Table 11-5 -Refer to Table 11-5.Suzette's Fancy Packaging Subcontracts with Sunshineland Pecans

question 114

Essay

Table 11-5

-Refer to Table 11-5.Suzette's Fancy Packaging subcontracts with Sunshineland Pecans to box dried fruit and nuts for Suzette's mail order business.Suzette rents space for her factory for $400 a week in a nearby strip mall.She can hire temporary workers for $200 a week.Table 11-5 above shows her output and cost data.Use the table to answer questions a-e.
a.Complete the table.
b.In the last week of summer Suzette closes her business to go on a family vacation.What are her costs during that week?
c.In one week Suzette exactly breaks even.If her revenue for the week is $1,200, how many boxes of fruit and nuts did she produce?
d.Judging from the marginal product of labor data, would you say that Suzette had to settle for increasingly unproductive workers? Explain your answer.
e.Suzette has received an order for 1,500 boxes of nuts per week for the next 3 months.If she expects the trend in the marginal product of labor will continue in the same direction, what do you think she should do? Should she not commit until she can move to a larger space or should she just hire more workers? Explain your answer.

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Definitions:

Liquidity

The simplicity of converting an asset or security into cash without impacting its market value.

P/E Ratio

The price-to-earnings ratio, a valuation metric comparing the current share price of a company to its per-share earnings.

ROE

Return on Equity, a financial ratio that measures a company's profitability relative to the equity.

Market-To-Book-Value Ratio

A financial ratio used to compare a company's current market price to its book value, indicating how much investors are willing to pay above the net asset value.