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mart [117]
3 years ago
8

Wilkes Manufacturing sells one product with a variable unit cost of $18. The company knows that the price charged will affect de

mand. Fixed costs are $275,000. If sales exceed 50,000 units, the company will need to lease additional manufacturing space and equipment at an additional cost of $100,000 per year. The following chart represents the estimated demand at various price levels: Units Demanded Unit Price 25,000 $30 50,000 $28 75,000 $25 100,000 $23 Based on this information which of the following statements is true?a. Selling the units at $23 will generate the largest profit.b. Selling the units at either $23 or $28 will generate a profit of $225,000.c. Selling the units at either $25 or $28 will generate a profit of $225,000.d. Selling the units at $28 will generate the largest profit
Business
1 answer:
Harrizon [31]3 years ago
5 0

Answer:

D. Selling the units at $28 will generate the largest profit.

Explanation:

Explanation : Profit = [ ( selling price per unit - variable cost per unit) * units ] - Fixed Cost

Profit at $28 selling price = [ ($28 - $18) *  50,000 units ] - $275,000 = $225,000

Profit at $23 selling price = [ ($23 - $18) *  100,000 units ] - ($275,000 + $100,000) = $125,000

Profit at $25 selling price = [ ($25 - $18) *  75,000 units ] - ($275,000 + $100,000) = $150,000

Thus we can see that profit is largest at $28 per unit selling price

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Answer:

Check the explanation

Explanation:

The above question is based on a non-linear programming model, to answer this question, there will be a need to determine the optimal order quantities of the three different Ferns with diverse values of annual demand, item cost as well as order cost objective of the non-linear programming model is to minimize the overall annual cost.

Step 1: Setup a spreadsheet on Excel, as shown in the first and second attached images below:

Note: The values of quantities of the three items is kept as 1 to for the calculations of total cost.

The Solver dialogue box will appear. Enter the decision variables, objective function and the constraints, as shown in the third attached image below:

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The era of the marketing evolution  in which  firms begin to focus on what consumers wanted and needed before designing, making, or selling a product is market-oriented era.

<h3>What is the market-oriented era?</h3>

It  should be noted that around the year  1940s when industries realized that focusing only on their business needs  and as a result of this the customers are unsatisfied.

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