Question

jones food corporation part 1 lo: determining sales volume variances jones food corporation developed the following standard price-and costs for a refrigerated tv dinner that the company produces. standard price and variable costs sales price $25.96 materials cost $9.00 labor cost $2.60 overhead cost $0.56 general, selling, and administrative costs $4.20 planned fixed costs manufacturing cost $500,000 general, selling, and administrative costs $360,000 jones plans to make and sell 200,000 tv dinners. required (a, b, c, d): a. prepare the pro forma income statement that would appear in the master budget.

Answer 1

The total revenue, marginal revenue, total cost, and marginal cost at each output level can be calculated. The profit-maximizing quantity of output is the quantity at which marginal revenue equals marginal cost.

Step-by-step explanation:

To calculate the total revenue, we multiply the price per unit ($20) by the quantity sold. For example, when one unit is sold, the total revenue is $20. When two units are sold, the total revenue is $40.

To calculate the marginal revenue, we determine the change in total revenue when one additional unit is sold. For example, when one unit is sold, the marginal revenue is $20. When two units are sold, the marginal revenue is $20 as well, because there is no change in total revenue.

To calculate the total cost, we sum the fixed costs ($20) with the variable costs for each output level mentioned in the question. For example, when one unit is produced, the total cost is $40. When two units are produced, the total cost is $45.

The marginal cost is calculated by determining the change in total cost when one additional unit is produced. For example, when one unit is produced, the marginal cost is $20. When two units are produced, the marginal cost is $5.

The profit-maximizing quantity of output is the quantity at which marginal revenue equals marginal cost. In this case, that would be two units.