The monthly volume at each location. Introduction: Location is where a firm chooses to site its operations. Location decisions can large effects on expenses and incomes. Location choices are normally quite imperative to both substantial and private companies. The area choice directly affects an operation's expenses and also its capacity to serve clients.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 8, Problem 2P

a)

Summary Introduction

To determine: The monthly volume at each location.

Introduction: Location is where a firm chooses to site its operations. Location decisions can large effects on expenses and incomes. Location choices are normally quite imperative to both substantial and private companies. The area choice directly affects an operation's expenses and also its capacity to serve clients.

a)

Expert Solution

Answer to Problem 2P

The monthly volume of location A is 16,853.93 units, location B is 17,415.73 units and location C is 17,752.81 units.

Explanation of Solution

Given Information:

It is given that the labor and material costs are $1.76 per sandwich, the cost of sandwich is $2.65. The rent and equipment cost for Location A is$5,000, Location B is $5,500 and Location C is $5,800. The realized monthly profit is $10,000

Calculate the monthly volume at each location

It is calculated by adding realized profit with fixed costs and dividing the result with rate per unit subtracted by variable costs.

Monthly Volume(Q)LocationA=[(Realized Profit+Fixed Costs)(Rate per unit−Variable Costs)]=[($10,000+$5,000)($2.65−$1.76)]=[$15,000$0.89]=16,853.93 units

Monthly Volume(Q)LocationB=[(Realized Profit+Fixed Costs)(Rate per unit−Variable Costs)]=[($10,000+$5,500)($2.65−$1.76)]=[$15,500$0.89]=17,415.73 units

Monthly Volume(Q)LocationC=[(Realized Profit+Fixed Costs)(Rate per unit−Variable Costs)]=[($10,000+$5,800)($2.65−$1.76)]=[$15,800$0.89]=17,752.81 units

Hence, the monthly volume of location A is 16,853.93 units, location B is 17,415.73 units and location C is 17,752.81 units.

b)

Summary Introduction

To determine: The location that yield with greatest profits.

Introduction: Location is where a firm chooses to site its operations. Location decisions can large effects on expenses and incomes. Location choices are normally quite imperative to both substantial and private companies. The area choice directly affects an operation's expenses and also its capacity to serve clients.

b)

Expert Solution

Answer to Problem 2P

“Location C” yields greatest profits.

Explanation of Solution

Given Information:

It is given that the labor and material costs are $1.76 per sandwich, the cost of sandwich is $2.65. The rent and equipment cost for Location A is $5,000, Location B is $5,500 and Location C is $5,800. The expected sales for Location A are $21,000, Location B is $22,000 and Location C is $23,000.

Calculate the location that yield with greatest profits.

It is calculated by subtracting the rate per unit with variable costs and multiplying the result with expected sales and subtracting the whole with the fixed costs.

Expected ProfitLocation A=[(Expected Sales×(Rate per unit−Variable Cost))−Fixed Costs]=[($21,000×($2.65−$1.76))−$5,000]=[($21,000×$0.89)−$5,000]=[$18,690−$5,000]

=$13,690

Expected ProfitLocation B=[(Expected Sales×(Rate per unit−Variable Cost))−Fixed Costs]=[($22,000×($2.65−$1.76))−$5,500]=[($22,000×$0.89)−$5,500]=[$19,580−$5,500]

=$14,080

Expected ProfitLocation C=[(Expected Sales×(Rate per unit−Variable Cost))−Fixed Costs]=[($23,000×($2.65−$1.76))−$5,800]=[($23,000×$0.89)−$5,800]=[$20,470−$5,800]

