Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

AQ1 Data Units [ x ] Cost [ C ] Rev [ R ] Profit [ P ] 10 65500 4300 -61200 20 71500 8600

AQ1
Data Units [x] Cost [C] Rev [R] Profit [P]
10 65500 4300 -61200
20 71500 8600 -62900
50 89500 21500 -68000
80 107500 34400 -73100
100 119500 43000 -76500
120 131500 51600 -79900
130 137500 55900 -81600

You have been asked to take over management of a product line by your Division Manager. Your Cost model for this product line is C = 600(x) + 59,500, where x represents units produced during a particular sales period and C represents total Costs. Upon assuming product line responsibility, you note that the price p of $430 per unit set by your predecessor for the past few sales periods resulted in a Revenue model of R = (p)(x) = 430(x). Provide brief answers in the space provided to parts "a" and "b" below.

b. If your market research department reports no limiting production or market constraints on "x", what is the minimum price p you would want to set in order to eventually "break even"?

Step by Step Solution

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_2

Step: 3

blur-text-image_3

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

Optimization Methods In Finance

Authors: Gerard Cornuejols, Reha Tütüncü

1st Edition

0521861705, 978-0521861700

More Books

Students also viewed these Finance questions

Question

Methods of Delivery Guidelines for

Answered: 1 week ago