Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Olivia's has 3 separate branches in its business. The Mountain West branch has been losing money according the following report: Sales 1,000 -variable costs (600)
Olivia's has 3 separate branches in its business. The Mountain West branch has been losing money according the following report: Sales 1,000 -variable costs (600) =Contribution Margin 400 - Fixed expenses (500) Operating Income (100) Olivia is considering shutting down the Mountain West branch. If she did that, she knows that: (1) all variable costs would be avoidable, and (2) of the fixed costs, $125 of them are common (or allocated fixed costs). What would be the effect if Olivia shut down the Mountain West Branch? (better off is a positive number, worse off is a negative number) Question 4 1 pts Marshall has a car wash service. For each car, it costs Marshall $3.50 but Marshall is able to sell the service for $5 per car. Marshall services 1,000 car per month. Marshall is considering adding a hand-wax/dry feature to the car wash. If Marshall did that, he would need to spend another $2.50 per car on labor and materials, but he would then be able to charge $8 for the service per car. If Marshall adds the hand-wax/dry feature, how much better or worse off will he be (assuming the same quantity of 1,000 cars)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started