Although I can't create a graph in this dialog box, I will describe the long-run equilibrium for Transnet. In economics, long-run equilibrium is concerned with the timeframe during which resources are still obtainable, as well as the associated costs and production volumes.
The company may continue with the advertising, but this is contingent on ensuring that the 1% revenue increase is equal to or exceeds the $10 spent on advertising.
Here's the reasoning:
A revenue uptick of 1% suggests that the advertisement played a role in attracting more customers. This opens possibilities for the company to maintain consistent advertising next year, potentially adapting the ad channel, enhancing ad quality, or changing its timing and location. The 1% increase could even equate to $20, although the actual revenue remains unspecified. Conversely, if the 1% growth is noticeably less than the advertising costs, the business should consider consulting with experts.
Answer:
The total expense of the product per unit, considering a marketing expenditure of $3,000, amounts to $7,025.
Explanation:
For this special order, fixed manufacturing support costs will not be considered since they are constant regardless of order acceptance, hence irrelevant. Be sure to account for marketing costs as additional expenses.
Calculation of the product cost:
Direct materials $1,825
Direct labor $900
Variable manufacturing support $1,300
Marketing costs are $3,000
Total $7,025
Conclusion:
Therefore, the total expense of the product per unit, with marketing charges of $3,000, is $7,025.
