A Plumber Charges a Flat $100 for a Home Service

question 120

Short Answer

A plumber charges a flat $100 for a home service call plus $20 per 15 minutes of labour. Write an equation for calculating the total charges, C, in terms of the hours of labour, H. If you were to plot a graph of C vs. H, what would be the slope and C-intercept of the line?

Compute basic earnings per share.

Analyze the impact of company actions (stock dividends, splits, reacquisition) on EPS.

Calculate the weighted average number of common shares outstanding.

Distinguish between simple and complex capital structures and their implications on EPS reporting.

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Definitions:

Average Variable Cost

The total variable cost divided by the total output, representing the variable cost per unit of output.

Average Total Cost

The total cost per unit produced, determined by dividing the sum of fixed and variable costs by the quantity of output.

Shut Down

The process of ceasing operations or activities, often temporarily, in a business or other organization.

AVC

Average variable cost refers to the total variable cost per unit of output, calculated by dividing the total variable costs by the amount of output produced.