|
18 |
Dec. 31 |
Vehicle did not meet expectations sold back to dealership for $7,000. (Record depreciation at date of sale and then record sale). |
|
19 |
Dec. 31 |
Record the $2,600 installment payment on the $128,250 installment note borrowed on December 1st. The annual interest rate is 8%. |
In: Accounting
1.) What is Price Fixing in an Oligopoly Market? Why do Oligopoly firms engage in price fixing? Is price-fixing legal or illegal in the United States?
2.) What is Price Leadership? Is Price Leadership legal or Illegal in the United States for Oligopolies? Why do Oligopoly Firms engage in Price Leadership?
In: Economics
Compare price taker firms with price searcher firms in terms of marginal cost and marginal revenue. How would each type firm use those concepts in decision making?
In: Economics
Cove’s Cakes is a local bakery. Price and cost information
follows:
| Price per cake | $ | 14.61 | |
| Variable cost per cake | |||
| Ingredients | 2.15 | ||
| Direct labor | 1.01 | ||
| Overhead (box, etc.) | 0.16 | ||
| Fixed cost per month | $ | 3,274.10 | |
Required:
1. Calculate Cove’s new break-even point under each of the following independent scenarios:
a. Sales price increases by $1.60 per cake.
b. Fixed costs increase by $465 per month.
c. Variable costs decrease by $0.30 per cake.
d. Sales price decreases by $0.70 per cake.
2. Assume that Cove sold 310 cakes last month. Calculate the company’s degree of operating leverage.
3. Using the degree of operating leverage, calculate the change in profit caused by a 9 percent increase in sales revenue.
In: Accounting
Economics - Direct Price Discrimination, Indirect Price Discrimination
A manufacturer of microwaves has discovered that male shoppers have little value for microwaves and attribute almost no extra value to an auto-defrost feature. Female shoppers generally value microwaves more than men and attribute greater value to the auto-defrost feature. There is little additional cost to incorporating an auto defrost feature. Since men and women cannot be charged different prices for the same product, the manufacturer is considering introducing two different models. The manufacturer has determined that men value a simple microwave at $75 and one with auto-defrost at $90 while women value a simple microwave at $90 and one with auto defrost at $135.
A. If there is an equal number of men and women, what pricing strategy will yield the greatest revenue?
B. What if most of microwaves' shoppers are women?
In: Economics