Your University magazine, The Indus Magazine, has fixed production costs of Rs.1.5 million per edition, and printing and distribution costs of Rs.80/copy. The Indus Magazine sells for Rs.150/copy. (8 Marks) a. Write down the associated cost, revenue, and profit functions. b. What profit (or loss) results from the sale of 1000 copies of The Indus Magazine? c. How many copies should be sold in order to break even?

Your University magazine, The Indus Magazine, has fixed production costs of Rs.1.5 million per edition, and printing and distribution costs of Rs.80/copy. The Indus Magazine sells for Rs.150/copy. (8 Marks) a. Write down the associated cost, revenue, and profit functions. b. What profit (or loss) results from the sale of 1000 copies of The Indus Magazine? c. How many copies should be sold in order to break even?

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

See similar textbooks

Similar questions

(a) The production department of a fim reported the following information for the month of January 2020. Items Rs Wage Bill Raw material used Fuel Consumption Interest Rent Units of output used 25,000 65000 5000 4000 10000 2000 Units (1) Calculate the average cost and average variable cost of the firm. (ii) What would be the total profit of the firm if it sells the entire output at a price of Rs 62 per unit? (ii) Explain why profit is maximised at output level where MC = MR?
If the seller manufacturing the books with costing $10 per book. the seller sells 500 books at a price of 100 per book. What is the total revenue of seller and its profits.
Break even point analysis 1. A manufacturing business that is involved in manufacturing and selling a single product. The annual fixed expenses to run the business are $15000 and variable expenses are $7.50 per unit. The sale price of your product is $15 per unit. A. Formulate the total revenue, total cost, and profit B. Find the break-even point quantity and revenue. C. Find the number of units to sell if the estimated profit is $50,000 D. Find the total profit if the total units sold is 5000 units. E. Find the units to sell to break-even the fixed expenses. 2. It costs a publishing company 50,000 dollars to make books. The 50,000 is a fixed cost or cost that cannot change. To help the publishing company sell the books, how many books should they sell to break even? 3. A manufacturing company supplies its products to construction job sites. The average monthly fixed cost pee site is $4,500, while each unit cost $35 to produce and selling price is $50 per unit.Determine the…
10. Smart Phones, Inc. buys one model of smartphone, paying $2370 per case of 20 phones. Find the asking price for each assuming a 40% markup on cost.
Pixie Arts and Graphics, a medium scale printing press business has determined the equation that describes the relationship of the price and demand of one of its products as Price=150 - 0.01•D (D as Demand per unit) for an annual printing of this product. The fixed costs annually = P50,000 and the variable cost = P40 per unit. Requirement: a. What is the maximum profit that can be earned? b. What is the unit price at this point of optimal demand if demand is not to be anticipated to exceed more than 6,000 units annually? Hint: Profit (loss) = total revenue – total costs = (aD – bD²) – (Cf + CyD)
1. A large wood products company is negotiating a contract to sell plywood overseas. The fixed cost that can be allocated to the production of plywood is $600,000 per month. The variable cost per thousand board feet is $125.50. The price charged will be determined byp = $550 – (0.4)D per 1.00 board feet. a. For this situation, determine the optimal monthly sales volume for this product and calculate the profit (or loss) at the optimal volume. b. What is the domain of profitable demand during a month?
ВЕР The world price of Zinc has increased to the point where "moth balled" zinc mines in East Tennessee have been reopened because of their potential profitability. a. What is the breakeven point when zinc sells for $1.00 per pound? There are variable costs of $30 million at 100% capacity (20,000 tons) and fixed costs of $7 million per year. b. What is the estimated annual profit for a mine producing 20,000 tons per year (which is 100% capacity)? c. If production is only 15,000 tons per year, will the mine be profitable? What is the profit or loss at this production level? Note: 1 ton = 2,000 pounds
If the seller manufacturing the books with costing $10 per book. the seller sells 500 books at a price of 100 per book. What is the total revenue of seller.
1. The cost-revenue data for a manufacturing company Item Cost or Revenue Selling price $85/unit Material and maintenance $25/unit Direct Labor cost $20 /unit Other costs /unit =70% of the labor cost/unit Find it out All fixed costs $130,000 1. Find the break-even quantity 2. If marginal cost beyond the break-even quantity, to 7000 units is $40/unit, what is the average cost to make 6000 units? (round the value. no decimal)
IIT Ball Bearings Inc. faces costs of production as follows: Quantity Total Fixed Cost Total Variable Cost 100 100 100 100 100 100 100 1 50 70 90 140 200 360 3 4 5 (A) Calculate the company's average fixed costs, average variable costs, average total costs, and marginal costs. (B) The price of a case of ball bearings is $50. Seeing that she can't make a profit, the Chief Executive Officer (CEO) decides to shut down Operations. What are the firm's profits/ losses? Was this a wise decision? Explain. (C) Vaguely remembering his introductory economics course, the Chief Financial Officer Tells the CEO it is better to produce 1 case of ball bearings, because marginal revenue equals marginal cost at that quantity. What are the firm's profits/losses at that level of production? Was this the best decision? Explain
Find the Total Cost, Marginal Cost, Total Revenue, Marginal Revenue, and Profit/Loss. Q TFC TVC TC MC TR MC PROFIT/LOSS 0 400 0 100 400 50 200 400 100 300 400 130 400 400 180 500 400 220 600 400 350 700 400 450 800 400 600 price of steel is P150/unit
1. A chemical company produces sodium bisulfate in 100-pound bags. Demand for the product is 40 tons per day. The capacity for production is 80 tons per day. Setup cost is $140, and storage and handling costs are $15 per ton per year, and company incurs fixed cost of $10,000, the firm operates 250 days per year. (Note: 1 ton = 1,000 kilo grams)Required:a. What is the annual demand in tons?b. What is the economic production quantity of the company?c. What is the average fixed cost of producing 20,000 tones?d. What is the variable cost of producing 20,000 tones?