3Select the incorrect statement regarding the relationship between costbehavior and revenue.In a pure fixed cost structure, the unit selling price and unit contribution margin areequal.O A pure fixed cost structure offers higher potential rewards.In a pure variable cost structure, operating leverage is 1 (one).A pure variable cost structure offers more security if volume expectations are notachieved.O In a pure variable cost structure, when revenue increases by $1, so do profits.DE

Pure Variable Cost Structure - No fixed costs Pure Fixed Cost Structure - No variable Cost

Select the incorrect statement regarding the relationship between cost behavior and revenue. In a pure fixed cost structure, the unit selling price and unit contribution margin are equal. O A pure fixed cost structure offers higher potential rewards. O In a pure variable cost structure, operating leverage is 1 (one). A pure variable cost structure offers more security if volume expectations are not achieved. O In a pure variable cost structure, when revenue increases by $1, so do profits.

Select the incorrect statement regarding the relationship between cost behavior and revenue. In a pure fixed cost structure, the unit selling price and unit contribution margin are equal. O A pure fixed cost structure offers higher potential rewards. O In a pure variable cost structure, operating leverage is 1 (one). A pure variable cost structure offers more security if volume expectations are not achieved. O In a pure variable cost structure, when revenue increases by $1, so do profits.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Complete the sentences to illustrate how economists and accountants view profit differently. Economic profit is O typically lower than accounting profit. always zero. O typically higher than accounting profit. Economic costs and accounting costs differ because accountants include only explicit costs. neither explicit nor implicit costs. both explicit and implicit costs. O only implicit costs. 46°F
Purchases Quantity Price Quantity x Price Purchase 1 100 $10 $1,000 Purchase 2 200 $11 $2,200 Purchase 3 100 $12 $1,200 Purchase 4 300 $14 $4,200 TOTAL 700 $8,600 Sales Quantity 150 Sale 1 Using the above information, which inventory valuation method results in the largest gross profit? Assume that the inventory balance before the first purchase was zero. Select one: O a. FIFO O b. Average cost O c. Periodic Inventory о d. None of the available choices
kk.2
7 8 Part 3: Economic Ordering Quantity 9 1. Calculate the company's EOQ for Engine Valve A1100 (make sure to link values to the other tabs): 10 11 Estimated Annual Sales this year: 12 Ordering cost for each order: 13 Carrying Cost per unit 14 15 EOQ: 16 units units 17 2. Complete the table below by linking to the appropriate cells in the other tabs: 18 19 Order Size Total Total Carrying Cost Ordering Cost 24 20 21 28 29 30 22222222223 25 26 5 10 20 50 100 27 3. Create a graph of both the Carrying and Ordering cost. Make sure your EOQ ties to where the two lines cross. Rename your Chart to: Cost of Ordering & Carrying Inventory L
Token price increases from $1.25 to $2.50: Ridership now declines to 25 % equivalent to 10 M less riders.......Assume costs (accounting) increase to $ 55 M and economic costs increase to $ 65 M; Supply increases by + 10%; * What is your revised "PED" & "PES"?; * What are your new profit & loss values based on evaluation of both accounting & economic costs ? Are you better or worse off ? * What could happen if your analysis was extended from one (1) month to six (6) months ? * What could happen if your market's (audience) average income increases or decreases by + / - 15 % given the change in the token cost from $1.25 to $2.50 ? * Would your "PED" and "PES" and profit / loss values change as well ?
Kindly assist on question 1 and 2 1The difference between zero accounting profit and zero economic profit is that. a) an economic profit of zero indicates a fair return because it includes the opportunity cost of a firms capital. b) an economic profit zero indicates unacceptable rate of return because it does not include the opportunity cost of a firms capital. c) an economic profit of zero indicates more than a fair return because it includes opportunity cost and explicit cost. d) an accounting profit of zero indicates a fair rate of return because it includes the opportunity cost of a firms capital. 2.If a corporation is sued and losses the lawsuit, it's liability to pay. a) is imposed on all stockholders, personally b) is imposed only on the corporate CEO and the board of directors. C) its limited to the assets held in the corporations name. d) is imposed on the bondholders of the corporation
Q46 Why do we refer to the long-run average cost curve as a "boundary"? a. The points below the curve represent cost levels that are unattainable given current technology and factor prices. b. The points above the curve represent cost levels attainable to the firm only with adjustment of all factor prices. c. The points above the curve represent costs that are unattainable given current technology and factor prices. d. None of the other options are correct. e. The points on the curve represent a boundary between fixed factor prices and variable factor prices. Clear my choice
Explicit Costs = Worker wages + pets and supplies to sell + annual rent Explicit Costs = 92,000 = 35,000 + 42,000 + 15,000 Implicit Costs = Foregone interest income + foregone wages + foregone entrep. Income Implicit Costs = 47,000 = 7,000 + 32,000 + 8,000 Accounting Profit = Total Revenue – Total Explicit Costs Accounting Profit = 45,000 = 137,000 – 92,000 Economic Profit = Total Revenue – (Total Explicit Cost + Total Implicit Cost) Economic Profit (Loss) = (2,000) = 137,000 – (92,000 + 47,000) With the information above, if this business operates in either a purely competitive or monopolistically competitive market, where firms can easily enter and exit the market, what would we expect to occur in the market and to this business in the long run.
9