Baldwin has a new design for their product Bill next round that can reduce their material cost of producing units from $8.14 to
1 answer:
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Answer:
The weekly revenue is maximum at x=1.67.
Explanation:
The given function is
.... (1)
where, f(x) is the total revenue at price x.
We need to find the price x at which the weekly revenue is maximum.
The leading coefficient of the given function is -300, which is a negative number. So, it is a downward parabola and vertex of a downward parabola is the the point of maxima.
If a parabola is defined as
... (2)
then the vertex of the function is
From (1) and (2) it is clear that
The given function is maximum at
Therefore the weekly revenue is maximum at x=1.67.
Answer:
$10,400
Explanation:
Given that,
Sales (2,000 units) = $ 40,000
Variable expenses = $24,000
Contribution margin = 16,000
Fixed expenses = 11,200
Net operating income = $ 4,800
If the selling price increases by $4 per unit and the sales volume decreases by 200 units.
Sales:
= Number of units sold × Selling price per unit
= (2,000 - 200) × ($20 + $4)
= 1,800 × $24
= $43,200
Variable expenses:
= $21,600
Contribution margin:
= Sales - Variable cost
= $43,200 - $21,600
= $21,600
Net operating income:
= Contribution margin - Fixed expenses
= $21,600 - $11,200
= $10,400