Question
The CEO's next question is, What level of output would be required to maximize our profit on the Android01? You have calculated the variable cost-per-unit
The CEO's next question is, "What level of output would be required to maximize our profit on the Android01?" You have calculated the variable cost-per-unit for different levels of production. From market research, you have a schedule of prices for these levels. The information is summarized in the table below:
Number of UnitsVariable Cost-per-Unit ($)Sale Price-per-Unit ($)200
60,000
70,000
250
54,000
66,000
300
48,000
64,000
350
46,000
59,000
400
45,000
52,000
A recommendation on output could affect everyone in the company, from management to sales, to the floor manager and assembly line workers! You don't want to get this one wrong so you take some extra time to proof your calculations.
Question 4: Based on profit-maximization analysis, what level of output should you recommend to the CEO?
Before starting your calculations, review materials on profit maximization output.
Submit your Profit-Maximization Output Report and Calculations to the dropbox below. Submit a spreadsheet showing your calculations in Excel and provide a narrative analysis in Word. Your narrative analysis should summarize the results of your analysis and make recommendations for the benefit of the company.
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