Question
How to calculate the annual Profit based on the following Weekly production with the following unit costs OUTPUT VC FC SP Product A 100,000 .75
How to calculate the annual Profit based on the following Weekly production with the following unit costs
OUTPUT VC FC SP
Product A 100,000 .75 .24 2.00
Product B 50,000 .30 .17 1.00
Prodcuct C 125000 1.10 .25 1.70
Sales Volume is equal to production volume and a 3 week allowance for holidays with no production
The rates of absorption of fixed costs based on Current levels of output with similar cost structure .
i wish to MANUFACTURE product D
To Market product D Costs required 250,000
machine for product A will need to be modified - cost 80,000
additional annual Fixed costs also of 45000
VC of Prodcut D .60 CENTS PER UNIT
Demand survey suggests the following for Product D
sp 1.70 weekly demand 55000
sp 1.40 weekly demand 80000
sp 1.15 weekly demand 120,000
to producer product D
REDUCTION OF PRODUCT A BY 25 % PA
OR
REDUCTION OF PRODUCT C BY 28% PA
THIS IS TO FACILITATE MACHINE TIME FOR PRODUCT D
Product D must cover any loss of profit casused by reduction in volume
require the contributions that the various alternative sales levels of atomisers might make
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