A drywall company in Alberta manufactures dry-wall panels for modular construction companies. Variable costs are $20 per unit and fixed costs are $10,875. the price-demand relationship for the panels is: P = -0.25D + 250 where P is the unit sales price of the drywall panels and D is the annual demand. Knowing that Revenue = Demand X Price Profit = Revenue - Total Cost What profit would the company obtain by maximizing its total revenue if the total -0.25x^2+$250x? Select one:
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- The Rocky Mountain Publishing Company isconsidering introducing a new morning newspaper inDenver. Its direct competitor charges $0.25 at retailwith $0.05 going to the retailer. For the level of newscoverage the company desires, it determines the fixedcost of editors, reporters, rent, pressroom expenses,and wire-service charges to be $300,000 per month.The variable cost of ink and paper is $0.10 per copy,but advertising revenues of $0.05 per paper will begenerated. To print the morning paper, the publisherhas to purchase a new printing press, which will cost$600,000. The press machine will be depreciatedaccording to a seven-year MACRS class. The pressmachine will be used for 10 years, at which time itssalvage value would be about $100,000. Assume 300issues per year, a 40% tax rate, and a 13% MARR.How many copies per day must be sold to break evenat a retail selling price of $0.25 per paper?Q5) A firm is planning to manufacture a new product. The sales department estimates that the quantity that can be sold depends on the selling price. As the selling price is increased, the quantity that can be sold decreases. Numerically they estimate: P = $35.00 - 0.02Q where P =selling price per unit Q = quantity sold per year On the other hand, the management estimates that the average cost of manufacturing and selling the product will decrease as the quantity sold increases. They estimate C = $4.00Q + $8000 where C = cost to produce and sell Q per year The firm's management wishes to produce and sell the product at the rate that will maximize profit, that is, where income minus cost will be a maximum. What quantity should the decision makers plan to produce and sell each year?A herbal tea producer company has 24 different products in the market, each are produced in one of the 3 factories owned by the company. The weights of the products in monthly sales may vary depending on time of the year (demands of certain products shift to others in each of the 4 seasons), age of the products and market conditions, but yearly aggregate demand has a very strong correlation with the price of the product (Here, we ignore any other factor and assume that the yearly aggregate demand is directly and linearly effected by the price). The company found out that when the price for a packet of 20 herbal tea bags is 10 TL, yearly demand is 337500 packets. When the price increases to 11 TL, demand decreases to 337125 packets. On the cost side, the company has 1200000 TL of yearly administrative costs regardless of the price or the number of units sold, including the rents, depreciation of the buildings and other related assets and salaries of 58 workers (average monthly salary…
- A process plant making 5000 kg/day of a product selling for $1.75/kg has annual variable production cost of $2M at 100 % capacity and fixed costs of $700,000. What is the fixed cost per kg at the break even point ? If the selling price of the product is increased by 10%, what is the dollar increase in net profit at full capacity if the income tax rate is 35% of the gross earnings?The following are data from a production, calculate; The Break-even point in terms of sales value and in . The production demand is at 20,000 units. What is the cw1ent production profit? If the management decides to lower dow11its selling price by 50% given the same demand, will this be a sound decision? Justify. Monthly Fixed Factory Overhead Cost = P600,000 Monthly Fixed Selling Overhead Cost = Pl20,000 Va1iable Manufacturing Cost per Unit = P220 Va1iable Selling Cost per Unit = P30 Variable Distribution Cost per Units = P50 Selling Price per limit = P400If company A manufactures t-shirts and sells them to retailers for US$9.80 each It has fixed costs of $2625 related to the production of the t-shirts, and the production cost per unit is US$2.30. Company B also manufactures t-shirts and sell them directly to consumers. The demand for its product is p = 15 − x/125 ,its production cost per unit is US$5.00 and its fixed cost are the same as for company A. Derive the total revenue function, R(x) for company. Derive the profit function, Π(x) for company. How many t-shirts must company B sell to in order to break-even? How many t-shirts must company B sell to maximize its profit?
