Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Question 4. (a) The total fixed costs, FC, for a company follows the normal distribution: FC-N(1200, 100%) The variable costs per unit produced, v, follows
Question 4. (a) The total fixed costs, FC, for a company follows the normal distribution: FC-N(1200, 100%) The variable costs per unit produced, v, follows the probability distribution: v 2 3 4 5 Pr 0.1 0.4 0.4 0.1 The selling price per unit, p, follows the probability distribution: 6 7 8 9 Pr 0.1 0.4 0.4 0.1 The random numbers 0.7673, 0.2493, and 0.5660 are used to simulate FC, V, and p, respectively. Determine the simulated break-even quantity for this company. [& marks] (b) Bowls-R-Us Company manufactures two types of bowling balls: Heavy and Light. The profit margin on a heavy ball is 30 and the profit margin on a light ball is 25. It takes 1 pound or iron ore to make a heavy ball and 0.75 pounds of iron ore to make a light ball. The cost of iron ore is $20 per pound, and the company has no more than 10 pounds of iron are available. The company faces limited staffing which restricts total output to 19 balls. The company has pre-order for 6 heavy and 4 light balls that must be completed. (i) Calculate the maximum profit possible for Bowls-R-Us Company. [10 marks) (ii) If Bowls-R-Us produces only the number of balls that are pre-ordered, determine the slack in iron ore. [2 marks]
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