SMC, Inc., is a producer of hand-held electronic games. Its 2006 income statement was as follows: == Question 2:
September 3, 2020
Given the model y = XB+u where the error w is white noise, consider a generic linear estimator B = [(X’x)-x’+ Cly (a) Obtain the condition on C for…
September 3, 2020

SMC, Inc., is a producer of hand-held electronic games. Its 2006 income statement was as follows:

== Question 1: Evaluate the following independent cases, and determine SMC’s 2007 budgeted profit or loss in each case. (Assume that 2006 figures apply unless stated otherwise.)

1.1: Fixed costs increase $150,000.

1.2: Fixed costs decrease $100,000.

1.3: Variable costs increase $3 per unit.

1.4: Variable costs decrease $4 per unit.

1.5: Sales price increases $5 per unit.

1.6: Sales price decreases $5 per unit.

1.7: Sales volume increases 25,000 units.

1.8: Sales volume decreases 15,000 units.

1.9: Sales price decreases $4 per unit, sales volume increases 40,000 units, and variable costs decrease by $2.50 per unit.

1.10: Fixed costs decrease by $100,000, and variable costs increase $4 per unit.

1.11:Sales volume increases 30,000 units, with a decrease in sales price of $2 per unit. Variable costs drop $1.50 per unit, and fixed costs increase $50,000.

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