% of the profit function; The director wants monthly deposits to save $5,000,000 at 5.10% in 30 years; and Additional money is saved for your position for only the first month. You want to make $250,000 at 5.70% compounded continuously for 20 years.
% of the profit function; The director wants monthly deposits to save $5,000,000 at 5.10% in 30 years; and Additional money is saved for your position for only the first month. You want to make $250,000 at 5.70% compounded continuously for 20 years.
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 6EA: Marlin Motors sells a single product with a selling price of $400 with variable costs per unit of...
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Question
Suppose you have a company that produces and sells shoes:
- The cost of producing 6,000 pairs of shoes is $81,500 and 16,000 pairs of shoes for $165,000. each pair produced can be sold for $21;
- There is a website where your shoes can be viewed. The traffic on website is a variable amount, and each view view generates $0.005;
- The employees are paid 15% of the profit function;
- The director wants monthly deposits to save $5,000,000 at 5.10% in 30 years; and
- Additional money is saved for your position for only the first month. You want to make $250,000 at 5.70% compounded continuously for 20 years.
Leading Question: How would you represent the above situation?
- Suppose in the first month, you sold 10,000 pairs of shoes, and half a million views on the website. What is the first month's outcome?
- How does the second month's model differ from the first month?
- Suppose for the second month, you had zero views on the website. Find how many shoes are needed to break even for the second month's model.
- Suppose in the third month, business is going well. Each pair of shoes can now be sold for $30. How does this change your model? You may show by altering your mathematical model or describe in words.
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