Answer: Degree of Operating Leverage
A Tech = 2.75
Z Tech = 3
Explanation:
As defined in question itself,
Degree of Operating Leverage =
As here, it is provided that profit for both the companies are same amounting $4 million.
Although the fixed cost differ by $1 million.
A Tech Degree of operating Leverage = 1 + = 2.75
Z Tech Degree of Operating Leverage = 1 + = 3
This clearly demonstrates that A Tech will reach its break even faster than the Z Tech as the ratio of fixed cost to variable cost is lower in A tech in comparison to Z Tech.
Answer:
B. It depends on the marginal cost of serving more clients and the marginal revenue he will earn from serving more clients.
Explanation:
As the barber is currently cutting hair for 50 clients per week and earns a profit. He is now considering expanding his operation in order to serve more clients. He should expand his business by considering the marginal cost of serving more clients and the marginal revenue he will earn from serving more clients. Marginal revenue and marginal cost has much importance here in order to make the decision. Marginal revenue is the profit which is obtained by selling one extra unit, here serving one more additional customer, whereas, the marginal cost is selling that one extra or additional unit/serving the customer. In this particular case, if the marginal revenues are greater than the marginal costs then he should definitely expand his operations, which means that move will bring more profits to his business.
Answer:
Explanation:
(A) First Degree Price Discrimination
(B) it is regarded as a form of price discrimination because the current price at which Datsun models are sold, differs from the former price (the current price is half the original or former price).
Also, this is a deliberate action or business strategy taken by the Nissan automobile company so it is price discrimination.
(C) Nissan might choose this approach because (according to the question) there are emerging markets and the Datsun model of Nissan motors will soon go obsolete.
So since the first aim of a company is to make profit, instead of losing buyers of the old model completely, Nissan will sell the off at much lower prices.
(D) Yes, it will a success move if the company does not presently have the technology to adapt to the new or emerging market for different type or function of vehicles.
Answer:
At one time, the centrally planned economy of China encouraged farmers to produce iron in their backyards, rather than have factories make iron. This proved unsuccessful, since most of the farmers' iron was of poor quality. Why do you think this approach was unsuccessful? How could this experiment become a success in a free market economy?
The reason why the approach whereby farmers make iron in their backyard could not work out is as a result of not being inclined in that market as they are only skilled in agriculture, also they do not understand the rhetorics of the business.
The experiment would be a success in a free market as anyone is allowed to sell such product, this gives room for competition and helps to price reduction which is good for the consumers, also it would help in improvement of such product's quality because of competition involved
Explanation:
Answer:
d) $530,000
Explanation:
The computation of the total manufacturing cost for the march month is shown below
= Fixed manufacturing cost + (produced tons × variable manufacturing cost per ton)
= $50,000 + (40,000 Tons × $12.00 per ton)
= $50,000 + $480,000
= $530,000
hence, the total manufacturing cost for the march month is $530,000
Therefore the correct option is d.