Engineering Economy
16th Edition
ISBN: 9780133582819
Author: Sullivan
Publisher: DGTL BNCOM
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Question
Chapter 2, Problem 25P
To determine
Calculate the annual profit
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Students have asked these similar questions
A company makes and sells toasters. To make the toasters there is
a fixed monthly cost of $27,000 and an additional production cost of $30 per
toaster. The toasters sell for $75 each.
(a) Write down the cost function.
(b) Write down the revenue function.
(c) Find the profit function.
(d) Find the break even point.
(e) How many toasters must the company sell to make a 15% profit?
Bags/Participants
Fixed Cost
Variable Cost
Total Cost
0
$1,700
$ -
$1,700
100
$1,700
$500
$2,200
200
$1,700
$1,200
$2,900
300
$1,700
$2,700
$4,400
400
$1,700
$5,200
$6,900
500
$1,700
$9,000
$10,700
600
$1,700
$15,000
$16,700
700
$1,700
$23,800
$25,500
800
$1,700
$36,800
$38,500
900
$1,700
$55,800
$57,500
1,000
$1,700
$83,000
$84,700
Given the above information on cost, if you charge $15 per entry, what is the breakeven quantity of bags that you should order? At what quantity of bags will profits be maximized?
A
Use the profit maximizing rule, MR ≥ MC, buy 300 bags.
B
Use the profit maximizing rule, MR ≥ MC, buy 200 bags.
C
Use Qb = F/(MR-AVC) where Qb is the breakeven quantity to be determined, the optimal quantity of bags is 300.
D
Use Qb = F/(MR-AVC) where Qb is the breakeven quantity to be determined, the optimal quantity of bags is 200.
Process A has fixed costs of $10,000 and unit costs of $4.50 each, and Process B has fixed costs of $25,000 and unit costs of $1.50 each. At what level of annual production would the two processes have the same cost? (a) 50 units (b) 500 units (c) 5000 units (d) 50,000 units?
Chapter 2 Solutions
Engineering Economy
Ch. 2 - An experimental composite engine block for an...Ch. 2 - Prob. 2PCh. 2 - Prob. 3PCh. 2 - Prob. 4PCh. 2 - Prob. 5PCh. 2 - Prob. 6PCh. 2 - Prob. 7PCh. 2 - Prob. 8PCh. 2 - Prob. 9PCh. 2 - Prob. 10P
Ch. 2 - Prob. 11PCh. 2 - Prob. 12PCh. 2 - Prob. 13PCh. 2 - Prob. 14PCh. 2 - Prob. 15PCh. 2 - Prob. 16PCh. 2 - Prob. 17PCh. 2 - Prob. 18PCh. 2 - Prob. 19PCh. 2 - Prob. 20PCh. 2 - Prob. 21PCh. 2 - Prob. 22PCh. 2 - Prob. 23PCh. 2 - Prob. 24PCh. 2 - Prob. 25PCh. 2 - Prob. 26PCh. 2 - Prob. 27PCh. 2 - Prob. 28PCh. 2 - Prob. 29PCh. 2 - Prob. 30PCh. 2 - Prob. 31PCh. 2 - An automobile dealership offers to fill the four...Ch. 2 - Prob. 33PCh. 2 - Prob. 34PCh. 2 - Prob. 35PCh. 2 - Prob. 36PCh. 2 - Prob. 37PCh. 2 - Prob. 38PCh. 2 - Prob. 39PCh. 2 - Prob. 40PCh. 2 - Prob. 41PCh. 2 - Prob. 42PCh. 2 - Prob. 43PCh. 2 - Prob. 44PCh. 2 - A hot water leak in one of the faucets of your...Ch. 2 - Prob. 46PCh. 2 - Prob. 47PCh. 2 - Prob. 48SECh. 2 - Prob. 49SECh. 2 - Prob. 50CSCh. 2 - Prob. 51CSCh. 2 - What is the optimal number of units that should be...Ch. 2 - Prob. 53FECh. 2 - Prob. 54FECh. 2 - Prob. 55FECh. 2 - Prob. 56FECh. 2 - Prob. 57FECh. 2 - Prob. 58FE
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Similar questions
- The figure shows graphs of the total cost function and the total revenue function for a commodity. (Assume cost and revenue are measured in dollars.) میرے y 500 400 300 200 100 10 20 30 (a) Label each function correctly. function A | ---Select--- function B | ---Select--- (b) Determine the fixed costs. $ 40 50 A B 60 Xarrow_forwardBags/Participants Fixed Cost Variable Cost Total Cost $1,700 $- $1,700 100 $1,700 $500 $2,200 200 $1,700 इ1,200 $2,900 $1,700 $2,700 $4,400 300 $1,700 $5,200 $6,900 400 $1,700 $9,000 $10,700 500 $16,700 $1,700 $15,000 600 $1,700 $23,800 $25,500 700 $36,800 $38,500 $1,700 800 $55,800 $57,500 $1,700 900 $84,700 $83,000 $1,700 1,000 Given the above information on cost, if you charge $15 per entry, what is the breakeven quantity of bags that you should order? At what quantity of bags will profits be maximized? Please select any/all correct answers: Using Qb = F/(MR - AVC) where Qb is the break even quantity, the event would break even at 283 bags. %3D O Using the profit-maximizing rule, MR 2 MC, the quantity of bags that will maximize profits is 200 bags. O Using the profit-maximizing rule, MR > MC, the quantity of bags that will maximize profits is 300 bags. O The break even quantity cannot be determined in this case. «< Question 2 of 9 A Moving to another question will save this…arrow_forwardMarginal cost is defined by: (a) total cost increases when one more unit is produced. (b) fixed cost increases when one more unit is produced. (c) Total revenue increases when one more unit is produced. (d) average cost increases when one more unit is produced.arrow_forward
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