Question
How can I do this? a company produces and sells a product in a market with free competition. The relationship between the produced amount and
How can I do this?
a company produces and sells a product in a market with free competition. The relationship between the produced amount and the excess cost is as follows:
Quantity (x) | Differential cost (DK) |
0-100 | 4,000,000 |
101-200 | 3,000,000 |
201-300 | 1,800,000 |
301-400 | 2,000,000 |
401-500 | 5 700 000 |
501-600 | 8,500,000 |
601-700 | 16 400 000 |
701-800 | 40 600 000 |
The market price for the product is 55,000 per piece. The fixed costs amount to 2,000,000,-. Carry out calculations and make a graphical representation (diagram) of the unit costs so that you can answer the following questions:
B1.1 What do we mean by upper and lower coverage points? Mark the upper and lower coverage points in the diagram.
B1.2 What do we mean by the profit optimum? Mark the winning optimum in the chart. At what volume do we find the profit optimum and what is the profit in the profit optimum? B1.3 What do we mean by cost optimum? Note the cost optimum in the chart. At what volume do we find the cost optimum?
The company is facing a rebuild of one of the departments to improve the physical working environment. The measure will increase the fixed costs by 1,500,000,-.
B1.4 What effect does the measure have on the cost-optimal and profit-optimal production volume? Explain how you arrived at your answer.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started