the fixed cost for product
Not what you're looking for?
Please show me how to arrive at the correct answers.
Product A:
Selling Price $10
Variable Costs $5
Fixed Costs $2000
Product B:
Selling Price $12
Variable Costs $10.00
Fixed Costs $6
Q.
[a] If these products are sold in the ratio of 4a to 3b, what is break even point?
what about 5a to 5b? In order to maximize profit, which product mix should be pushed?
[b] Assume that product A requireds .5 hour per unit and B requires .25 hour per unit. If both products must go through the same manufacturing machine and there are only 30000 machine hours available per period, which product should be pushed?
A. A=400 units and B=300 units
Aii. A=372 units, B=?
Aiii. A=$5, B=$5
B. Product A
Purchase this Solution
Solution Summary
Determine the fixed cost for product
Solution Preview
Note: Check the question the fixed cost for product B should be $600
A(i)
Calculate contribution margin
=Selling price - variable cost
for each product.
Product A = $10-$5=$5 per unit
Product B = $12-$10=$2 per unit
If products are sold in ratio of 4a to 3b, the contribution margin per unit will be weighted average
$5*4/7+$2*3/7=$26/7
Break even point ...
Purchase this Solution
Free BrainMass Quizzes
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.