Flavor Enterprises has been approached about providing a new service to its clients. The company will bill clients $170 per hour; the related hourly variable and fixed operating costs will be $80 and $14, respectively. If all employees are currently working at full capacity on other client matters, the per hour opportunity cost of being unable to provide this new service is: Multiple Choice $0. $76. $90. $94. $170.
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- Tranquility Care provides home healthcare services at an average price of $70 per hour and incurs variable costs of $45 per hour. Assume average fixed costs are $3,600 a month. (Round your answer to the nearest whole unit.)1. What is the number of hours that must be billed to reach the breakeven point? 2. If the company desires to make a profit of $2,000, how many hours must be completed?A travel agency has a holiday package that sells for OMR 125. Fixed costs are OMR 80000; and at the present volume of 1000 customers, variable costs are OMR 25000 and profits are OMR 20000. (a) What is the break-even point volume? (b) Assuming that fixed costs remain constant, how many additional customers will be required for the agency to increase profit by OMR 1000? (Ans. (a) 800 units (b) 10 customers)Dimitri Designs has capacity to produce 30,000 desk chairs per year and is currently selling all 30,000 for $240 each. Country Enterprises has approached Dimitri to buy 800 chairs for $210 each. Dimitris normal variable cost is $165 per chair, including $50 per unit in direct labor per chair. Dimitri can produce the special order on an overtime shift, which means that direct labor would be paid overtime at 150% of the normal pay rate. The annual fixed costs will be unaffected by the special order and the contract will not disrupt any of Dimitris other operations. What will be the impact on profits of accepting the order?
- Identifying Fixed, Variable, Mixed, and Step Costs Consider each of the following independent situations: a. A computer service agreement in which a company pays 150 per month and 15 per hour of technical time b. Fuel cost of the companys fleet of motor vehicles c. The cost of beer for a bar d. The cost of computer printers and copiers at your college e. Rent for a dental office f. The salary of a receptionist in a law firm g. The wages of counter help in a fast-food restaurant h. The salaries of dental hygienists in a three-dentist office. One hygienist can take care of 120 cleanings per month. i. Electricity cost which includes a 15 per month billing charge and an additional amount depending on the number of kilowatt-hours used Required: 1. For each situation, describe the cost as one of the following: fixed cost, variable cost, mixed cost, or step cost. (Hint: First, consider what the driver or output measure is. If additional assumptions are necessary to support your cost type decision, be sure to write them down.) Example: Raw materials used in productionVariable cost 2. CONCEPTUAL CONNECTION Change your assumption(s) for each situation so that the cost type changes to a different cost type. List the new cost type and the changed assumption(s) that gave rise to it. Example: Raw materials used in production. Changed assumptionthe materials are difficult to obtain, and a years worth must be contracted for in advance. Now, this is a fixed cost. (This is the case with diamond sales by DeBeers Inc. to its sightholders. See the following website for information: www.keyguide.net/sightholders/.)Variety Artisans has a bottleneck in their production that occurs within the engraving department. Arjun Naipul, the COO, is considering hiring an extra worker, whose salary will be $45,000 per year, to solve the problem. With this extra worker, the company could produce and sell 3,500 more units per year. Currently, the selling price per unit is $18 and the cost per unit is $5.85. Using the information provided, calculate the annual financial impact of hiring the extra worker.Tranquility Care provides home healthcare services at an average price of $70 per hour and incurs variable costs of $45 per hour. Assume average fixed costs are $3,600 a month. (Round your answer to the nearest whole unit.) What is the number of hours that must be billed to reach the breakeven point? If the company desires to make a profit of $2,000, how many hours must be completed?
- Jolly Travel Agency specializes in flights between Toronto and Jamaica. It books passengers on Ottawa Air. Jolly's fixed costs are $28,500 per month. Ottawa Air charges passengers $1,100 per round-trip ticket. Read the requirement. Begin by selecting the formula to calculate the breakeven points. Breakeven number of units Fixed costs Contribution margin per unit = Next, select the formula to calculate the number of tickets needed to meet the target operating income. Quantity of units required to be sold = ( Fixed costs Target operating income ) ÷ Contribution margin per unit + Now complete the requirement for each of the cases. Begin with case 1. Case 1: Jolly's variable costs are $36 per ticket. Ottawa Air pays Jolly 6% commission on ticket price. Jolly must sell tickets to break even and tickets to meet the target operating income. Case 2: Jolly's variable costs are $28 per ticket. Ottawa Air pays Jolly 6% commission on ticket price. Jolly must sell tickets to break even and tickets…Based on the description below, answer the questions that follow. The manager of a local restaurant spends $8,500 for its monthly fixed cost. Its variable cost is $9 per customer. Determine the amount of its Contribution Margin (CM) to generate the EBT of $6,500. (Do not put "$" or "," in your answer. Put only the number. For example put 10000 for $10,000. FYI, the Canvas will put "" automatically by itself. If necessary, round your answer to the nearest dollar.Suppose a loyal customer requested to a special order to buy 100 units at $5.50 per unit. This is a one-time only order, the manufacturing company has the capacity to fill this order, and by filling the order no other regular order will go unfilled. Would you fill this order if you were the manager? Why? Is there an opportunity cost associated with this order? Explain. What would be the per-unit profit or loss for filling this order?
- Golden Travel Agency specializes in flights between Toronto and Jamaica. It books passengers on Vancouver Air. Golden's fixed costs are $25,500 per month. Vancouver Air charges passengers $1,400 per round-trip ticket. Read the requirement. Begin by selecting the formula to calculate the breakeven points. Breakeven Requirement number of units Fixed costs Contribution margin per unit Next, select the formula to calculate the number of tickets needed to meet the target operating income. Calculate the number of tickets Golden must sell each month to (a) break even and (b) make a target operating income of $15,000 per month in each of the following independent cases. (Round up to the nearest whole number. For example, 10.2 should be rounded up to 11.) Quantity of units required to be sold = ( Fixed costs Target operating income ) + Contribution margin per unit + 1. Golden's variable costs are $40 per ticket. Vancouver Air pays Golden 10% commission on ticket price. 2. Golden's variable…A local Pilates studio recently began offering a monthly subscription servlce for Its patrons. Suppose a particular patron at this studio has the following willingness-to-pay schedule, per sesslon. Session willingness to Pay 1st $77 2nd $66 3rd $55 4th $44 5th $33 6th $22 Suppose this consumer would not demand any more sesslons, even for free. Also assume that the marginal cost to the studlo, per sesslon, is constant at $11. At this price and quantity, consumer surplus At a price of $71.50 per sesslon, the number of sesslons demanded by this consumer would be Is and producer surplus is Suppose the studio has devised a new pricing scheme for consumers who demand more than 1 sesslon. This pricing scheme is a subscription service, whereby consumers can pay a flat fee of $237.60 and can have up to 6 sesslons total. Using this Eubscription pricing model, this consumer would demand sessions. Under this scenarlo, consumer surplus Is and producer surplus is (Hint: For consumer surplus,…A manager must decide how many machines of a certain type to purchase. Each machine can process 100 customers per day. One machine will result in a fixed cost of $2,100 per day, while two machines will result in a fixed cost of $3,700 per day. Variable costs will be $16 per customer, and revenue will be $45 per customer. a. Determine the break-even point for each range. (Round your answers to the next whole number.) One machine Two machines b. If estimated demand is 90 to 120 customers per day, how many machines should be purchased?
