[1st_itemBCD] *problem situation in the photo below* Required: In Problem 1, what is Merrilyn’s accounting costs---type and magnitude? In Problem 1, what is Merrilyn’s economic costs---type and magnitude? In Problem 1, how much would Merrilyn need in revenue to earn positive accounting profits? Positive economic profits?
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[1st_itemBCD] *problem situation in the photo below*
Required:
- In Problem 1, what is Merrilyn’s accounting costs---type and magnitude?
- In Problem 1, what is Merrilyn’s economic costs---type and magnitude?
- In Problem 1, how much would Merrilyn need in revenue to earn positive accounting profits? Positive economic profits?
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Solved in 2 steps
- A man is considering investing P500, 000 to open a semi-automatic auto-washing business in a city of 400, 000 population. The equipment can wash, on the average, 12 cars per hour, using two men to operate it andto do small amount of hand work. The man plans to hire two men, inaddition to himself, and operate the station on an 8-hour basis, 6 days perweek, 50 weeks per year. He will pay his employees P25. 00 per hour. Heexpects to charge P25. 00 for a car wash. Out-of-pocket miscellaneouscost would be P8, 500 per month.He would pay his employees for 2 weeks for vacations each year.Because of the length of his lease, he must write off his investment within 5years. His capital now is earning 15%, and he is employed at a steady jobthat pays P25, 000 per month. He desires a rate of return of at least 20% onhis investment. Would you recommend the investment?a) Use ROR methodb) Use Annual Worth methodc) Use present worth methodd) Use future worth methode) Solve for the payback period and the…Q/ Machine A has a fixed cost of $40000 per year and a variable cost of S60 per unit. Machine B has an unknown fixed cost, but with this process 200 units can be produced each month at a total variable cost of $2000, If the total costs of the two machines break even at a production rate of 2000 units per year, what is the fixed cost of machine B? Let FCB - fixed cost for B. Variable cost for B = 2000/200 = S10/unit Total costs are equal at 2000 units per year. Then, 40,000 + 60(2000 units) = FCB + 10(2000 units) FCB = $140,000 per yearYesha’s Flower Shop offers different kinds of flower like roses, daisy and sunflower. Upon checking the profit of each item, daisy is the lowest last year (2020). She is thinking of stop offering daisy or continue it. The daisy flower has a fixed cost of Php 45 and has the following variable costs shown below. Worker No. of Daisy Flower Variable Cost 0 0 0 1 90 12 2 200 24 3 260 36 4 300 48 5 330 60 Compute the Total cost and Marginal cost for each worker. Compute the Total Revenue for each worker if the price is 0.35. Compute the Profit for each worker. What should be Yesha’s decision based on your answers?
- A man is considering investing P500, 000 to open a semi-automatic auto-washingbusiness in a city of 400, 000 population. The equipment can wash, on the average, 12cars per hour, using two men to operate it and to do small amount of hand work. Theman plans to hire two men, in addition to himself, and operate the station on an 8-hourbasis, 6 days per week, 50 weeks per year. He will pay his employees P25. 00 per hour.He expects to charge P25. 00 for a car wash. Out-of-pocket miscellaneous cost wouldbe P8, 500 per month.He would pay his employees for 2 weeks for vacations each year. Because ofthe length of his lease, he must write off his investment within 5 years. His capital now isearning 15%, and he is employed at a steady job that pays P25, 000 per month. Hedesires a rate of return of at least 20% on his investment. Would you recommend theinvestment? a) Use ROR methodb) Use Annual Worth methodA man is considering investing P 500,000 to open a semi-automatic washing business in a city of 400,000 population. The equipment can wash on the average 12 cars per hour using two men to operate it and to do small amount of handwork. The man plans to hire two men in addition to himself and operate the station on an 8-hour basis, 6 days per week, 50 weeks per year. he will pay his employees P 25.00 per hour. He expects to charge P 25.00 for a car wash. Out of pocket miscellaneous cost would be P 8,500 per month. He would pay his employees for 2 weeks for vacations each year. Because of the length of his lease, he must write off his investment within 5 years. His capital now is earning 15% and he is employed at a steady job that pays P 25,000 per month. He desires a rate of return of at least 20% on his investment. Would you recommend the investment? Use ROR method and Annual Worth method.Panda Toys Inc. plans to sell one line of its panda toys for $ 20. The material cost per unit is $4 and unit labor cost is $6. The annual overhead fixed costs are $ 500,000 and the promotion and advertising cost is $100,000. If the unit labor cost is dropped to $ 5, what is the $BEP for the company? O $1,200.000 $1.000.000 O $1,050.000 O $1,300.000 O $1.090.920
