Suppose a management accountant of a manufacturing company give you the following information: At the selling price of OMR 1000 the quantity sold is 175 units per month. At the selling price of OMR 1800 the quantity sold is 125 units per month. - The variable cost per unit is OMR 920. - The fixed cost is OMR 24000. Required: i. From the above information, formulate the price function (P-a - bQ), and the cost function (C = a + bQ) of this company. ii. Using the functions which you formulated, determine the following: a. Profit maximizing quantity. b. Profit-maximizing price. c. Maximum profit value. d. Revenue-maximizing quantity.
Suppose a management accountant of a manufacturing company give you the following information: At the selling price of OMR 1000 the quantity sold is 175 units per month. At the selling price of OMR 1800 the quantity sold is 125 units per month. - The variable cost per unit is OMR 920. - The fixed cost is OMR 24000. Required: i. From the above information, formulate the price function (P-a - bQ), and the cost function (C = a + bQ) of this company. ii. Using the functions which you formulated, determine the following: a. Profit maximizing quantity. b. Profit-maximizing price. c. Maximum profit value. d. Revenue-maximizing quantity.
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter9: Applications Of Cost Theory
Section: Chapter Questions
Problem 3E
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Suppose a management accountant of a manufacturing company give you the following information: At the selling price of OMR 1000 the quantity sold is 175 units per month. At the selling price of OMR 1800 the quantity sold is 125 units per month. - The variable cost per unit is OMR 920. - The fixed cost is OMR 24000. Required: i. From the above information, formulate the price function (P-a - bQ), and the cost function (C = a + bQ) of this company. ii. Using the functions which you formulated, determine the following: a. Profit maximizing quantity. b. Profit-maximizing price. c. Maximum profit value. d. Revenue-maximizing quantity.
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