A firm produces three product which sell, respectively, for $25, $35, and $50. Labor requirements for each product are, respectively, 3.0, 4.0, and 3.5 hours per units. Assume labor cost are $5 per hour and annual fixed costs are $75,000. a. Construct a joint total revenue function for sales of three products. b. Determine an annual total cost function for production of the three products. c. Determine the profit function for the three products. Is there unusual about this function? d. What is annual profit $20,000, 10,000 and 30,000 units are sold, respectively, of the three products?
A firm produces three product which sell, respectively, for $25, $35, and $50. Labor requirements for each product are, respectively, 3.0, 4.0, and 3.5 hours per units. Assume labor cost are $5 per hour and annual fixed costs are $75,000. a. Construct a joint total revenue function for sales of three products. b. Determine an annual total cost function for production of the three products. c. Determine the profit function for the three products. Is there unusual about this function? d. What is annual profit $20,000, 10,000 and 30,000 units are sold, respectively, of the three products?
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints
Section: Chapter Questions
Problem 3CE: Patz Company produces two types of machine parts: Part A and Part B, with unit contribution margins...
Related questions
Question
A firm produces three product which sell, respectively, for $25,
$35, and $50. Labor requirements for each product are,
respectively, 3.0, 4.0, and 3.5 hours per units. Assume labor cost
are $5 per hour and annual fixed costs are $75,000.
a. Construct a joint total revenue function for sales of three
products.
b. Determine an annual total cost function for production of the
three products.
c. Determine the profit function for the three products. Is there
unusual about this function?
d. What is annual profit $20,000, 10,000 and 30,000 units are
sold, respectively, of the three products?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning