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Exercise Greentown Industries sells its transport services at a range of prices to five different customer groups. The company has fixed costs of 150,000 per
Exercise Greentown Industries sells its transport services at a range of prices to five different customer groups. The company has fixed costs of 150,000 per year. The average variable costs for each transport service. irrespective of customer group, is 7. The Table below shows the prices charged to each customer group and the quantity of transport services that are currently sold at that price Customer Selling priceQuantity group Multinational Corporate Small business Jovermment Private 19 20 21 22 23 13,000 12.500 12,000 11.000 10,000 a. If the average selling price is 21, calculate the breakeven point in quantity and money terms. b. Ignoring any market demand or capacity limitations, calculate the optimum selling price for Greentown Industries and identify which customer group is most profitable. Use the following information to answer part (c) Assume that the maximum market demand for each customer group is 20.000 transport services at the same Also assume that Greentown's capacity limitation is 60,000 transport services. Based on the calculation of optimum selling prices in (b) above but with the capacity and demand assumptions taken into consideration, calculate the maximum profits that Greentown can earn and the customer mix and quantity by which that profit can be achieved. c
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