EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN: 9781337514835
Author: MOYER
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Question
Chapter 14.A, Problem 7P
a)
Summary Introduction
To determine: The break even volume in units.
b)
Summary Introduction
To explain: DOL at break-even point conceptually.
Expert Solution & Answer
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Suppose a ceiling fan manufacturer has the total cost function
C(x) = 35x + 1200
and the total revenue function
R(x) = 65x.
(a) What is the equation of the profit function P(x) for this commodity?
P(x) =
(b) What is the profit on 20 units?
P(20) =
Interpret your result.
The total costs are less than the revenue. The total costs are more than the revenue. The total costs are exactly the same as the revenue.
(c) How many fans must be sold to avoid losing money? fans
Suppose that the total cost function, in dollars, for the production of x units of a product is given by the equation shown below.
C(x) = 4,500 + 30x + 0.2x²
Then the average cost of producing x items is represented by the following equation.
total cost
4,500
C(x)
+ 30 + 0.2x
(a) Find the instantaneous rate of change of average cost with respect to the number of units produced, at any level of production.
(b) Find the level of production at which this rate of change equals zero.
X =
(c) At the value found in part (b), find the instantaneous rate of change of cost and find the average cost.
instantaneous rate of change of cost
average cost
What do you notice?
Given the mixed cost function y = $6.50x + $3,000. What does the $6.50 represent?
a.Total cost per unit of the cost driver
b.The fixed cost per unit
c.The slope of the cost function
d.Total fixed costs
Chapter 14 Solutions
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Ch. 14.A - Prob. 1QTDCh. 14.A - Prob. 2QTDCh. 14.A - Prob. 3QTDCh. 14.A - Prob. 2PCh. 14.A - Prob. 3PCh. 14.A - Prob. 4PCh. 14.A - Prob. 5PCh. 14.A - Prob. 6PCh. 14.A - Prob. 7PCh. 14.A - Prob. 8P
Ch. 14 - Prob. 1QTDCh. 14 - Prob. 2QTDCh. 14 - Prob. 3QTDCh. 14 - Prob. 4QTDCh. 14 - Prob. 5QTDCh. 14 - Prob. 6QTDCh. 14 - Prob. 7QTDCh. 14 - Prob. 8QTDCh. 14 - Prob. 9QTDCh. 14 - Prob. 10QTDCh. 14 - Prob. 11QTDCh. 14 - Prob. 1PCh. 14 - Prob. 2PCh. 14 - Prob. 3PCh. 14 - Prob. 4PCh. 14 - Prob. 5PCh. 14 - Prob. 6PCh. 14 - Prob. 7PCh. 14 - Prob. 8PCh. 14 - Prob. 9PCh. 14 - Prob. 10PCh. 14 - Prob. 11PCh. 14 - Prob. 12PCh. 14 - Prob. 13PCh. 14 - Prob. 14PCh. 14 - Prob. 15PCh. 14 - Prob. 16PCh. 14 - Prob. 17PCh. 14 - Prob. 18PCh. 14 - Prob. 19PCh. 14 - Prob. 20PCh. 14 - Prob. 21PCh. 14 - Prob. 22PCh. 14 - Prob. 23PCh. 14 - Prob. 24PCh. 14 - Prob. 25PCh. 14 - Prob. 26PCh. 14 - Prob. 27PCh. 14 - Prob. 28PCh. 14 - Prob. 29PCh. 14 - Prob. 30PCh. 14 - Prob. 31PCh. 14 - Prob. 32PCh. 14 - Prob. 33PCh. 14 - Prob. 34P
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