The cost and revenue functions (in dollars) for producing and selling z Ratmeister hamster cages are given by: C(2) = 700 + 4z R(z) = - 2z² + 72z To maximize profit, the Ratmeister Company should produce and sell hamster cages. Preview
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- A small company produces organic cookies. When the price is $9.00 per dozen, the average daily sales has been 84 dozen cookies. When the price was decreased to $6.00 per dozen, the average daily sales increased to 110 dozen cookies. Assume that daily cookie sales is linearly related to price per dozen. Each dozen cookies has a variable cost of 70 cents to make, plus additional daily fixed costs of $55.00A plant has sufficient capacity to manufacture any combination of four different products (A, B, C, D). For each product, time is required to be invested in four different machines, which is expressed in hours per kilogram of product, as shown in the following table as shown in the following table: (attached image) Each machine has an availability of 60 hours per week. Products A, B, C and D can be sold at $9, $7, $6 and $5per kilo, respectively. Variable labor costs are $2 per hour for machines 1 and 2, and $3 per hour for machines 3 and 4. The material costs for each kilogram of product A are $4. The material costs for each kilogram of products B, C, D and D are $4 each kilogram of products B, C and D are $1. What needs to be done:Formulate a profit-maximizing PL model given the maximum demand per product shown in the table (there are 16 variables). Note: Do it by hand, no computerA manufacturing plant has a potential production capacity of 1,000 units per month(capacity can be increased by 10 percent if subcontractors are employed). The plantis normally operated at about 80 percent of capacity. Operating the plant above this level significantly increases variable costs per unit because of the need to pay theskilled workers higher overtime wage rates. For output levels up to 80 percent ofcapacity, variable cost per unit is $100. Above 80 percent and up to 90 percent, variable costs on this additional output increase by 10 percent. When output is above90 percent and up to 100 percent of capacity, the additional units cost an additional25 percent over the unit variable costs for outputs up to 80 percent of capacity. Forproduction above 100 percent and up to 110 percent of capacity, extensive subcontracting work is used and the unit variable costs of these additional units are 50 percent above those at output levels up to 80 percent of capacity. At 80 percent…
- Sales of bottled water in the United States totaled 34.0 gallons per person in 2014. Evian, a high-quality natural spring water, costs about 60¢ per bottle, while a local brand of purified municipal water may cost only 25¢ per bottle. On average, a local municipal water utility may provide drinkable tap water for $2.90 per 1000 gallons. If the average person drinks two bottles of water per day or uses 5 gallons per day to obtain the same amount of water from the tap, what are the present worth values per person for 1 year of drinking tap water versus bottled water using (a) Evian, and (b) local-brand bottled water? Use an interest rate of 6% per year, compounded monthly, and 30 days per month.Suppose that the ABC Corporation has a production (and sales) capacity of $1,000,000 per month. Its fixed costs—over a considerable range of volume—are $350,000 per month, and the variable costs are $0.50 per dollar of sales.a) What is the annual breakeven point volume (D')? b) What would be the effect on D' of decreasing the variable cost per unit by 25% if the fixed costs thereby increased by 10%?c) What would be the effect on D' if the fixed costs were decreased by 10% and the variable cost per unit were increased by the same percentage?Product X is sold for $500 per unit. The total cost of production per year, including capital recovery and a return, is given by the expression TC = 0.04n3 − 700n + 50, 000 where n is the number of units sold. If TC represents the total of all fixed and variable costs, determine the following: a. The value of n that maximizes profit. b. The maximum profit for a year. c. The fixed cost per year.
- You are a manager at Glass Inc. — a mirror and window supplier. Recently, you conducted a study of the production process for your single-side encapsulated window.The results from the study are summarized below and are based on the 8 units of capital currently available at your plant. Workers are paid $ 60 per unit, per unit capital costs are $ 20, and your encapsulated windows sell for $ 12 each. Given this information, optimize your human resource and production decisions. Find a profit you earn. Labor Output 0 0 1 10 2 thirty 3 60 4 80 5 90 6 95 7 95 8 90 9 80 10 60A local company assembling stereo radio cassette produces 300 units per month at a cost of ₱700 per unit. Each stereo radio cassette sells for ₱1,200. If the firm makes a profit of 10% on its 10,000 shares with a par value of ₱200 per share and the total cost per month is ₱20,000. How many units gives the break-even point and how much is the loss or profit if only 100 units are produced in a given month?The slope of TR and TC are each constant at 10 dollars and 5 dollars respectively and the total fixed cost is 1500 dollars, the breakeven is___________________? The market is [perfect or imperfect]?
- The publishing company is publishing a book for business economics for which it has estimated the following total fixed and average variable cost: Total fixed cost $ 100,000 Average Variable Cost $ 20 Selling Price $ 30 Determine the breakeven output and total sales revenues. Determine the output that would generate a total profit of $ 60000 and total sales revenue at that output level. If total fixed cost reduced to $ 40,000 then what is the breakeven point. How much units they have to sale if they require to have a profit of $ 60,000. Find out the publisher breakeven point if fixed cost remain same at $ 100,000 but the variable cost reduced to $10. Also find out the breakeven point if profit of $60,000 has to be earned. Find out the breakeven and sales at required profit of $60,000 if all cost remain same but the price per unit increased to $40.Please answer only a. & b. Oscar has owned a Ford automobile dealership for over 25 years. Since he has been heavily involved in the sales of cars, Oscar believes that there are 3 different types of customers with the following willingness to pays: Sunroof Navigation System Customer A $3,000 $1,200 Customer B $1,800 $600 Customer C $150 $1,800 Although not realistic, assume that incremental costs are $0. As the owner of the dealerships, Oscar has the final say on pricing for each customer. Suppose that Oscar knows the willingness to pay of Customer A, B and C as soon as he meets them. What price should Oscar charge to each customer to maximize profits? What is the total amount of profits for the 3 customers and what is the total amount of consumer surplus for the 3 customers? Show your…A manufacturing plant has a potential production capacity of 1,000 units per month (capacity can be increased by 10 percent if subcontractors are employed). The plant is normally operated at about 80 percent of capacity. Operating the plant above this level significantly increases variable costs per unit because of the need to pay the skilled workers higher overtime wage rates. For output levels up to 80 percent of capacity, variable cost per unit is $100. Above 80 percent and up to 90 percent, variable costs on this additional output increase by 10 percent. When output is above 90 percent and up to 100 percent of capacity, the additional units cost an additional 25 percent over the unit variable costs for outputs up to 80 percent of capacity. For production above 100 percent and up to 110 percent of capacity, extensive subcontracting work is used and the unit variable costs of these additional units are 50 percent above those at output levels up to 80 percent of capacity. At 80…