=$14,670

Hence, location C yields greatest profits.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Main Challenges at TechInnovateStrategic DirectionTechInnovate's board of directors is pushing for a more aggressive expansion into emerging markets, particularly in Africaand Southeast Asia. However, there's internal disagreement about whether to focus on these new markets or consolidatetheir position in existing ones. Sarah Chen favors rapid expansion, while some senior executives advocate for a morecautious approach.Ethical ConcernsThe company's AI algorithms have come under scrutiny for potential biases, particularly in facial recognition technology.There are concerns that these biases disproportionately affect minority groups. Some employees have voiced ethicalconcerns about selling this technology to law enforcement agencies without addressing these issues.Team Leadership and DiversityTechInnovate's leadership team is predominantly male and Western, despite its global presence. There's growing pressurefrom employees and some board members to diversify the leadership team to…

Sarah Anderson, the Marketing Manager at Exeter Township's Cultural Center, is conducting research on the attendance history for cultural events in the area over the past ten years. The following data has been collected on the number of attendees who registered for events at the cultural center. Year Number of Attendees 1 700 2 248 3 633 4 458 5 1410 6 1588 7 1629 8 1301 9 1455 10 1989 You have been hired as a consultant to assist in implementing a forecasting system that utilizes various forecasting techniques to predict attendance for Year 11. a) Calculate the Three-Period Simple Moving Average b) Calculate the Three-Period Weighted Moving Average (weights: 50%, 30%, and 20%; use 50% for the most recent period, 30% for the next most recent, and 20% for the oldest) c) Apply Exponential Smoothing with the smoothing constant alpha = 0.2. d) Perform a Simple Linear Regression analysis and provide the adjusted…

Ruby-Star Incorporated is considering two different vendors for one of its top-selling products which has an average weekly demand of 70 units and is valued at $90 per unit. Inbound shipments from vendor 1 will average 390 units with an average lead time (including ordering delays and transit time) of 4 weeks. Inbound shipments from vendor 2 will average 490 units with an average lead time of 2 weeksweeks. Ruby-Star operates 52 weeks per year; it carries a 4-week supply of inventory as safety stock and no anticipation inventory. Part 2 a. The average aggregate inventory value of the product if Ruby-Star used vendor 1 exclusively is $enter your response here.

Answer 2

Question

Chapter 8, Problem 2P

a)

Summary Introduction

To determine: The monthly volume at each location.

Introduction: Location is where a firm chooses to site its operations. Location decisions can large effects on expenses and incomes. Location choices are normally quite imperative to both substantial and private companies. The area choice directly affects an operation's expenses and also its capacity to serve clients.

a)

Expert Solution

Answer to Problem 2P

The monthly volume of location A is 16,853.93 units, location B is 17,415.73 units and location C is 17,752.81 units.

Explanation of Solution

Given Information:

It is given that the labor and material costs are $1.76 per sandwich, the cost of sandwich is $2.65. The rent and equipment cost for Location A is$5,000, Location B is $5,500 and Location C is $5,800. The realized monthly profit is $10,000

Calculate the monthly volume at each location

It is calculated by adding realized profit with fixed costs and dividing the result with rate per unit subtracted by variable costs.

Monthly Volume(Q)LocationA=[(Realized Profit+Fixed Costs)(Rate per unit−Variable Costs)]=[($10,000+$5,000)($2.65−$1.76)]=[$15,000$0.89]=16,853.93 units

Monthly Volume(Q)LocationB=[(Realized Profit+Fixed Costs)(Rate per unit−Variable Costs)]=[($10,000+$5,500)($2.65−$1.76)]=[$15,500$0.89]=17,415.73 units

Monthly Volume(Q)LocationC=[(Realized Profit+Fixed Costs)(Rate per unit−Variable Costs)]=[($10,000+$5,800)($2.65−$1.76)]=[$15,800$0.89]=17,752.81 units

Hence, the monthly volume of location A is 16,853.93 units, location B is 17,415.73 units and location C is 17,752.81 units.

b)

Summary Introduction

To determine: The location that yield with greatest profits.

