Explore IDNLearn.com to discover insightful answers from experts and enthusiasts alike. Get accurate answers to your questions from our community of experts who are always ready to provide timely and relevant solutions.
Micro Enterprises has the capacity to produce 10,000 chips a month, and currently makes and sells 9,000 chips a month. Chips normally sell for $6 each, and cost an average of $5 to make, including fixed costs. The monthly fixed costs are $18,000. Coyote has offered to buy 1,500 chips (all or nothing) for $4 each. The accountant has determined that the excess production (beyond capacity) can be accommodated in the short term by incurring an incremental (fixed) cost of $800. Should Coyote’s offer be accepted? Please show your work to receive full credit. A. No, because it will lose $1 per unit B. No, because the opportunity costs are less than the gains C. Yes, because the contribution from the sale exceeds the incremental costs D. Yes, because it makes $1 per unit in the short run E. Unable to determine.
Sagot :
Thank you for being part of this discussion. Keep exploring, asking questions, and sharing your insights with the community. Together, we can find the best solutions. Thank you for choosing IDNLearn.com for your queries. We’re committed to providing accurate answers, so visit us again soon.
