Use the following spreadsheet to answer the following questions: 6. What is tota
ID: 1215873 • Letter: U
Question
Use the following spreadsheet to answer the following questions:
6. What is total fixed cost for Star?
7. If Star's total fixed costs were to DOUBLE for some reason, how much profit (or loss) does Star make when fixed costs are doubled?
8. Given your answer in #7, should the Star shut down, why or why not? If they should continue to produce, how many papers should they produce? Explain your choice in 25-50 words.
Number of newspapers per day (Q)
Total revenue (including advertising revenues) per day (TR)
Total cost per day (TC)
MC
MR
PROFIT=TR-TC
0
0
3500
0
-3500
1000
3250
3600
0.1
3.25
-350
2000
4250
3700
0.1
1
550
3000
4750
3860
0.16
0.5
890
4000
5000
4020
0.16
0.25
980
5000
5200
4300
0.28
0.2
900
6000
5375
4500
0.2
0.175
875
7000
5400
4590
0.09
0.025
810
8000
5375
4810
0.22
-0.025
565
9000
5225
5050
0.24
-0.15
175
Number of newspapers per day (Q)
Total revenue (including advertising revenues) per day (TR)
Total cost per day (TC)
MC
MR
PROFIT=TR-TC
0
0
3500
0
-3500
1000
3250
3600
0.1
3.25
-350
2000
4250
3700
0.1
1
550
3000
4750
3860
0.16
0.5
890
4000
5000
4020
0.16
0.25
980
5000
5200
4300
0.28
0.2
900
6000
5375
4500
0.2
0.175
875
7000
5400
4590
0.09
0.025
810
8000
5375
4810
0.22
-0.025
565
9000
5225
5050
0.24
-0.15
175
Explanation / Answer
Ans:
6) The total fixed cost is = 3500 Altered expenses are those costs that are free of the measure of generation. For this situation, when yield is zero the level of expense is 3500. All things considered the aggregate altered expense for Star is 3500.
7)
At the point when altered cost transforms, it doesn't change the ideal amount yield, in light of the fact that the ideal yield just relies on upon variable cost, not settled expense as altered expense does not influence minimal expense.
It wouldn't change the ideal level of generation since it doesn't change the structure of the minor expenses and incomes. The ideal yield relies on upon minimal expenses and minor incomes, and these are unaffected by settled expenses.
8)
In taking a gander at the aggregate expense related if settled expenses are multiplied they ought to leave the business on the off chance that they can't
In the event that Star close down in the short, then it's benefit will be - 3500 in light of the fact that despite everything it acquires the altered expense, however by creating 5,000 papers it just loses $950. All things considered in the short run it ought to proceed with generation, in spite of the fact that this wouldn't be the situation in the long haul.
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