Always Round Tire Hires Plain Truth Advertising to Write Copy

question 20

Essay

Always Round Tire hires Plain Truth Advertising to write copy for its newspaper advertisements. Always Round has a demand for advertising of MB = 400 -2S where S is the number of hours that Plain Truth delivers. If Plain Truth has a fixed supply cost: MC = $150 per hour, what are the number of hours that Always Round purchases from Plain Truth under the assumption of costless monitoring? How much is the contract worth to Always Round? If Always Round offers half of the surplus to Plain Truth as an incentive, how much is Plain Truth paid for the job?

Identify and understand various types of inventory costs, including freight-in and the limitation of cost to purchase price less discounts.

Comprehend the role of customer and trade discounts in merchandising transactions.

Realize the financial representation of sales tax in sales transactions.

Understand the terms of sale and their impact on freight charges and ownership of goods.

---

Definitions:

F Statistic

A value used in statistical analysis to compare the variances of two samples and determine if they come from populations with equal variances.

One-way ANOVA

A statistical method for identifying if there are notable differences in the average values of three or more separate groups.

Factor of Interest

The main variable that is being analyzed or manipulated in an experiment or study to observe its effects on other variables.

Multiple Levels

In statistics or experimental design, multiple levels refer to the different values or categories that an independent variable can take.