Introduction: Location is where a firm chooses to site its operations. Location decisions can large effects on expenses and incomes. Location choices are normally quite imperative to both substantial and private companies. The area choice directly affects an operation's expenses and also its capacity to serve clients.

b)

Expert Solution

Answer to Problem 2P

“Location C” yields greatest profits.

Explanation of Solution

Given Information:

It is given that the labor and material costs are $1.76 per sandwich, the cost of sandwich is $2.65. The rent and equipment cost for Location A is $5,000, Location B is $5,500 and Location C is $5,800. The expected sales for Location A are $21,000, Location B is $22,000 and Location C is $23,000.

Calculate the location that yield with greatest profits.

It is calculated by subtracting the rate per unit with variable costs and multiplying the result with expected sales and subtracting the whole with the fixed costs.

Expected ProfitLocation A=[(Expected Sales×(Rate per unit−Variable Cost))−Fixed Costs]=[($21,000×($2.65−$1.76))−$5,000]=[($21,000×$0.89)−$5,000]=[$18,690−$5,000]

=$13,690

Expected ProfitLocation B=[(Expected Sales×(Rate per unit−Variable Cost))−Fixed Costs]=[($22,000×($2.65−$1.76))−$5,500]=[($22,000×$0.89)−$5,500]=[$19,580−$5,500]

=$14,080

Expected ProfitLocation C=[(Expected Sales×(Rate per unit−Variable Cost))−Fixed Costs]=[($23,000×($2.65−$1.76))−$5,800]=[($23,000×$0.89)−$5,800]=[$20,470−$5,800]

=$14,670

Hence, location C yields greatest profits.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 8, Problem 2P

a)

Summary Introduction

To determine: The monthly volume at each location.

Introduction: Location is where a firm chooses to site its operations. Location decisions can large effects on expenses and incomes. Location choices are normally quite imperative to both substantial and private companies. The area choice directly affects an operation's expenses and also its capacity to serve clients.

a)

Expert Solution

Answer to Problem 2P

The monthly volume of location A is 16,853.93 units, location B is 17,415.73 units and location C is 17,752.81 units.

Explanation of Solution

Given Information:

It is given that the labor and material costs are $1.76 per sandwich, the cost of sandwich is $2.65. The rent and equipment cost for Location A is$5,000, Location B is $5,500 and Location C is $5,800. The realized monthly profit is $10,000

Calculate the monthly volume at each location

It is calculated by adding realized profit with fixed costs and dividing the result with rate per unit subtracted by variable costs.

Monthly Volume(Q)LocationA=[(Realized Profit+Fixed Costs)(Rate per unit−Variable Costs)]=[($10,000+$5,000)($2.65−$1.76)]=[$15,000$0.89]=16,853.93 units

Monthly Volume(Q)LocationB=[(Realized Profit+Fixed Costs)(Rate per unit−Variable Costs)]=[($10,000+$5,500)($2.65−$1.76)]=[$15,500$0.89]=17,415.73 units

Monthly Volume(Q)LocationC=[(Realized Profit+Fixed Costs)(Rate per unit−Variable Costs)]=[($10,000+$5,800)($2.65−$1.76)]=[$15,800$0.89]=17,752.81 units

Hence, the monthly volume of location A is 16,853.93 units, location B is 17,415.73 units and location C is 17,752.81 units.

b)

Summary Introduction

To determine: The location that yield with greatest profits.

Introduction: Location is where a firm chooses to site its operations. Location decisions can large effects on expenses and incomes. Location choices are normally quite imperative to both substantial and private companies. The area choice directly affects an operation's expenses and also its capacity to serve clients.

b)

Expert Solution

Answer to Problem 2P

“Location C” yields greatest profits.

Explanation of Solution

Given Information:

It is given that the labor and material costs are $1.76 per sandwich, the cost of sandwich is $2.65. The rent and equipment cost for Location A is $5,000, Location B is $5,500 and Location C is $5,800. The expected sales for Location A are $21,000, Location B is $22,000 and Location C is $23,000.

