Blog

This question is worth a total of 14 points. Sony and Microsoft both plan to introduce a new hand-held video game. Sony plans to use a heavily automated production process to produce its product while Microsoft plans to use a labor-intensive production process.  The following revenue and cost relationships are provided:   Selling price                                    $  100.00                      $  100.00 Variable Unit Data:                       Sony Device               Microsoft Device   Direct materials                                     18.00                            18.00   Direct labor                                              5.00                            20.00   Overhead                                                 5.00                            20.00   Selling and Admin.                                  2.00                              2.00 Annual Fixed Costs:   Overhead                                       $400,000                        $160,000   Selling & Admin.                          $  90,000                            90,000 Required:  (NOTICE THAT THERE ARE THREE (3) QUESTIONS TO THIS PROBLEM!)  1. Compute the contribution margin per unit for each company.   2. Prepare a contribution income statement for each company assuming each company sells 8,000 units. Compute each firm’s net income if the number of units sold increases by 10%.

At a sales level of $270,000, the magnitude of operating leverage for Donuts Unlimited is 2.8 times. If sales increase by 15%, profits will increase by:

Explain the roles of the id and the ego in consumer decision making.

How is consumer confidence measured, and how does it affect spending behavior?

Hedonic adaptation suggests that consumers will experience increasing satisfaction over time from the same purchase.

Identify one trend in family structure and briefly explain how it might affect consumer behavior.

List an innovation. Categorize its type and identify two factors that helped it to diffuse.

What is the difference between social capital and cultural capital? Give an example of each.

What is the principle of least interest, and how does it affect social power?

Consumer demand depends only on a consumer’s ability to purchase a product.