Purchase Solution

Selling Price

Not what you're looking for?

Ask Custom Question

Larry Jacava is considering producing a novelty item for golfers that will be sold through pro shops. Larry has decided on a selling price of $3.50 for the item. The item's variable cost of production is $2.00 per unit with a fixed cost of $3,750. Larry has marketed his production to local pro shops and believes the demand for the item will be either 2,000 units, 3,000 units, 4,000 units, or 5,000 units.
a) Set up the payoff table for Larry's decision. Determine the number of units that Larry should produced using each of the following criteria.
b) Maximax criteria.
c) Maximim criteria
d) Minimax regret criteria.( for this please set up an opportunity loss table , please state clearly which action Larry should take based on each of the three decision criteria)

Purchase this Solution
Solution Summary

Larry Jacava is considering producing a novelty item for golfers that will be sold through pro shops. Larry has decided on a selling price of $3.50 for the item. The item's variable cost of production is $2.00 per unit with a fixed cost of $3,750. Larry has marketed his production to local pro shops and believes the demand for the item will be either 2,000 units, 3,000 units, 4,000 units, or 5,000 units.
a) Set up the payoff table for Larry's decision. Determine the number of units that Larry should produced using each of the following criteria.
b) Maximax criteria.
c) Maximim criteria
d) Minimax regret criteria.( for this please set up an opportunity loss table , please state clearly which action Larry should take based on each of the three decision criteria)

Purchase this Solution
Free BrainMass Quizzes
Terms and Definitions for Statistics

This quiz covers basic terms and definitions of statistics.

Know Your Statistical Concepts

Each question is a choice-summary multiple choice question that presents you with a statistical concept and then 4 numbered statements. You must decide which (if any) of the numbered statements is/are true as they relate to the statistical concept.

Measures of Central Tendency

This quiz evaluates the students understanding of the measures of central tendency seen in statistics. This quiz is specifically designed to incorporate the measures of central tendency as they relate to psychological research.

Measures of Central Tendency

Tests knowledge of the three main measures of central tendency, including some simple calculation questions.

View More Free Quizzes
Related BrainMass Solutions

  • Selling Price

    (VAE) $25.00 Total variable cost = $114 The contribution margin should be 35% We get (Selling Price - 114)/Selling Price = 0.35 Selling Price - 114 = 0.35 Selling Price Selling Price = 114/(1-0.35) = $175.38 The solution explains how to calculate

  • Calculating Units Necessary for a Certain Net Operating Income

    5% of selling price Administrative expenses: $3000.00 plus 20% of selling price The number of units needed to achieve a target net operating income of 99,900 would be ...?

  • Range of the selling price for car selling and inequality

    93118 Range of the selling price for car selling and inequality Ronald wants to sell his car through a broker who charges a commission of 10% of the selling price. Ronald still owes $11,025 on the car.

  • Statistics, Selling Price & Real Estate Property Questions

    The relationship between the two variables, living area and selling price, is such that a decrease in living area is accompanied by a decrease in selling price. 8.

  • Calculating Regression line

    (A) Calculate the sample regression line, where sales is the dependent variable and selling expenses and price are the independent variable (B) Forecast the company's sales if the company increases its selling expenses to $10 million and its price

  • CVP Analysis-Break even sales

    Assume no change in selling price; find net income if activity volume increases 10%. 5. Given: Selling price per unit, $40; total fixed expenses, $80,000; variable expenses per unit, $30.

  • Anna & Anna Corporation

    Total variable cost per unit = 45 + 20 + 24 + 25 = 114 Contribution margin ratio = 1 - (Total variable cost per unit /Selling price) 0.35 = 1 - (114/Selling price) -0.65 = - (114/Selling price) Selling price = $175.38 This solution is comprised

  • Transfer prices and divisional profits

    If the transfer price is $150, then Selling price of framing division=Transfer price=$150 per unit Cost of framing division=$100 per unit Volume=5000 chairs Profit of Framing division=(Selling Price-Cost)*Volume=(150-100)*5000 =$250,000 Selling

  • Regression analysis problems

    Find the line of best fit for estimating the selling price given the acreage. Sketch the line on the same scatter diagram. c. Estimate the selling price for a 1.7-acre piece of land. d.

  • Changes in operating income.

    in 2005/Price of input in 2005 - Price of output in 2004/Price of input in 2004) /(Price of output in 2004/Price of input in 2004) Price recovery in material costs= ( 59 / 41 - 60 / 40) / (60 / 40)= -4.0650% Price recovery in selling

View More Related Solutions