Calculate the location that yield with greatest profits.

It is calculated by subtracting the rate per unit with variable costs and multiplying the result with expected sales and subtracting the whole with the fixed costs.

Expected ProfitLocation A=[(Expected Sales×(Rate per unit−Variable Cost))−Fixed Costs]=[($21,000×($2.65−$1.76))−$5,000]=[($21,000×$0.89)−$5,000]=[$18,690−$5,000]

=$13,690

Expected ProfitLocation B=[(Expected Sales×(Rate per unit−Variable Cost))−Fixed Costs]=[($22,000×($2.65−$1.76))−$5,500]=[($22,000×$0.89)−$5,500]=[$19,580−$5,500]

=$14,080

Expected ProfitLocation C=[(Expected Sales×(Rate per unit−Variable Cost))−Fixed Costs]=[($23,000×($2.65−$1.76))−$5,800]=[($23,000×$0.89)−$5,800]=[$20,470−$5,800]

=$14,670

Hence, location C yields greatest profits.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 8, Problem 2P

a)

Summary Introduction

To determine: The monthly volume at each location.

Introduction: Location is where a firm chooses to site its operations. Location decisions can large effects on expenses and incomes. Location choices are normally quite imperative to both substantial and private companies. The area choice directly affects an operation's expenses and also its capacity to serve clients.

a)

Expert Solution

Answer to Problem 2P

The monthly volume of location A is 16,853.93 units, location B is 17,415.73 units and location C is 17,752.81 units.

Explanation of Solution

Given Information:

It is given that the labor and material costs are $1.76 per sandwich, the cost of sandwich is $2.65. The rent and equipment cost for Location A is$5,000, Location B is $5,500 and Location C is $5,800. The realized monthly profit is $10,000

Calculate the monthly volume at each location

It is calculated by adding realized profit with fixed costs and dividing the result with rate per unit subtracted by variable costs.

Monthly Volume(Q)LocationA=[(Realized Profit+Fixed Costs)(Rate per unit−Variable Costs)]=[($10,000+$5,000)($2.65−$1.76)]=[$15,000$0.89]=16,853.93 units

Monthly Volume(Q)LocationB=[(Realized Profit+Fixed Costs)(Rate per unit−Variable Costs)]=[($10,000+$5,500)($2.65−$1.76)]=[$15,500$0.89]=17,415.73 units

Monthly Volume(Q)LocationC=[(Realized Profit+Fixed Costs)(Rate per unit−Variable Costs)]=[($10,000+$5,800)($2.65−$1.76)]=[$15,800$0.89]=17,752.81 units

Hence, the monthly volume of location A is 16,853.93 units, location B is 17,415.73 units and location C is 17,752.81 units.

b)

Summary Introduction

To determine: The location that yield with greatest profits.

Introduction: Location is where a firm chooses to site its operations. Location decisions can large effects on expenses and incomes. Location choices are normally quite imperative to both substantial and private companies. The area choice directly affects an operation's expenses and also its capacity to serve clients.

b)

Expert Solution

Answer to Problem 2P

“Location C” yields greatest profits.

Explanation of Solution

Given Information:

It is given that the labor and material costs are $1.76 per sandwich, the cost of sandwich is $2.65. The rent and equipment cost for Location A is $5,000, Location B is $5,500 and Location C is $5,800. The expected sales for Location A are $21,000, Location B is $22,000 and Location C is $23,000.

Calculate the location that yield with greatest profits.

It is calculated by subtracting the rate per unit with variable costs and multiplying the result with expected sales and subtracting the whole with the fixed costs.

