A Business Consultant Is Analyzing the Cost Structure of Two

question 249

Short Answer

A business consultant is analyzing the cost structure of two firms in the same retail business. On sales of $3.66 million, Thrifty's had wholesale costs of $2.15 million and overhead expenses of $1.13 million. If Economart had the same proportionate costs on its sales of $5.03 million, what would its wholesale costs and overhead expenses have been?

---

Definitions:

Output Contract

An agreement between a seller and buyer where the seller agrees to sell all of the production to the buyer, who in turn agrees to accept and pay for the product.

Illusory Contract

A contract that appears to be binding but does not actually commit one or more parties to an actionable obligation.

Defame

To damage someone's reputation through false or unjustified statements.

Preexisting Obligation

An obligation that already exists before a certain action is taken or an agreement is made, often relevant in contract law.