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 the website is a variable amount, and each 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; andAdditional 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?

In this question cost of producing shoes is given and the selling price of that too. One needs to…

Answered: Suppose you have a company that…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter8: Tactical Decision-making And Relevant Analysis

Section: Chapter Questions

Problem 54P

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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 the website is a variable amount, and each 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?

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