- A trailer manufactor has multiple products designed to be towed by a pickup (Ford F-150, Toyota Tacoma, etc). The production of one of their products - the XL7 5x10 trailer - referred to as XL7510 here, has a fixed 9 cost of $62,308 and a variable cost per unit of XL7510 equal to 202 + - dollars, where is the total 10 number of XL7510s produced. Suppose further that the selling price of this product is 1118 The x-values of the break-even points are The maximum revenue is Form the profit function: P(x) = = The maximum profit is The price that will maximize profit is 1 - dollars per unit of XL7510. 10 dollars (round to the nearest cent) dollars (round to the nearest cent)Method Units of Labor Units of Capital 1 50 10 2 20 40 3 10 70 A small company that shovels sidewalks and driveways has 100 homes to service for the winter. It can use various combinations of labor and capital: lots of labor with hand shovels, less labor with snow blowers, and still less labor with a pickup truck that has a snowplow on front. A summary of the methods is listed above. If hiring labor cost $100/unit and a unit of capital costs $400, what production method should be used? If labor cost increases to $200/unit what method should be chosen? You must show your calculations.When Molly Lai purchased the Clean Clothes Corner Laundry, she thought that she would automaticallygenerate good business if she improved the laundry’s physical appearance because it was in a good locationnear several high-income neighborhoods. Thus, she initially invested a lot of her cash reserves in remodelingthe exterior and interior of the laundry. However, she just about broke even in the year following her laundryacquisition, which she didn’t feel was a sufficient return, given how hard she had worked. Molly didn’t realizethat the dry-cleaning business is very competitive. Success is based more on price and quality service, includingquick service, than on the laundry’s appearance.To improve her service, Molly is considering purchasing new dry-cleaning equipment, including a pressingmachine that could substantially increase the speed at which she can dry-clean clothes and improve theirappearance. The new machinery costs ₱16,200 installed and can clean 40 clothes items per hour…
- 3. A civil engineer has invented a walling material that sells for P1,500/unit. The Fixed Cost of his company is P210,000.00 while the variable cost is P800.00/unit. a) What is the average number of units to be sold for the engineer to break even? Also show a graph. b) If the Variable Cost and Fixed Cost are decreased by 10% and 20% respectively, how much is the "NEW BREAK EVEN" in terms of PESOS?When Molly Lai purchased the Clean Clothes Corner Laundry, she thought that she would automaticallygenerate good business if she improved the laundry’s physical appearance because it was in a good locationnear several high-income neighborhoods. Thus, she initially invested a lot of her cash reserves in remodelingthe exterior and interior of the laundry. However, she just about broke even in the year following her laundryacquisition, which she didn’t feel was a sufficient return, given how hard she had worked. Molly didn’t realizethat the dry-cleaning business is very competitive. Success is based more on price and quality service, includingquick service, than on the laundry’s appearance.To improve her service, Molly is considering purchasing new dry-cleaning equipment, including a pressingmachine that could substantially increase the speed at which she can dry-clean clothes and improve theirappearance. The new machinery costs ₱16,200 installed and can clean 40 clothes items per hour…A furniture manufacturer has an annual overhead cost of P120,000 plus 20% of the sales in pesos. Labor costs P20 per set and the materials cost P10. He has a maximum capacity of 1000 sets per month but expects to produce only 8000 sets per year. If he could sell all what he expects to produce, how much is the selling price of each set just to break even? Show solutions.