Business, 04.03.2020 00:15 roger93

$2,000/year. The average item for sale is $4. Average costs associated with each sale are $3. His second option is to use an existing e-commerce service. This incurs an additional monthly cost of $15/month. The site takes a cut of his sales of $0.25/item, so he is planning on also increasing his prices by $0.5/item. The remaining costs stay the same

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Answer from: bellamuniz2015p23zr7

Here is the full question.

Jonathan is considering opening a shop for an online baseball memorabilia .He has two options. He can build the website himself and pay for hosting. This would cost him $2,000/year. The average item for sale is $4. Average costs associated with each sale are $3. His second option is to use an existing e-commerce service. This incurs an additional monthly cost of $15/month. The site takes a cut of his sales of $0.25/item, so he is planning on also increasing his prices by $0.5/item. The remaining costs stay the same .

a) What is the annual fixed cost for the e-commerce site option?

b) What is the unit price for the e-commerce option?

c) What is the variable cost for the self - developed site option?

d) If Jonathan sells 200 items , which option does he prefer?

e) If Jonathan sells 700 items, which option does he prefer?

a) $ 2,180

b) $4.5

c) $3

d) The first option

e) The second option

Explanation:

The parameters we are equipped with from the question include:

cost of building website himself and paying for hosting = $2,000/year

average item = $4

average cost = $3

monthly cost = $15/ month

sales = $ 0.25 / item

Prices increase = $0.5/item

a) The annual fixed cost for the e-commerce site option = cost +(monthly cost × 12 months)

= $2000 ($15 × 12)

= $2000 + $180

= $ 2180

b) The unit price for the e-commerce option = (average item + price increase)

= $4 + $0.5

= $ 4.5

c) Variable Cost for the first option

= average cost

= $ 3

d) If Jonathan sells 200 items

For the first option; we have:

= number of items × (average item - average cost) - cost

= $200($4 -$3) - $2000

= $200($1) -$2000

= $200 - $2000

= - $1,800

For the second option; we have;

= number of items × ( unit price- average cost) - site option

= $200 × ($4.5-$3) - $2180

= $200 × ($1.5) - $2180

= $300 - $2180

= -$1880

∴ Here, when we sells 200 items, he will prefer the first option because lesser price is associated with it.

If Jonathan sells 700 items.

For the first option; we have:

= number of items × (average item - average cost) - cost

= $700($4 -$3) - $2000

= $700($1) -$2000

= $700 - $2000

= - $1,300

For the second option; we have;

= number of items × ( unit price- average cost) - site option

= $700 × ($4.5-$3) - $2180

= $700 × ($1.5) - $2180

= $1050 - $2180

= -$1130

∴ Here, when he sells 700 items, He will prefer the second option because lesser price is associated with it.

Answer from: Quest

Some disadvantages to leasing a car is that you are counting on someone to give you money every week or month depending on what you decided and if they don't have all of it well what if you needed that money now you as well have to pay not in full. a disadvantages to purchasing a new vehicle is if it is used then not all the time will absolutely everything work. its almost like a trail and era. although if it is a new car they will try to though all these specials and deals at you in your lease and it can be very overwhelming if you are not use to it.

Answer from: Quest

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