Expected ProfitLocation A=[(Expected Sales×(Rate per unit−Variable Cost))−Fixed Costs]=[($21,000×($2.65−$1.76))−$5,000]=[($21,000×$0.89)−$5,000]=[$18,690−$5,000]

=$13,690

Expected ProfitLocation B=[(Expected Sales×(Rate per unit−Variable Cost))−Fixed Costs]=[($22,000×($2.65−$1.76))−$5,500]=[($22,000×$0.89)−$5,500]=[$19,580−$5,500]

=$14,080

Expected ProfitLocation C=[(Expected Sales×(Rate per unit−Variable Cost))−Fixed Costs]=[($23,000×($2.65−$1.76))−$5,800]=[($23,000×$0.89)−$5,800]=[$20,470−$5,800]

=$14,670

Hence, location C yields greatest profits.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 8, Problem 2P

a)

Summary Introduction

To determine: The monthly volume at each location.

Introduction: Location is where a firm chooses to site its operations. Location decisions can large effects on expenses and incomes. Location choices are normally quite imperative to both substantial and private companies. The area choice directly affects an operation's expenses and also its capacity to serve clients.

a)

Expert Solution

Answer to Problem 2P

The monthly volume of location A is 16,853.93 units, location B is 17,415.73 units and location C is 17,752.81 units.

Explanation of Solution

Given Information:

It is given that the labor and material costs are $1.76 per sandwich, the cost of sandwich is $2.65. The rent and equipment cost for Location A is$5,000, Location B is $5,500 and Location C is $5,800. The realized monthly profit is $10,000

Calculate the monthly volume at each location

It is calculated by adding realized profit with fixed costs and dividing the result with rate per unit subtracted by variable costs.

Monthly Volume(Q)LocationA=[(Realized Profit+Fixed Costs)(Rate per unit−Variable Costs)]=[($10,000+$5,000)($2.65−$1.76)]=[$15,000$0.89]=16,853.93 units

Monthly Volume(Q)LocationB=[(Realized Profit+Fixed Costs)(Rate per unit−Variable Costs)]=[($10,000+$5,500)($2.65−$1.76)]=[$15,500$0.89]=17,415.73 units

Monthly Volume(Q)LocationC=[(Realized Profit+Fixed Costs)(Rate per unit−Variable Costs)]=[($10,000+$5,800)($2.65−$1.76)]=[$15,800$0.89]=17,752.81 units

Hence, the monthly volume of location A is 16,853.93 units, location B is 17,415.73 units and location C is 17,752.81 units.

b)

Summary Introduction

To determine: The location that yield with greatest profits.

Introduction: Location is where a firm chooses to site its operations. Location decisions can large effects on expenses and incomes. Location choices are normally quite imperative to both substantial and private companies. The area choice directly affects an operation's expenses and also its capacity to serve clients.

b)

Expert Solution

Answer to Problem 2P

“Location C” yields greatest profits.

Explanation of Solution

Given Information:

It is given that the labor and material costs are $1.76 per sandwich, the cost of sandwich is $2.65. The rent and equipment cost for Location A is $5,000, Location B is $5,500 and Location C is $5,800. The expected sales for Location A are $21,000, Location B is $22,000 and Location C is $23,000.

Calculate the location that yield with greatest profits.

It is calculated by subtracting the rate per unit with variable costs and multiplying the result with expected sales and subtracting the whole with the fixed costs.

Expected ProfitLocation A=[(Expected Sales×(Rate per unit−Variable Cost))−Fixed Costs]=[($21,000×($2.65−$1.76))−$5,000]=[($21,000×$0.89)−$5,000]=[$18,690−$5,000]

=$13,690

Expected ProfitLocation B=[(Expected Sales×(Rate per unit−Variable Cost))−Fixed Costs]=[($22,000×($2.65−$1.76))−$5,500]=[($22,000×$0.89)−$5,500]=[$19,580−$5,500]

=$14,080

Expected ProfitLocation C=[(Expected Sales×(Rate per unit−Variable Cost))−Fixed Costs]=[($23,000×($2.65−$1.76))−$5,800]=[($23,000×$0.89)−$5,800]=[$20,470−$5,800]

=$14,670

Hence, location C yields greatest profits.

