If a business has fixed costs amounting to 80,000 and variable costs of $70,000, in the...
If a business has fixed costs amounting to 80,000 and variable costs of $70,000, in the short run it should stay in business if total revenues were equal to or greater than:
Homework Answers
As it has been given that If a business has fixed costs amounting to 80,000 and variable costs of $70,000, in the short run it should stay in business if total revenues were equal to or greater than total variable cost and variable cost is $70,000.
This is because fixed cost is incurred once and variable cost changes with the level of output change. So if firm is able to cover variable cost, then it minimizes its losses. Hence firm should stay in the business.
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If a business has fixed costs amounting to 80,000 and variable
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A division of a large company reports the information shown below for a recent year. Variable costs and direct fixed costs are avoidable, and 40% of the indirect fixed costs are avoidable. Based on this information, should the division be eliminated? $ 265,000 146,000 Sales Variable costs Fixed costs Direct Indirect Operating loss 39,000 51,000 (29,000) $ 1-a. Compare the amounts of total revenues and total avoidable expenses. Revenues Avoidable expenses Revenues are greater than (less than) avoidable expenses by
(a) Which of these women, if any, earned a profit?
(b) Who should stay in business in the short run?
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You don’t need to calculate any new numbers to answer this.) (ATC:
Average Total Cost, P: Price)
Please answer these questions by also providing explanations and
reasons why you answered the way you did it.
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