Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN: 9781305506381
Author: James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 8, Problem 1.4CE
To determine
Reason for rejection of order.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Purpoll Oven operates a bakery in Quezon City. Due to its delicious products andstrategic location, there is a 25% increase in their demand last year. However, their customershave not been able to buy the bread of their choice. Meanwhile, additional ovens can’t be addedto the facility due to its size. During the kaizen meeting, a staff suggested a different process toload the oven, making the process more efficient. This process will require manual loading ofbread into the oven, hence additional labor is needed. This is the only this to be changed.Assuming every employee works 192 (24 days per month, 8 hours per day) hours per monthand the bakery makes 2,000 bread per month with a labor productivity of 3.472 bread permanhour, how many workers will the bakery need to add?
Acme Distributors has an annual demand for an airport metal
detector of 1,575 units. The unit cost of a typical detector to
Acme is $333.00. Holding cost is estimated to be 15.5% of the
unit cost, and the ordering cost is $25 per order.
a. What is the optimal order quantity (EOQ), given the current
ordering policy (without price breaks)?
[Select]
b. What is the total cost of the current ordering policy (including
the unit cost? [Select]
If Karen Powell, the owner, orders in quantities of 360 or more she
can get a 5% discount on the cost of the detectors.
c. What price should Acme pay per unit, considering the discount?
$ [Select]
d. What is the total cost at the discounted behavior? $
[Select]
e. What option should Karen Powell choose?
[Select]
A publisher for a promising new novel figures fixed costs (overhead, advances, promotion, copy editing, typesetting, and so on) at $51,000, and variable costs (printing, paper, binding, shipping) at $2.30 for each book produced. With this pricing, 3249 books need to be produced and sold at $18.00 each for the publisher to break even. However, rising prices for paper require an increase in variable costs to $2.80 for each book produced. Use this information to complete parts a. through c.
a) What strategies might the company use to deal with this increase in costs? Choose all that are reasonable. A. Increase the font size of the print in the book. B. Increase the selling price of the book. C. Decrease the fixed costs. D. Find different suppliers to try and lower the variable costs. b). If the company continues to sell books at $18, how many books must they now sell to make a profit? The publisher must produce and sell at least nothing books to make a profit.…
Chapter 8 Solutions
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
Knowledge Booster
Similar questions
- XYZ company can manufacture their own products and sells them. They are able to control the demand by changing the price that is determined by the equation below. The company is thinking of maximizing their profit. The fixed cost is $1,000 per month and the variable cost is $40 per unit. Find the number of units that must be manufactured and sold monthly to maximize profit. (Demand D in the equation is monthly) Hint: Profit = Total Revenue - Total Cost 2,700 5,000 p = $38 + D for D > 1 D2 1 Add filearrow_forwardComplete all of the following definitionsarrow_forwardA publisher for a promising new novel figures fixed costs (overhead, advances, promotion, copy editing, typesetting, and so on) at $64,000, and variable costs (printing, paper, binding, shipping) at $1.80 for each book produced. If the book is sold to distributors for $12 each, how many must be produced and sold for the publisher to break even? The publisher must produce and sell books to break even. (Round to the nearest integer as needed.)arrow_forward
- A large company in the communication and publishing industry has quantified the relationship between the price of one of its products and the demand for this product as Price=160−0.02×Demand for an annual printing of this particular product. The fixed costs per year (i.e., per printing)=$47,000 and the variable cost per unit=$40. What is the maximum profit that can be achieved? What is the unit price at this point of optimal demand? Demand is not expected to be more than 4,000 units per year. The maximum profit that can be achieved is $? (Round to the nearest dollar.) The unit price at the point of optimal demand is $? per unit. arrow_forwardThe demand function of “İsot Capsicum Biber Komandit Şirketi" of Ceylanpınar is: p = 1000 e 2q where "p" is price in TL/kg and “q" is quantity sold in kg/min. Mr. Davut Tenorses, who is the COO of this company informs you that they export to hundreds of countries around the world and that they are operating 3 shifts a day for 30 days/month at maximum profit and wants you to find the cost function of his company in TL/month.arrow_forwardHand written solutions are strictly prohibittedarrow_forward
- Ace Shoe Company sells heel replacement kits for men's shoes. It has fixed costs of $10 million and unit variable costs of $5 per pair. If the company charges $15 per pair, how many pairs must it sell to break even ? And what dollar profit level would the company achieve if 15 million kits were sold ? Please show the necessary steps of how to get the results.arrow_forwardTOTAL PROFITS UP OR DOWN? Kiran's Kandles sells a bathroom candle set for $37.25. The variable cost of components for this set is going up. Kiran's intends to respond by raising its selling price by 5.1%. Kiran's believes that price elasticity of demand at the original price is -2.4. Given the changes in price and variable cost, Kiran's calculated a percent profit breakeven of +13.5%, Will Kiran's total profits on this candle set GO UP OR GO DOWN after these changes? EXPLAINHOW YOU KNOW.arrow_forwardneed help with this question Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.arrow_forward
- FG Manufacturers wants to determine the effectiveness of their pricing decisions for their product Lylo. As a consultant, you have been asked to develop cost functions that will assist in arriving at the optimal price that will enable the company to maximize profits. During the year, you were provided with the following demand and costs functions for the product: P = 400 – 6Q; where P is the unit selling price and Q is quantity in thousands of units. TC = 8Q2 + 36Q + 150; where TC is total cost in thousands of dollars. Determine the optimal sales revenue. Calculate the maximum profit. Briefly outline two (2) factors to be considered by managementswhen pricing decisions are being made.arrow_forwardPixie 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)arrow_forwardPlease answer with details on how to do it. A small company manufactures a certain product. Variable costs are $20 per unit and fixed costs are $10,875. The price demand relationship for this product is P = -0.25D + 250, where P is the unit sales price of the product and D is the annual demand. Total cost = fixed cost + Variable cost, TC = CF + CV Revenue = Demand x Price, TR = D x P Profit = Total Revenue – Total Cost, P = TR – TC a) Develop the equations for the total cost and total revenue. Find the breakeven quantity c) How many units must be sold to maximize profit? What is the company’s maximum profit?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Managerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning