Answer:
$0.6 per pounds
Explanation:
Below is the calculation for the standard unit materials cost for each pound:-
Whole Tomatoes = 5,000 × $0.75
= $3,750
Vinegar = 350 × 0.90
= $315
Corn syrup = 40 × 7.50
= $300
Salt = 125 × 1.80
= $225
Total cost = Whole Tomatoes + Vinegar + Corn syrup + Salt
= $3750 + $315 + $300 + $225
= $4,590
Standard Unit Materials cost per pound = Total cost ÷ ketchup pounds
= $4,590 ÷ 7,650 pounds
= $0.6 per pounds
Answer:
a. -1.25
b. -1.25
Explanation:
Price elasticity measures how demand varies with price fluctuations.
The formula is:
= % change in Quantity / % change in Price
a. If the price moves from $1.00 to $1.50, the elasticity of demand will be:
% change in Quantity calculated using the midpoint method;
% Change in Price calculated with the midpoint formula
= -0.5/0.4
=-1.25
b. If the price decreases from $1.50 to $1.00, the elasticity of demand is:
% change in Quantity calculated using the midpoint formula;
% Change in Price calculated using the midpoint formula
= 0.5/-0.4
= -1.25
Answer and Explanation:
a. Below is the computation of the contribution margin for each segment:
(in millions)
Details Investor Advisor Services Services
Revenue from
operations $1,681 $1,660
Plus:
Depreciation $171 $154
Contribution
Margin $1,852 $1,814
2. Next, we assess the decrease in operating income
(in millions)
Details Combined services Institutional Services
Total Revenue $9,368 $4,771
Less:
Variable expense $5,702 $2,919
($2,919 + $2,783)
Contribution
margin $3,666 $1,852
Less:
Fixed costs -$325 -$171
Net earnings $3,341 $1,681
So from the previous calculations, it shows that the net operating income has decreased by
= $3,341 - $1,681
= $1,660 million
The variable costs can be calculated as
= Service revenues minus income from operations minus depreciation expense
