Question
hello, if you could please help me understand how to solve these 2 problems. thank you in advance I really appreciate it. 1. The JK
hello, if you could please help me understand how to solve these 2 problems. thank you in advance I really appreciate it.
1. The JK Amish Corporation produces 1,200 wood cabinets and 600 wood desks per year, the total cost being $40,000. If the firm produced 1,200 wood cabinets only, the cost would be $28,000. If the firm produced 600 wood desks only, the cost would be $15,000.
a. Calculate the degree of economies of scope.
b. What % of cost savings exist? Where the cost-saving come from?
2. The B&D Construction Corporation, a retail seller of building materials, wants to determine how many Solar roof singles (box) it must sell to earn a profit of $10,000 per month. The price of each Solar roof singles is $500, and the average variable cost is $300.
a.What is the required sales volume if the B&D Construction Corporation's monthly fixed costs are $10,000 per month?
b.If the firm sells each Solar roof singles at a price of $580 rather than $500, what is the required sales volume?
c.If the price is $500, and if the average variable cost is $250 rather than $300, what is the required sales volume?
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