question‚ • available information-gathering technology‚ • design of operations 2-5 A variable cost changes in total in proportion to changes in the related level of total activity or volume. An example is a sales commission that is a percentage of each sales revenue dollar. A fixed cost remains unchanged in total for a given time period‚ despite wide changes in the related level of total activity or volume. An example is the leasing cost of a machine that is unchanged for a given time period (such
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Atlantic City‚ New Jersey‚ where he hoped to stay at one of his favorite Harrah’s resorts and enjoy some gaming and entertainment. Unfortunately for Joseph‚ he picked a weekend when all the hotels were booked solid. But after swiping his Harrah’s Total Rewards card to play the tables‚ the pit boss came by and directed him to the front desk. He was told that a room had become available‚ and he could stay in it for a reduced rate of $100 a night. When he checked out two nights later‚ Joseph was told
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Assume that the firm maximizes profits. What is the level of production‚ price‚ and total profit per week? Ans1. Level of optimal production is obtained by setting Marginal Revenue equal to Marginal Cost. If Demand function is Linear then‚ P=a-bq Revenue is R (Q)=P(Q)Q and Marginal Revenue (MR)=a-2bq Here‚ a=120 and b=0.02 Therefore‚ MR=120 – 2(0.02) Q =120-.04Q Total Cost C =60q+25000 so Marginal Cost (MC)=60 Setting MR = MC 120-.04Q =60 Q= 60/
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meal 4. Total variable cost for the lowest time period is calculated by multiplying the service volume by the variable cost per meal. The same calculation is used to determine the total variable cost for the highest time period as well. • Low month total variable cost: $13‚755 • High month total variable cost: $19‚257 5. The total fixed costs for the lowest month is calculated by subtracting the total costs of the lowest month‚ or the highest month‚ from the total variable costs. • Total fixed
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FINANCIAL MANAGEMENT MIDTERM PAPER EXECUTIVE SUMMARY 3 QUESTIONS 4 CONCLUSION 8 EXHIBIT-1 9 EXHIBIT -2 10 EXECUTIVE SUMMARY Lille Tissages is located in Lille‚ France and it is the largest textile company in the region. The department whose financial management is under scrutiny in this case study sells only Item 345. The price for Item 345 was raised from FF15 to FF20 in 2002‚ which resulted in decrease in market share of Lille Tissages for item 345. The company is facing
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ACC 206 Week Three Assignment Please complete the following five exercises below in either Excel or a word document (but must be single document). You must show your work where appropriate (leaving the calculations within Excel cells is acceptable). Save the document‚ and submit it in the appropriate week using the Assignment Submission button. 1. Overhead application: Working backward The Towson Manufacturing Corporation applies overhead on the basis of machine hours. The following divisional
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this period. Based on the information given‚ we have the following contribution income statement for Pediatrics. To calculate the variable cost per patient per day‚ we first find the ratio to sales based on the total Revenues and total Variable costs. So variable cost (VC) per patient per day = $300 x 0.333 = $100 Break Even Analysis for Question a To calculate the minimum number of patient-days for pediatrics to break even‚ for the year ending June 30‚
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revenue is the change in total revenue from the sale of one or more units of a particular item. There is a principal that explains the relationship between the two best called the MR=MC rule‚ which states “that a firm will maximize its profit (or minimize its losses) by producing the output at which marginal revenue and marginal cost are equal‚ provided product price is equal to or greater than average variable cost” (McConnell‚ 2012). Marginal revenue is the change in total revenue related to one
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Anon. 2011. Mixed Cost or Semi-variable cost. [online]. Available from the World Wide Web: URL : http://www.accountingformanagement.com/mixed_costs.htm. [Accessed 03/08/11] Anon. 2011. TOTAL FIXED COST CURVE. [online]. Available from the World Wide Web: URL : http://www.amosweb.com/cgi-bin/awb_nav.pl?s=wpd&c=dsp&k=total+fixed+cost+curve. [Accessed 03/08/11]. Anon. 2009. Indirect cost. [online]. Available from the World Wide Web: URL : http://financial-dictionary.thefreedictionary.com/Indirect+Cost.
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example explains this fact: Total Fixed Cost | $30‚000 | $30‚000 | $30‚000 | ÷ Units Produced | 5‚000 | 10‚000 | 15‚000 | Fixed Cost per Unit | $6.00 | $3.00 | $2.00 | Variable Costs: Variable costs change in direct proportion to the level of production. This means that total variable cost increase when more units are produced and decreases when less units are produced. Although variable in total‚ these costs are constant per unit. For example Total Variable Cost | $10‚000 | $20‚000
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