Suppose you have a company that produces and sells shoes:The cost of producing 6,000 pairs of shoes is $81,500 and 16,000 pairs of shoes for $165,000. each pair produced can be sold for $21;There is a website where your shoes can be viewed. The traffic on website is a variable amount, and each view view generates $0.005;The employees are paid 15% of the profit function;The director wants monthly deposits to save $5,000,000 at 5.10% in 30 years; andAdditional money is saved for your position for only the first month. You want to make $250,000 at 5.70% compounded continuously for 20 years.Leading Question: How would you represent the above situation?Suppose in the first month, you sold 10,000 pairs of shoes, and half a million views on the website. What is the first month's outcome?How does the second month's model differ from the first month?Suppose for the second month, you had zero views on the website. Find how many shoes are needed to break even for the second month's model.Suppose in the third month, business is going well. Each pair of shoes can now be sold for $30. How does this change your model? You may show by altering your mathematical model or describe in words.

Given: To explain the first 2 question and post the remaining in the next submission as, Here, the…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Suppose you have a company that produces and sells shoes:

The cost of producing 6,000 pairs of shoes is $81,500 and 16,000 pairs of shoes for $165,000. each pair produced can be sold for $21;
There is a website where your shoes can be viewed. The traffic on website is a variable amount, and each view view generates $0.005;
The employees are paid 15% of the profit function;
The director wants monthly deposits to save $5,000,000 at 5.10% in 30 years; and
Additional money is saved for your position for only the first month. You want to make $250,000 at 5.70% compounded continuously for 20 years.

Leading Question: How would you represent the above situation?

Suppose in the first month, you sold 10,000 pairs of shoes, and half a million views on the website. What is the first month's outcome?
How does the second month's model differ from the first month?
Suppose for the second month, you had zero views on the website. Find how many shoes are needed to break even for the second month's model.
Suppose in the third month, business is going well. Each pair of shoes can now be sold for $30. How does this change your model? You may show by altering your mathematical model or describe in words.

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