Determine the current and predicted revenues-variable cost

Assignment Help Business Economics
Reference no: EM131011269

Janet Gilbert is director of a lab. She has some extra capacity and has contracted with some small neighboring hospitals to run some of their lab tests. She has recently had a study conducted and has determined that her costs for these contracts are $50,000, of which $7,000 is the variable cost of supplies. The rest is non avoidable fixed cost. She currently charges an average of $30 per test. She is thinking of lowering her price by 20 percent in hopes of raising her current volume of 20,000 tests by 25 percent. If she does so, she expects her variable cost per test will go up by 5 percent. Determine the current and predicted (a) revenues (b) variable costs, and (c) total contribution margin and product margin. What should she be recommended to do? Why?

Reference no: EM131011269

Questions Cloud

Reber company had a cash balance per books of : On May 31, 2014, Reber Company had a cash balance per books of $7,167.50. The bank statement from New York State Bank on that date showed a balance of $6,790.60. A comparison of the statement with the cash account revealed the following facts. Prepar..
Find the average cost and the marginal average cost function : What is the marginal cost when x = 1000 and 2000? Find the average cost function C‾ and the marginal average cost function C‾'.
Determine the mass flow rate of air in the gas-turbine cycle : Assuming all the compression and expansion processes to be isentropic, determine (a) the mass flow rate of air in the gas-turbine cycle, (6) the rate of total heat input, and (0 the thermal efficiency of the combined cycle.
The present value of the annuity will be less : Suppose that you are promised $100 per year for the next ten years. Which of the following statements is CORRECT for any r > 0? a. The present value of the annuity will be greater than $1,000. b. The future value of the annuity at t = 10 will be less..
Determine the current and predicted revenues-variable cost : Janet Gilbert is director of a lab. She has some extra capacity and has contracted with some small neighboring hospitals to run some of their lab tests. She has recently had a study conducted and has determined that her costs for these contracts are ..
How much money to put into your retirement plan : You have just turned 22 years old, received your bachelor's degree and accepted your first job. Now you must decide how much money to put into your retirement plan. The plan works as follows: Every dollar in the plan earnss 7% per year. You will cont..
What is the duration of this bond : You have discovered that when the required rate of return on a bond you own fell by 0.5 percent from 8.9 percent to 8.4 percent, the fair present value rose from $945 to $955. What is the duration of this bond? Assume annual payments.
Statements is false regarding the defective units : BT&T Corporation manufactures telephones. Recently, the company produced a batch of 600 defective telephones at a cost of $9,000. BT&T can sell these telephones as scrap for $9 each. It can also rework the entire batch at a cost of $6,500, after whic..
What is the yield to maturity : A 9.6 percent coupon (paid semiannually) bond, with a $1,000 face value and 21 years remaining to maturity. The bond is selling at $955. What is the yield to maturity % per year? An 9.1 percent coupon (paid annually) bond, with a $1,000 face value an..

Reviews

Write a Review

 

Business Economics Questions & Answers

  Negative relationship in aggregate unemployment-mortality

Based on Ruhmís paper on recessions and health, what are the age group where mortality has the strongest percentage response to an increase in the unemployment rate? What are Ruhmís conclusions about potential mechanisms that could explain the negati..

  Elucidate what happens to the official measure of gdp

Elucidate what happens to the official measure of GDP in each of the following situations.

  Government data that computes averages

Government data that computes averages, such as the consumer price index, are applicable to everyone.

  Industry monopolistically competitive-monopoly-oligopoly

Choose an industry or market* and, based on the material in the last few chapters, analyze what type of market structure best describes your chosen industry/market. (i.e., is your industry monopolistically competitive, a monopoly, an oligopoly, or a ..

  Recorded remarkable growth in productivity

The country of Alcazar has been growing at an impressive pace for the last five years. With improvements in technology, many industries have recorded remarkable growth in productivity. The health sector which has the lowest level of productivity empl..

  How much is natalie income per day

She could also use her entire budget to buy 3 uglifruits and 8 breadfruits per day. The price of uglifruits is 8 yen each. How much is Natalie's income per day?

  Accounting and production have in the analysis

If you were the CFO of a company that had to decide on hundreds of potential projects every year, would you want to use sensitivity analysis and scenario analysis or would the amount of arithmetic required take too much time and thus not be cost-effe..

  Q1 if capital is measured on the vertical axis and labor is

q1. if capital is measured on the vertical axis and labor is measured on the horizontal axis the slope of an isoquant

  Dealers effective rate of return on this loan transaction

ou are going to buy a new car worth $24,500. The dealer computes your monthly payment to be $514.55 for 60 months of financing. What is the dealer’s effective rate of return on this loan transaction?

  Make a firm willing to produce a positive amount

A competitive firm uses two variable factors to produce its output, with the production function y = min{x1/2, x2}. The price of factor 1 is $4 and the price of factor 2 is $5. Due to a lack of warehouse space, the company cannot use more than 20 uni..

  For what values of z does heidi accept two independent plays

For what values of Z does Heidi accept two independent plays of the bet? iii) is is possible for Heidi to reject the single bet but accept the aggregate bet?

  What present sum if the quarterly payments are invested

A series of quarterly payments of $750 for 20 years is economically equivalent to what present sum, if the quarterly payments are invested at an annual rate of 12% compounded quarterly?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd