Business, 18.03.2021 01:20 thedeathlord123

Geoff Gullo owns a small firm that manufactures "Gullo Sunglasses." He has the opportunity to sell a particular seasonal model to Land’s End. Geoff offers Land’s End two purchasing options: • Option 1. Geoff offers to set his price at $65 and agrees to credit Land’s End $53 for each unit Land’s End returns to Geoff at the end of the season (because those units did not sell). Since styles change each year, there is essentially no value in the returned merchandise.
• Option 2. Geoff offers a price of $55 for each unit, but returns are no longer accepted. In this case, Land’s End throws out unsold units at the end of the season. T his season’s demand for this model will be normally distributed with mean of 200 and standard deviation of 125. Land’s End will sell those sunglasses for $100 each. Geoff ’s production cost is $25.
a. How much would Land’s End buy if they chose option 1?
b. How much would Land’s End buy if they chose option 2?
c. Which option will Land’s End choose?
d. Suppose Land’s End chooses option 1 and orders 275 units. What is Geoff Gullo’s expected profit?

Answers: 2

Show answers

Other questions on the subject: Business

Business, 22.06.2019 06:30, nrudd9799

If a team of three workers, each making the u. s. federal minimum wage, produced these 12 rugs, what would the total labor cost be? don't forget that these workers would be working overtime.

Answers: 3

continue

Business, 22.06.2019 07:30, 2016gbryant

Jordan, inc. sells fireworks. the company’s marketing director developed the following cost of goods sold budget for april, may, june, and july. april may june july budgeted cost of goods sold $62,000 $72,000 $82,000 $88,000 jordan had a beginning inventory balance of $3,000 on april 1 and a beginning balance in accounts payable of $14,600. the company desires to maintain an ending inventory balance equal to 15 percent of the next period’s cost of goods sold. jordan makes all purchases on account. the company pays 65 percent of accounts payable in the month of purchase and the remaining 35 percent in the month following purchase. required prepare an inventory purchases budget for april, may, and june. determine the amount of ending inventory jordan will report on the end-of-quarter pro forma balance sheet. prepare a schedule of cash payments for inventory for april, may, and june. determine the balance in accounts payable jordan will report on the end-of-quarter pro forma balance sheet.

Answers: 2

continue

Business, 22.06.2019 19:30, dominickstrickland

Kirnon clinic uses client-visits as its measure of activity. during july, the clinic budgeted for 3,250 client-visits, but its actual level of activity was 3,160 client-visits. the clinic has provided the following data concerning the formulas to be used in its budgeting: fixed element per month variable element per client-visitrevenue - $ 39.10personnel expenses $ 35,100 $ 10.30medical supplies 1,100 7.10occupancy expenses 8,100 1.10administrative expenses 5,100 0.20total expenses $ 49,400 $ 18.70the activity variance for net operating income in july would be closest to:

Answers: 1

continue

Business, 22.06.2019 20:30, joaquin42

Hank itzek manufactures and sells homemade wine, and he wants to develop a standard cost per gallon. the following are required for production of a 70-gallon batch. 2,700 ounces of grape concentrate at $0.04 per ounce 77 pounds of granulated sugar at $0.43 per pound 133 lemons at $0.79 each 350 yeast tablets at $0.24 each 350 nutrient tablets at $0.14 each 2,500 ounces of water at $0.001 per ounce hank estimates that 4% of the grape concentrate is wasted, 9% of the sugar is lost, and 32% of the lemons cannot be used. compute the standard cost of the ingredients for one gallon of wine. (round intermediate calculations and final answer to 2 decimal places, e. g.

Answers: 3

continue

You know the right answer?

Geoff Gullo owns a small firm that manufactures "Gullo Sunglasses." He has the opportunity to sell a...