Answer:
(a) Volume at location A = 16,625
Volume at location B = 17,219
Volume at location C = 17,531
(b) Profit of location A = $2,650
Profit of location B = $2,975
Profit of location C = $3,125
Explanation:
(a) Let the volume at each location be represented by v
Location A
Profit = revenue - total expenditure
8,250 = 2v - (1.2v + 5,050)
8,250 = 2v - 1.2v - 5,050
0.8v = 8,250 + 5,050 = 13,300
v = 13,300/0.8 = 16,625
Location B
Profit = revenue - total expenditure
8,250 = 2v - (1.2v + 5,525)
8,250 = 2v - 1.2v - 5,525
0.8v = 8,250 + 5,525 = 13,775
v = 13,775/0.8 = 17,219 (to the nearest whole number)
Location C
Profit = revenue - total expenditure
8,250 = 2v - (1.2v + 5,775)
8,250 = 2v - 1.2v - 5,775
0.8v = 8,250 + 5,775 = 14,025
v = 14,025/0.8 = 17,531 (to the nearest whole number)
(b) Location A
Profit = sales - total expenditure = 19,250 - (1.2×9,625 + 5,050) = 19,250 - 16,600 = $2,650
Location B
Profit = sales - total expenditure = 21,250 - (1.2×10,625 + 5,525) = 21,250 - 18,275 = $2,975
Location C
Profit = sales - total revenue = 22,250 - (1.2×11,125 + 5,775) = 22,250 - 19,125 = $3,125
