Calculate the change in advanced package service, Business Economics

Assignment Help:

Advanced Package Service (APS) offers overnight package delivery to business customers.  APS has recently decided to expand its facilities to better satisfy current and projected demand.  Current volume totals three million packages per week at a price of $15 each, and average variable costs are constant at all output levels.  Total fixed costs are $4 million per week, and profit contribution averages one-fourth of revenues on each delivery.  After completion of the expansion project, total fixed costs will increase by 50%, but variable costs will decline by 25%.

A. Calculate the change in APS's weekly breakeven output level that is due to expansion.

B. Assuming that volume remains at three million packages per week, calculate the change in the degree of operating leverage that is due to expansion.

C. Again assuming that volume remains at three million packages per week, what is the effect of expansion on weekly profit?


Related Discussions:- Calculate the change in advanced package service

Average amount of debt families, The average amount of debt families have i...

The average amount of debt families have is 2.5 times their annual income with a standard deviation 0.75 times their annual income. How much debt does a family have to have (relati

How is the equality of income distribution measured, How is the equality of...

How is the equality of income distribution measured? The Gini coefficient is a statistical type measure of income distribution. This Gini coefficient is: • 0, which impl

Define the aggregate price level in the macroeconomics, Define the aggregat...

Define the aggregate price level in the macroeconomics. Aggregate Price Level: A nominal measure is a measure which has not been adjusted for modifications into prices

#title.BUS100., Find 1-3 articles that discuss the competition between Targ...

Find 1-3 articles that discuss the competition between Target and Walmart.

Is ownership of change important for development, Is ownership of change im...

Is ownership of change important for development? Successful polices depend onto countries owning the process. When the economic reforms required for development are considere

Explain the structure conduct performance framework, QUESTION (a) Expla...

QUESTION (a) Explain and discuss the Structure Conduct Performance framework (b) The hypotheses of interest in the Structure Conduct Performance framework are as follows- H

Equilibrium in the goods and money markets, using a diagram, evaluate the e...

using a diagram, evaluate the effect of a decrease in money supply to the equilibrium in the goods and money market

Does the structure of the population issue, Does the structure of the popul...

Does the structure of the population issue? Dependents into an economy, children as well as old people are assists by the economically active. Dependency ratio uses to measure

What are rostowís policy implications, What are Rostowís policy implication...

What are Rostowís policy implications? • LDCs (Less Developed Countries) require aid. The development procedure can stall at the Take Off stage for be short of savings. 15

Write Your Message!

Captcha
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