Question
Bags 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
Bags 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
1000 $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?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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