Question
Bags Fixed Cost Variable Cost Total Cost 0 1700 1700 100 1700 500 2200 200 1700 1200 2900 300 1700 2700 4400 400 1700 5200
Bags Fixed Cost Variable Cost Total Cost
0 1700 1700
100 1700 500 2200
200 1700 1200 2900
300 1700 2700 4400
400 1700 5200 6900
500 1700 9000 10700
600 1700 15000 16700
700 1700 23800 25500
800 1700 36800 38500
900 1700 55800 57500
1000 1700 83000 84700
Given the above information on cost, if you charge $15 per entry, what is the breakeven quantity of bags that you should order?Orders must be placed in blocks of 100 bags.
Please select any/all viable approaches below:
Use the profit maximizing rule, MR MC, buy 300 bags.
Use the profit maximizing rule, MR MC, buy 200 bags.
Use Qb = F/(MR-AVC) where Qb is the breakeven quantity to be determined, the optimal quantity of bags is 300.
Use Qb = F/(MR-AVC) where Qb is the breakeven quantity to be determined, the optimal quantity of bags is 200.
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