- If company A manufactures t-shirts and sells them to retailers for US$9.80 each.It has fixed costs of $2625 related to the production of the t-shirts, and the production cost perunit is US$2.30. Company B also manufactures t-shirts and sell them directly to consumers.The demand for its product is p = 15 −x 125, its production cost per unit is US$5.00and its fixed cost are the same as for company A.(i) Derive the total revenue function, R(x) for company A.(ii) Derive the total cost function, C(x) for company A.(iii) Derive the profit function, Π(x) for company A.(iv) Using a spreadsheet, create a table for showing x, R(x)?, C(x) for company Ain the domain x = 50, 100, 150, 200, 250, 300, 350, 400, 450.(v) Graph the functions from (d) above on the same axes.(vi) From your graph, determine the break-even level of output for company A.(vii) Derive the total revenue function, R(x) for company B.(viii) Derive the profit function,…If company A manufactures t-shirts and sells them to retailers for US$9.80 each.It has fixed costs of $2625 related to the production of the t-shirts, and the production cost perunit is US$2.30. Company B also manufactures t-shirts and selll them directly to consumers. The demand for its product is p = 15 − x/125 , its production cost per unit is US$5.00 i (i) Derive the total revenue function,R(x) for company B.(ii) Derive the profit function,Π(x) for company B.(ii) How many t-shirts must company B sell to in order to break-even.(iv) How many t-shirts must company B sell to maximise its profit.In the island nation of Autarka, cardboard boxes are manufactured by four rms: Andrew'sIndustries, Brett's Boxes, Carla's Cardboard, and Delia's Durables. In Autarka, cardboard boxes are sold in bundles of 100. At present, the market price for a bundle of boxes is $30. The technology for manufacturing cardboard boxes is readily available and common to all manufacturers. The cost of plant and machinery for a rm in the box manufacturing business is $7,000,000 per year. The labour, material, and energy cost of producing abundle of 100 boxes is $20. A market study indicates that demand for cardboard boxes is given by the function,P= 40 - Q/500,000 ;where P represents the price of a bundle of 100 boxes, and Qis the total number of bundles of boxes sold each year. Assuming that firms are engaged in Cournot Competition, Using the information provided in the scenario, derive a total cost function for a typical cardboard box manufacturer. Use QA to denote the quantity produced by thetypical…
- In the island nation of Autarka, cardboard boxes are manufactured by four rms: Andrew'sIndustries, Brett's Boxes, Carla's Cardboard, and Delia's Durables. In Autarka, cardboard boxes are sold in bundles of 100. At present, the market price for a bundle of boxes is $30. The technology for manufacturing cardboard boxes is readily available and common to all manufacturers. The cost of plant and machinery for a rm in the box manufacturing business is $7,000,000 per year. The labour, material, and energy cost of producing abundle of 100 boxes is $20. A market study indicates that demand for cardboard boxes is given by the function,P= 40 - Q/500,000 ;where P represents the price of a bundle of 100 boxes, and Qis the total number of bundles of boxes sold each year. Using the information provided in the scenario, derive a total cost function fora typical cardboard box manufacturer. Use QA to denote the quantity produced by thetypical firm.ABC Corporation manufactures a certain product that sells for P5,000 each. The company’s maximum production capacity is 360 units per year. At present it is able to produce and sell 280 units a year. The cost to manufacture each product is P2,400 and the fixed operating cost per year is P520,000.1. What is the break – even sales volume of the product per year?2. What is the profit per year based on the present production – sales status?3. What is the loss if only 150 units were produced and sold in a year?If company A manufactures t-shirts and sells them to retailers for US$9.80 each. It has fixed costs of $2625 related to the production of the t-shirts, and the production cost per unit is US$2.30. Company B also manufactures t-shirts and selll them directly to consumers. The demand for its product is p = 15 - (x /25) , its production cost per unit is US$5.00 and its fixed cost are the same as for company A. Revenue function for company A = R(x) = 9.8x Cost function for company A = C(x) = 2625+2.3x Profit function for company A = π(x) = 7.5x -2625 (iv) Using a spreadsheet, create a table for showing x, R(x)?, C(x) for company A in the domain x = 50, 100, 150, 200, 250, 300, 350, 400, 450. (v) Graph the functions from (iv) above on the same axes. (vi) From your graph, determine the break-even level of output for company A