Homework Answers
Profit at Original price:
= [1,000 X ($75 - $30)] - $25,000
= $20,000
Profit at Reduces price:
= {1,300 X [($75 - 10%) - $30]} - $25,000
= $23,750
Profit increased from $20,000 to $23,750
YES, because profit will incby $3,750
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Question 3: Pricing decisions Total fixed costs are $25,000. Unit variable cost is $30. At current...
Question 3: Pricing decisions Total fixed costs are $15,000. Unit variable cost is $10. At current...
Question 3: Pricing decisions Total fixed costs are $15,000. Unit variable cost is $10. At current selling price of $25, you sell 1,000 units per month. If you reduce the price by 10%, sale volume will increase to 1,300 units. Compute profit at the original price: Compute profit at the reduced price: Should you reduce the price? YES, because profit will increase by $1,250 YES, because revenue will increase by $4,250 NO, because a lower price always reduces profit
Total fixed costs are $10,000. Unit variable cost is $30. At current selling price of $75,...
Total fixed costs are $10,000. Unit variable cost is $30. At current selling price of $75, you sell 1,000 units per month. If you reduce the price by 10%, sale volume will increase to 1,300 units. Compute profit at the original price: Compute profit at the reduced price: Should you reduce the price? -NO, because a lower price always reduces profit -YES, because revenue will increase by $12,750 -YES, because profit will increase by $3,750
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MANAGERIAL ACCOUNTING PROBLEMS
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UPVOTE
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==================
MANAGERIAL ACCOUNTING PROBLEMS
Please answer ALL IN DETAILS to get
UPVOTE
Thanks
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