A manufacturer of cassette tapes expects a fixed cost of $55,000. It plans to work on the margin of forty-six percent of retail, and to incur other variable costs of $0.4 per cassette. The selling price per cassette is $6 dollar. i. Find the revenue, cost, and profit functions using q for a number of cassettes. ii. How much profit will be earned if 25000 cassettes are produced? iii. Construct the break-even chart. Label the cost & revenue lines, the fixed cost line, and the break-even point.
A manufacturer of cassette tapes expects a fixed cost of $55,000. It plans to work on the margin of forty-six percent of retail, and to incur other variable costs of $0.4 per cassette. The selling price per cassette is $6 dollar. i. Find the revenue, cost, and profit functions using q for a number of cassettes. ii. How much profit will be earned if 25000 cassettes are produced? iii. Construct the break-even chart. Label the cost & revenue lines, the fixed cost line, and the break-even point.
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter5: Investment Decisions: Look Ahead And Reason Back
Section: Chapter Questions
Problem 5.1IP
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A manufacturer of cassette tapes expects a fixed cost of $55,000. It plans to work on
the margin of forty-six percent of retail, and to incur other variable costs of $0.4 per cassette.
The selling price per cassette is $6 dollar.
i. Find the revenue, cost, and profit functions using q for a number of cassettes.
ii. How much profit will be earned if 25000 cassettes are produced?
iii. Construct the break-even chart. Label the cost & revenue lines, the fixed cost line, and the break-even point.
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