2. Cost-Volume-Profit ChartThe cost-volume-profit chart shows the relationship between sales volume, costs, and profit. To crethis chart, we need to calculate the following values:- Contribution Margin per Unit: Selling Price - Variable Cost per Unit- Contribution Margin Ratio: Contribution Margin per Unit / Selling Price- Break-Even Point: Fixed Costs / Contribution Margin per Unit- Profit: (Unit Sales * Selling Price) - (Unit Sales * Variable Cost per Unit) - Fixed CostsFor the first 100 units of clever wearable devices, we can calculate these values as follows:- Contribution Margin per Unit: $150 $50 = $100- Contribution Margin Ratio: $100/$150 = 0.67 or 67%- Break-Even Point: $10,000/$100 = 100 units- Profit: (Unit Sales $150) - (Unit Sales * $50) - $10,000We can plot these values on a graph with unit sales on the x-axis and revenue, costs, and profit onthe y-axis.

Understanding Cost-Volume-Profit (CVP) Analysis with a CVP ChartImagine you're running a business…

Answered: 2. Cost-Volume-Profit Chart The…

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter7: Production And Cost In The Firm

Section: Chapter Questions

Problem 1.3P

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5) A firm that has positive accounting profit does not necessarily have positive economic profit. True or false? Explain.6) Assume that marginal cost in production is greater than average variable costs. Can you determine whether average variable cost is decreasing or increasing? Explain.
13- Which one of these will continuously increase as more products are produced? a. Average fixed cost b. Fixed cost c. Variable cost d. None of the choices
15. Please select all that are true regarding variable costs (VC): Variable costs must be more than revenue for profitability Variable costs per unit are assumed to be constant in the relevant range of output Total variable costs are from all Q produced Variable costs are the total cost of producing a good or service Variable costs change over time Variable costs are assumed to be proportionate to Quantity Variable costs are the marginal profit per unit Variable costs are less of a risk than fixed costs since FC remain even at zero Q
2. As a general rule, when accountants calculate profit they account for explicit costs but usually ignorea. certain outlays of money by the firm.b. implicit costs.c. operating costs.d. fixed costs.
5d What is the relationship between accounting profit and economic profit? Which is relevant for a firm’s decision to continue production and why? Give examples as to what may cause a divergence between accounting and economic profit
27-Muscat Electricity Distribution Company disconnected the electricity supply to a flat owned by a very poor family that was not able to pay electricity bills for the last 6 months . This action is: O aEthical and illegal O b Unethical and illegal Oc Unethical and legal O d Ethical and legal
41-Marginal cost can be improved by taking which of the following steps? O a. Reducing fixed costs. O b. Increasing the variable cost O c. Changing the business plan frequently O d. Investing the capital in share market
3. The fixed costs incurred by a small genetics research lab are $200,000 per year. Variable costs are $12,500 per research project.a. If the revenue per project is $30,000, what is the breakeven number of projects of this lab in a year to sustain its operations?b. Currently, the lab works on 20 projects a year. What is their profit at this level?c. If variable costs increase to $13,000 per research project, what is the new BEP? By how much will their profit increase or decrease?
1. Assuming that the product’s price is P58 per pack, should the competitor sell in the short-runWhy or why not?If it decides to sell, what will be the profit-maximizing (or loss-minimizing output per day)?What is the profit (or loss) that the seller can realize per day? What is the profit (or loss) per pack?A. Assuming that the product price is P42 per pack, answer the same questions in letter A.B. Because of increasing sellers of masks in the market, the product’s price further decreased to P32per pack. Again, answer the same questions in letter A.C. When is this seller going to shut down?D. Now generate the seller’s supply curve of mask in the short run.
Economics of customer acquisition for fedex: 140 accounts in advertising industry use 2,285 courier paks (cp) per month cp price is $12.50 and variable cost is $4.25 retention rate = 0.9, discount rate = 12% what is the maximum fedex should be willing to spend to acquire a new account in this industry? what is the maximum that fedex should spend/customer per year to increase retention to 0.95? (could you show me it worked out? Thank you!) Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
29. What do you understand by retained earning / Ploughing back of profit? State its advantages and disadvantages?
22. Which one of these will continuously increase as more products are produced? a. None of the choices b. Variable cost c. Average fixed cost d. Fixed cost

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