Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The AB-XYZ company has hired a M121 commerce student who successfully completed a calculus course to estimate the break-even point for a manufacturer of smoke

The AB-XYZ company has hired a M121 commerce student who successfully completed a calculus course to estimate the break-even point for a manufacturer of smoke alarms. By checking the past records of costs and output, the student has determined that the variable cost per smoke alarm is $30 when the output is very low, is $18 when the output is 30 smoke alarms per hour, and drops toward $10 when the output is very high; the fixed cost is 300 per hour; and each smoke alarm made can be sold for $20. 

(a.) Write the AB-XYZ company's variable cost v as a linear-to-linear rational function of output level q, i.e., in the form v=(aq+b)/(q+c). 

(b.) Write the AB-XYZ company's total cost C as a quadratic-to-linear rational function of the output level q. 

(c.) Determine the output level q at which the AB-XYZ company must operate to break-even.

Step by Step Solution

3.50 Rating (153 Votes )

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Economics

Authors: Paul Keat, Philip K Young, Steve Erfle

7th edition

0133020266, 978-0133020267

More Books

Students also viewed these Economics questions

Question

What is done to minimize the ARP broadcast in routing

Answered: 1 week ago

Question

Give one example of building flexibility into system capacity.

Answered: 1 week ago