What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount

A) For the first half of the year, the monthly demand averages to 560 / 6 = 93.33
Order size for the first six months can be calculated using: Sqrt(2 x A x O / C)
Where:
O is the cost of placing an order
C is the carrying cost per order
= Sqrt(2 x 93.33 x 55 / 2) = 71.65, rounded to 72
For the second half of the year, the monthly demand is 900 / 6 = 150
Order size for the second six months:
= Sqrt(2 x A x O / C)
= Sqrt(2 x 150 x 55 / 2)
= 90.83 or 91
B) For the first six months: Total monthly cost = (Q/2) x H + (d/Q) x S= (72 / 2) x 2 + (93.33 / 72) x 5 = $143.30 With a $10 discount, S = $ 55 - $10 = $ 45
Monthly TC at Q = 50 = (50/2) x 2 + (93.33 / 50)x 45 = $134.0 Monthly TC at Q = 100 = (100/2) x 2 + (93.33 / 100) x 45 = $142.00
Monthly TC at Q = 150 = (150/2) x 2 + (93.33 / 150) x 45 = $178.00
C)
Indeed, the manager should take advantage of this proposal and order Q = 50 units for the first six months. For the second six months, d = monthly demand = 900 / 6
= 150,

H = $2.00 for each unit monthly, S = $55, & EOQ = 91.
Calculating Monthly TC (Q = 91):
= (91/2) x 2 + (150/91) x 55
= $181.66
Monthly TC (Q = 50):= (50/2)x2 + (150/50)x 45= $185 Monthly TC (Q = 100) = (100/2) x 2 + (150/100) x 45= $167.50
Monthly TC (Q = 150)= (150/2) x 2 + (150/150) x 45= $195
 

Answer:

A) The equation for net benefits is given by 20 + 24Q - 4Q²

B) 40; 40

C) MNB(Q) = 24 - 8Q

D) 16; -16

E) Q = 3

F) 0

Explanation:

a) This outlines the formula for net benefits.

Essentially, net benefits arise when total benefits surpass total costs from Q units of the control variable.

From this definition, we derive the equation

N(Q)= B(Q) - C(Q)

Where

N(Q)= Net benefits from Q units of control variable

B(Q)= Total benefits from Q control variable units

C(Q)= Total cost from Q units of the control variable

We are informed that B(Q)= 100 + 36Q - and C(Q) = 80 +12Q

This implies:

N(Q)= 100 + 36Q - 4Q² - (80 + 12Q)

= 100 + 36Q - 4Q² - 80 - 12Q

= 20 + 24Q - 4Q²

b) To find the net benefits when Q = 1 and Q=5

Step 1) For Q=1, we apply the 20 + 24Q - 4Q² formula

= 20 + 24(1) - 4(1²)

= 20 + 24 - 4

= 40

Step 2) For Q=5, we use the 20 + 24Q - 4Q² formula

= 20 + 24(5) - 4(5²)

= 20 + 120 - 100

= 40

c) To determine the marginal net benefits equation

Marginal net benefits reflect the change in net benefits caused by a change of one unit in the control variable

The formula is formulated as follows:

MNB(Q) = MB (Q) - MC(Q)

Where

MNB(Q)= The marginal net benefits at the Q level of the control variable

MB(Q)= marginal benefits

MC(Q)=Marginal Costs

We are already informed: MB(Q) = 36 – 8Q and MC(Q) = 12.

This indicates

MNB(Q)=MB (Q)-MC(Q)

= 36-8Q-12

= 36-12-8Q

= 24-8Q

Thus, MNB(Q) = 24-8Q

d) To find marginal net benefits

Step 1) When Q=1 we apply the marginal net benefit formula MNB(Q)= 24-8Q

=MNB(Q)= 24-8(1)

= 16

Step 2) For Q=5 we utilize the marginal net benefit MNB(Q)= 24-8Q

=MNB(Q)= 24-8(5)

=24-40

=-16

e) To calculate maximum net benefits, which occur when marginal costs equal marginal benefits (indicating the control variable level).

MB(Q)=MC(C)

MB(Q)= Marginal benefits

MC(Q)= Marginal Costs

We know that MB(Q) =36-8Q and MC(Q)=12

Therefore, setting maximum benefit

= MB(Q)= MC(Q)

=36-8Q=12

8Q=36-12

8Q= 24

So, Q= 3.

This indicates that at Q equal to 3, net benefits achieve maximum levels

f) To compute marginal net benefits - the difference between marginal costs and benefits

MNB(Q)=MB(Q)-MC(Q)

MNB(Q)= Marginal net benefits

MB(Q)= Marginal benefits

MC(Q)= Marginal Costs

We are aware that MB(Q) =36-8Q and MC(Q)=12

MNB(Q)= 36-8Q-12

=36-12-8Q

=24-8Q

As established, maximum levels of net benefits occur at Q = 3, substituting Q with 3 in the equation

MNB(Q)= =24-8(3)

= 24-24

=0

This indicates that at Q = 3, net costs balance out with net benefits, maximizing net benefits.

Answer:

The impact on the accounting equation is as follows:

Assets $-1,005 (decline) = Liabilities $3,150 (increase) + Retained earnings $-4,155 (decline)

The necessary journal entries are outlined as below:

Explanation:

The accounting equation represents a company's balance sheet, stating that total assets equal liabilities plus equity.

Scenario (a)

Debit Prepaid insurance $6,200

Credit Cash $6,200

(To document payment for a one-year insurance policy)

Debit Insurance expense (0.25 × $6,200) $1,550

Credit Prepaid insurance $1,550

(To record the amortization of prepaid insurance - October to December)

Scenario (b)

Debit Cash $5,000

Credit Unearned revenue $5,000

(To document unearned service revenue)

Debit Unearned revenue (0.75 × $5,000) $3,750

Credit Sales revenue $3,750

(To record the amortization of unearned service revenue)

Scenario (c)

Debit Supplies $1,900

Credit Accounts payable $1,900

(To account for the purchase of supplies on credit)

Debit Supplies expenses ($1,900 - $245) $1,655

Credit Supplies $1,655

(To record the amortization of purchased supplies)

Scenario (d)

Debit Prepaid lease $11,280

Credit Cash $11,280

(Prepayment for office space)

Debit Rent paid (5/12 × $11,280) $4,700

Credit Prepaid lease $4,700

(To record amortization of prepaid office space from August to December)

The accounting equation based on the formula: Assets = Liabilities + Equity

Cash -$6,200 + $5,000 - $11,280 + Prepayment $6,200 - $1,550 + $11,280 - $4700 + Supplies $1,900 - $1,655 = Unearned revenue $5,000 - $3,750 + Accounts payable $1,900

Cash $-12,480 + Prepayment $11,230 + Supplies $245 = Unearned revenue $1,250 + Accounts payable $1,900 + Retained earnings $-4,155

Assets $-1,005 (decline) = Liabilities $3,150 (increase) + Retained earnings $-4,155 (decline)

The flexible approach helps to prevent delays in evaluating external constraints.

Some insights about accessing external constraints:

• They might be imposed on an organization.

• It allows for identifying elements that are outside one’s control.
• Examples include national holidays and sick days.

If we assess the external constraints, then we can avoid delays.

Thus, the other choices appear to be incorrect.

In conclusion, using a flexible strategy can help in preventing delays when it comes to assessing external constraints.

Learn more about external constraints here: