Terry's Trees has reached its break-even point and has calculated its contribution margin ratio to be 70%. For each $1 increase

Answer:

d. If processed further, the company stands to gain $12 for each unit.

Explanation:

To make the decision, we begin by evaluating the costs and profits associated with each option on a per unit basis.

Profit from the unassembled product is calculated as follows:

Profit = 135 - 60 = $75 for each unit

Profit from the assembled product totals:

Profit = 174 - 60 - 27 = $87 for each unit

Thus, the difference in profit stands at 87 - 75 = $12/unit once assembled.

Accordingly, the company should continue processing further, resulting in an added $12 gain for every unit sold.

Hope that helps.

Information Provided:

Yearly Demand (D) = 200,000 × 12 = 2,400,000 units

Ordering Cost (S) = $500 each order

Carrying Cost (H) = 20% of the Unit Price = $10 × 20% = $2

Cost per Unit = $10

Calculations:

1) Optimal Order Quantity =

Optimal Order Quantity =

2)

Annual Holding Expense = (34,641 / 2) × 2

Annual Holding Expense = $34,641

3) Orders Each Year = Yearly Demand / Optimal Order Quantity

Orders Each Year = 2,400,000 / 34,641

Orders Each Year = 69.2820646

Orders Each Year = 69 (Approximately)

4) Yearly Transportation Variable Cost = Cost per Unit × Yearly Demand

Yearly Transportation Variable Cost = $0.10 × 2,400,000

Yearly Transportation Variable Cost = $240,000

5) Yearly Clerical Expense = Orders Each Year × Cost Each Order

Yearly Clerical Expense = 69.282 × $500

Yearly Clerical Expense = $34,641

<span>Lucas's motor skills are evolving from his midline toward his outer limbs. This process resembles crossing the midline, where a child masters bilateral skills enabling them to perform actions like touching an elbow, crossing both ankles, or having Lucas read from left to right.</span>

Response:

The solution and calculations pertinent to this question are contained in the first, second, third, fourth, and fifth images.

Clarification:

<span>To assess if the new development will lead to increased sales in relation to price elasticity of goods, one must evaluate the effect a reduction in price will have on demand for the product being sold and how significantly a decrease in price will increase demand proportionally.</span>