Answer 6

Chapter 8, Problem 2P

a)

Summary Introduction

To determine: The monthly volume at each location.

Introduction: Location is where a firm chooses to site its operations. Location decisions can large effects on expenses and incomes. Location choices are normally quite imperative to both substantial and private companies. The area choice directly affects an operation's expenses and also its capacity to serve clients.

a)

Expert Solution

Answer to Problem 2P

The monthly volume of location A is 16,853.93 units, location B is 17,415.73 units and location C is 17,752.81 units.

Explanation of Solution

Given Information:

It is given that the labor and material costs are $1.76 per sandwich, the cost of sandwich is $2.65. The rent and equipment cost for Location A is$5,000, Location B is $5,500 and Location C is $5,800. The realized monthly profit is $10,000

Calculate the monthly volume at each location

It is calculated by adding realized profit with fixed costs and dividing the result with rate per unit subtracted by variable costs.

Monthly Volume(Q)LocationA=[(Realized Profit+Fixed Costs)(Rate per unit−Variable Costs)]=[($10,000+$5,000)($2.65−$1.76)]=[$15,000$0.89]=16,853.93 units

Monthly Volume(Q)LocationB=[(Realized Profit+Fixed Costs)(Rate per unit−Variable Costs)]=[($10,000+$5,500)($2.65−$1.76)]=[$15,500$0.89]=17,415.73 units

Monthly Volume(Q)LocationC=[(Realized Profit+Fixed Costs)(Rate per unit−Variable Costs)]=[($10,000+$5,800)($2.65−$1.76)]=[$15,800$0.89]=17,752.81 units

Hence, the monthly volume of location A is 16,853.93 units, location B is 17,415.73 units and location C is 17,752.81 units.

Answer 7

Chapter 8, Problem 2P

a)

Summary Introduction

To determine: The monthly volume at each location.

Introduction: Location is where a firm chooses to site its operations. Location decisions can large effects on expenses and incomes. Location choices are normally quite imperative to both substantial and private companies. The area choice directly affects an operation's expenses and also its capacity to serve clients.

Answer 8

a)

Expert Solution

Answer to Problem 2P

The monthly volume of location A is 16,853.93 units, location B is 17,415.73 units and location C is 17,752.81 units.

Answer 9

a)

Expert Solution

Answer 10

a)

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

Given Information:

It is given that the labor and material costs are $1.76 per sandwich, the cost of sandwich is $2.65. The rent and equipment cost for Location A is$5,000, Location B is $5,500 and Location C is $5,800. The realized monthly profit is $10,000

Calculate the monthly volume at each location

It is calculated by adding realized profit with fixed costs and dividing the result with rate per unit subtracted by variable costs.

Monthly Volume(Q)LocationA=[(Realized Profit+Fixed Costs)(Rate per unit−Variable Costs)]=[($10,000+$5,000)($2.65−$1.76)]=[$15,000$0.89]=16,853.93 units

Monthly Volume(Q)LocationB=[(Realized Profit+Fixed Costs)(Rate per unit−Variable Costs)]=[($10,000+$5,500)($2.65−$1.76)]=[$15,500$0.89]=17,415.73 units

Monthly Volume(Q)LocationC=[(Realized Profit+Fixed Costs)(Rate per unit−Variable Costs)]=[($10,000+$5,800)($2.65−$1.76)]=[$15,800$0.89]=17,752.81 units

Hence, the monthly volume of location A is 16,853.93 units, location B is 17,415.73 units and location C is 17,752.81 units.

Answer 13

b)

Summary Introduction

To determine: The location that yield with greatest profits.

Introduction: Location is where a firm chooses to site its operations. Location decisions can large effects on expenses and incomes. Location choices are normally quite imperative to both substantial and private companies. The area choice directly affects an operation's expenses and also its capacity to serve clients.

b)

Expert Solution

Answer to Problem 2P

“Location C” yields greatest profits.

