Jonathan is considering opening a shop for online baseball memorabilia. He has two options. He can build the web site himself and only 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, so he is planning on 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)Fixed cost = $2000 + $180 (15*12) = 2180

(b)  Unit price = $4 + $0.5 (price increase) = $4.5

(c)Unit variable cost = $3

(d)First option

(e)Second option

Explanation:

For (d) we have, first option gives (1800) as 200*(4-3) -2000= -1800 and second option give (1880) as 200*(4.5-3) – 2180.

So, he’d prefer first option because of less loss associated with it.

For (e) we have, first option gives (1300) as 700(4-3) -2000 = -1300 and second option gives (1130) because 700(4.5-3) – 2180 = -1130.

So, he would prefer second option because of less loss associated.

Part (a) Annual fixed cost for the e-commerce site option

$15×12 = $180

Part (b) The unit price for the e-commerce option

$4.50+$0.50= $4.50

Part (c) Variable cost for the self-developed site option

The only variable cost is cost of sale = $3.00

Part (d) If Jonathan sells 200 items

Prefers E- Commerce Option which  is more profitable

Part (d) If Jonathan sells 700 items

Prefers E- Commerce Option which  is more profitable

Explanation:

Part (d) If Jonathan sells 200 items

                                      Self Developed Site                 E- Commerce Option

Sales                                       800                                              900

Less VC                                  600                                              600

Contribution                           200                                              300

Less FC                                 2000                                             180

Income                                  (800)                                              120

Therefore E- Commerce Option is more profitable

Part (d) If Jonathan sells 200 items

                                      Self Developed Site                 E- Commerce Option

Sales                                      2800                                            3150

Less VC                                  2100                                            2100

Contribution                            700                                             1500

Less FC                                 2000                                             180

Income                                  (1300)                                            1320

Therefore E - Commerce Option is more profitable

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administrative jobs normally have someone answering phone calls and scheduling appointments, filing patient or customer information, making sure the front of the office looks nice to those who enter the building. administrative jobs can also include making sure the manager has everything they need for meetings, making delivers and much more. administrative jobs are important to most businesses as are customer service focused as they are often one of the first impressions a consumer sees of a business.