BIZZ0 estimated that income for January would be $53,500 and expenses would be $37,250. The actual income was $48,500 and the actual expenses were $35,000. What is the variance for the balance (income − expenses)?

Answers

Answer 1

Answer:

the  variance for the balance is $2,750 favorable

Explanation:

The computation of the variance for the balance is shown below:

= Income - expenses

= (Estimated income - actual income) - (estimated expenses - actual expenses)

= ($53,500 - $48,500) - ($37,250 - $35,000)

= $5,000 - $2,250

= $2,750 favorable

Hence, the  variance for the balance is $2,750 favorable

We simply applied the above formula so that the correct value could come

And, the same is to be considered


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Store A uses the newsvendor model to manage its inventory. Demand for its product is normally distributed with a mean of 500 and a standard deviation of 300. Store A purchases the product for $10 each unit and sells each for $25. Inventory is salvaged for $5. What is its maximum profit?

a. $10,500
b. $8,500
c. $7,500
d. $6,000

Answers

Answer:

c. $7,500

Explanation:

Profit Maximization is a process in which an entity determines the selling price and cost of the product that results in the highest profit.

Use following formula to calculate the maximum profit

Maximum profit = Mean demand x ( Price per unit - Cost per unit )

Where

Mean demand = 500

Price per unit = $25

Cost per unit = $10

Placing values in the formula

Maximum Profit = 500 x ( $25 - $10 )

Maximum Profit = $7,500

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