7)Carmen Co. can further process Product J to produce Product D. Product J is currently selling for $20 per pound and costs $15.75 per pound to produce. Product D would sell for $38 per pound and would require an additional cost of $8.55 per pound to produce. What is the differential revenue of producing Product D? a. $18.00 per pound b. $6.25 per pound c. $22.25 per pound d. $6.75 per pound 8)Falcon Co. produces a single product. Its normal selling price is $30 per unit. The variable costs are $19 per unit. Fixed costs are $25,000 for a normal production run of 5,000 units per month. Falcon received a request for a special order that would not interfere with normal sales. The order was for 1,500 units with a special price of $20 per unit. Falcon has the capacity to handle the special order, and for this order, a variable selling cost of $1 per unit would be eliminated. Should the special order be accepted? a. yes b. There would be no difference in accepting or rejecting the special order. c. no d. The answer cannot be determined from the data given. 10)Falcon Co. produces a single product. Its normal selling price is $30 per unit. The variable costs are $19 per unit. Fixed costs are $25,000 for a normal production run of 5,000 units per month. Falcon received a request for a special order that would not interfere with normal sales. The order was for 1,500 units with a special price of $20 per unit. Falcon has the capacity to handle the special order, and for this order, a variable selling cost of $1 per unit would be eliminated. If the order is accepted, what would be the impact on net income? a. increase of $3,000 b. decrease of $4,500 c. increase of $1,500 d. decrease of $750

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter13: Nonlinear Optimization Models

Section: Chapter Questions

Problem 4P: The profit function for two products is: Profit3x12+42x13x22+48x2+700, where x1 represents units of...

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7)Carmen Co. can further process Product J to produce Product D. Product J is currently selling for $20 per pound and costs $15.75 per pound to produce. Product D would sell for $38 per pound and would require an additional cost of $8.55 per pound to produce.

What is the differential revenue of producing Product D?

a. $18.00 per pound

b. $6.25 per pound

c. $22.25 per pound

d. $6.75 per pound

8)Falcon Co. produces a single product. Its normal selling price is $30 per unit. The variable costs are $19 per unit. Fixed costs are $25,000 for a normal production run of 5,000 units per month. Falcon received a request for a special order that would not interfere with normal sales. The order was for 1,500 units with a special price of $20 per unit. Falcon has the capacity to handle the special order, and for this order, a variable selling cost of $1 per unit would be eliminated.

Should the special order be accepted?

a. yes

b. There would be no difference in accepting or rejecting the special order.

c. no

d. The answer cannot be determined from the data given.

10)Falcon Co. produces a single product. Its normal selling price is $30 per unit. The variable costs are $19 per unit. Fixed costs are $25,000 for a normal production run of 5,000 units per month. Falcon received a request for a special order that would not interfere with normal sales. The order was for 1,500 units with a special price of $20 per unit. Falcon has the capacity to handle the special order, and for this order, a variable selling cost of $1 per unit would be eliminated.

If the order is accepted, what would be the impact on net income?

a. increase of $3,000

b. decrease of $4,500

c. increase of $1,500

d. decrease of $750

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