A Closer Look at Decision Makers Appendix Checkpoint re 1 Po

A Closer Look at Decision Makers) Appendix Checkpoint re 1 Popcorn (bags) Cola (cans) . What is the relative price of nuts and what is the opportunity cost of a bag of nuts? Draw a graph of Sara\'s budget line with nuts on the x axis. What quantities of popcorn and nuts does Sara buy and what is her marginal rate o substitution of popcorn for nuts at her consumption point? Suppose that the price of nuts falls to $1.50 Sara\'s budget remain unchanged buy now? What are two points on Sara\'s demand curve for nuts? a bag and the price of popcorn and . What quantities of popcorn and nuts does Sara 45

Solution

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Milden Company
Contribution format income statement
for the next quarter
Sales Revenue *		2257000
Variable expenses:
Cost of goods sold **	1147000
Sales commission ***	135420
Shipping expense ****	148000
Total variable expenses		1430420
Contribution margin		826580
Fixed Expenses :
Advertising expense	181000
Shipping expense	63000
Administrative salaries	91000
Insurance expense	10100
Depreciation expense	61000
Total Fixed expenses		406100
Net income		420480
Workings:
Unit sales	37000
Selling price	61
Sales Revenue *	2257000
Unit cost of goods sold	31
Total cost of goods sold **	1147000
Sales commission (6% of sales ) ***	135420
Variable shipping costs ($4 per unit) ****	148000