Sales Volume Variable cost Fixed cost Inspect time / unit Product X $50,000 1000 $22,057 $10,207 10.8 minutes Product Y $150,000 2000 $56,829 $39,065 12 minutes 1.Calculate the total shadow cost of inspection time in $ / hour Note. The overall opportunity cost for a resource (S) is the maximum value of the Si's across all products that use the resource. Sis called the resource's shadow cost. price Variable cost Fixed cost Inspect time / unit Product Z 79 per unit 29 per unit $21,635 14.4 minutes 2. Calculate the breakeven volume for this new product, taking opportunity cost into account. Note.For each product, the shadow cost should be treated as a variable cost. Sx Ui is added to Ci (variable cost per unit). 3.This situation is an example of which type of product interaction? a. Supply complement b.Supply substitution |c.Demand complement d.Demand substitution

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Inspect time / unit
$10,207 10.8 minutes
Sales
Volume
Variable cost
Fixed cost
Product X
$50,000
1000
$22,057
Product Y
$150,000
2000
$56,829
$39,065 12 minutes
1.Calculate the total shadow cost of inspection time in $ / hour
Note. The overall opportunity cost for a resource (S) is the maximum value of the Si's across all
products that use the resource. Sis called the resource's shadow cost.
Inspect time / unit
$21,635 14.4 minutes
price
Variable cost
Fixed cost
Product Z
79 per unit 29 per unit
2. Calculate the breakeven volume for this new product, taking opportunity cost into account.
Note.For each product, the shadow cost should be treated as a variable cost. Sx Ui is added to Ci
(variable cost per unit).
3.This situation is an example of which type of product interaction?
a. Supply complement
b.Supply substitution
c.Demand complement
d.Demand substitution
Transcribed Image Text:Inspect time / unit $10,207 10.8 minutes Sales Volume Variable cost Fixed cost Product X $50,000 1000 $22,057 Product Y $150,000 2000 $56,829 $39,065 12 minutes 1.Calculate the total shadow cost of inspection time in $ / hour Note. The overall opportunity cost for a resource (S) is the maximum value of the Si's across all products that use the resource. Sis called the resource's shadow cost. Inspect time / unit $21,635 14.4 minutes price Variable cost Fixed cost Product Z 79 per unit 29 per unit 2. Calculate the breakeven volume for this new product, taking opportunity cost into account. Note.For each product, the shadow cost should be treated as a variable cost. Sx Ui is added to Ci (variable cost per unit). 3.This situation is an example of which type of product interaction? a. Supply complement b.Supply substitution c.Demand complement d.Demand substitution
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