Explanation of Solution

Given Information:

It is given that the labor and material costs are $1.76 per sandwich, the cost of sandwich is $2.65. The rent and equipment cost for Location A is $5,000, Location B is $5,500 and Location C is $5,800. The expected sales for Location A are $21,000, Location B is $22,000 and Location C is $23,000.

Calculate the location that yield with greatest profits.

It is calculated by subtracting the rate per unit with variable costs and multiplying the result with expected sales and subtracting the whole with the fixed costs.

Expected ProfitLocation A=[(Expected Sales×(Rate per unit−Variable Cost))−Fixed Costs]=[($21,000×($2.65−$1.76))−$5,000]=[($21,000×$0.89)−$5,000]=[$18,690−$5,000]

=$13,690

Expected ProfitLocation B=[(Expected Sales×(Rate per unit−Variable Cost))−Fixed Costs]=[($22,000×($2.65−$1.76))−$5,500]=[($22,000×$0.89)−$5,500]=[$19,580−$5,500]

=$14,080

Expected ProfitLocation C=[(Expected Sales×(Rate per unit−Variable Cost))−Fixed Costs]=[($23,000×($2.65−$1.76))−$5,800]=[($23,000×$0.89)−$5,800]=[$20,470−$5,800]

=$14,670

Hence, location C yields greatest profits.

Answer 14

b)

Summary Introduction

To determine: The location that yield with greatest profits.

Introduction: Location is where a firm chooses to site its operations. Location decisions can large effects on expenses and incomes. Location choices are normally quite imperative to both substantial and private companies. The area choice directly affects an operation's expenses and also its capacity to serve clients.

Answer 15

b)

Expert Solution

Answer to Problem 2P

“Location C” yields greatest profits.

Answer 16

b)

Expert Solution

Answer 17

b)

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

Given Information:

It is given that the labor and material costs are $1.76 per sandwich, the cost of sandwich is $2.65. The rent and equipment cost for Location A is $5,000, Location B is $5,500 and Location C is $5,800. The expected sales for Location A are $21,000, Location B is $22,000 and Location C is $23,000.

Calculate the location that yield with greatest profits.

It is calculated by subtracting the rate per unit with variable costs and multiplying the result with expected sales and subtracting the whole with the fixed costs.

Expected ProfitLocation A=[(Expected Sales×(Rate per unit−Variable Cost))−Fixed Costs]=[($21,000×($2.65−$1.76))−$5,000]=[($21,000×$0.89)−$5,000]=[$18,690−$5,000]

=$13,690

Expected ProfitLocation B=[(Expected Sales×(Rate per unit−Variable Cost))−Fixed Costs]=[($22,000×($2.65−$1.76))−$5,500]=[($22,000×$0.89)−$5,500]=[$19,580−$5,500]

=$14,080

Expected ProfitLocation C=[(Expected Sales×(Rate per unit−Variable Cost))−Fixed Costs]=[($23,000×($2.65−$1.76))−$5,800]=[($23,000×$0.89)−$5,800]=[$20,470−$5,800]

=$14,670

Hence, location C yields greatest profits.

Answer 20

Ch. 8.5 - Prob. 1RQ Ch. 8.5 - Prob. 2RQ Ch. 8.6 - Prob. 1RQ Ch. 8.6 - Prob. 2RQ Ch. 8 - Prob. 1DRQ Ch. 8 - Prob. 2DRQ Ch. 8 - Prob. 3DRQ Ch. 8 - Prob. 4DRQ Ch. 8 - Prob. 5DRQ Ch. 8 - Prob. 6DRQ

Solution Summary: The author calculates the monthly volume at each location by adding realized profit with fixed costs and dividing the result with rate per unit subtracted by variable costs.

Concept explainers

Answer to Problem 2P

Explanation of Solution

Answer to Problem 2P

Explanation of Solution

Want to see more full solutions like this?

Chapter 8 Solutions