MANAGERIAL/ECON+BUS/STR CONNECT ACCESS
9th Edition
ISBN: 2810022149537
Author: Baye
Publisher: MCG
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Question
Chapter 1, Problem 8CACQ
To determine
(a)
To calculate:
The accounting profits.
To determine
(b)
To calculate:
The economic profits.
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Please answer letter B.
Georgina is the owner and manager of a small café with monthly sales of 50,000 HK dollars and a monthly expenses of 42,500 HK dollars. Thus, having an accounting profit of 7,500 HK dollars.
A. She could make 10,000 HK dollars a month somewhere else. She does, however, favor running the café. In fact, she would prefer to run the café than do anything else and would even pay up to 2,750 HK dollars per month. Is the café generating a profit, and should she continue running her business?
B. Suppose the cafe’s revenues and expenses stay the same, but Georgina can now earn 11,000 HK dollars per month somewhere else. Is the cafe still making a profit? Explain.
Nicole purchased a new printing machine and started a small printing shop. As per her
calculations, to earn revenue of $6,000 per month, she needs to sell printouts of
27,000 sheets per month. The printing machine has a capacity of printing 35,300
sheets per month, the variable costs are $0.03 per sheet, and the fixed costs are
$2,200 per month.
a. Calculate the selling price of each printout.
Round to the nearest cent
b. If they reduce fixed costs by $310 per month, calculate the new break-even volume
per month.
Round up to the next whole number
c. Calculate the new break-even volume as a percent of capacity.
↑
%
→
Buffy is thinking about opening an amulet store. Sheestimates that it would cost $350,000 per year to rentthe location and buy the merchandise. In addition,she would have to quit her $80,000 per year job as avampire hunter.
Buffy thinks she can sell $400,000 worth of amulets in a year. What would her accountant consider the store’s profit?
2. Should Buffy open the store? Explain.
Chapter 1 Solutions
MANAGERIAL/ECON+BUS/STR CONNECT ACCESS
Ch. 1 - Prob. 1CACQCh. 1 - What is the maximum amount you would pay for an...Ch. 1 - Prob. 3CACQCh. 1 - Prob. 4CACQCh. 1 - Prob. 5CACQCh. 1 - Prob. 6CACQCh. 1 - Prob. 7CACQCh. 1 - Prob. 8CACQCh. 1 - Prob. 9CACQCh. 1 - Prob. 10CACQ
Ch. 1 - Prob. 11PAACh. 1 - Prob. 12PAACh. 1 - Prob. 13PAACh. 1 - Prob. 14PAACh. 1 - Prob. 15PAACh. 1 - As a marketing manager for one of the worlds...Ch. 1 - Prob. 17PAACh. 1 - Prob. 18PAACh. 1 - Prob. 19PAACh. 1 - Prob. 20PAACh. 1 - Prob. 21PAACh. 1 - Prob. 22PAACh. 1 - Prob. 23PAACh. 1 - Prob. 24PAA
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