Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Net operating income (loss) Fixed expenses Total $ 4,290,000 1,374,000 2,916,000 2,210,000 $ 706,000 Department Hardware Linens $ 3,160,000 $ 1,130,000 954,000 2,206,000 1,320,000 420,000 710,000 890,000 $ 886,000 $ (180,000) A study indicates that $377,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 14% decrease in the sales of the Hardware Department. Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department? Financial (disadvantage) _

9 Aphria Corporation listed on the Toronto Stock Exchange (TSX) produces 300,000 units a year and sells them all for $9 each. Aphria Corporation has explicit costs of production of $2,000,000 and its implicit costs of production are $350,000. Aphria Corporation earns an accounting profit of :20

Refer to the figure below to answer the following questions p = mr 0 1.5 2.5 me atc ave 15. How much should this firm produce in order to maximize profits? (a) 0 (b) 1.5 (c) 2.5 (d) There is not enough information to answer the question (a) π = 0 (b) = -fc (c) π => 0 (d) There is not enough information to answer the question 16. What level of economic profit, 7, will this firm be earning at its profit-maximizing quantity of output?

Marginal Profit Yaster Breakfast Supplies is planning to manufacture and market a new toaster. After conducting extensive market surveys, the research department provides the following estimates: • a weekly demand of 313 at a price of $13 per toaster • a weekly demand of 202 at a price of $17 per toaster The financial department estimates that weekly fixed costs will be $1,379 and variable costs (cost per unit) will be $4. Assume: • the relationship between price and demand is linear the cost function in linear Use your models to predict the marginal profit when Yaster is producing and selling 261 toasters per week. Round to the nearest cent. $ per toaster