Ask Experts Questions for FREE Help !
Ask

Math Help!

Asked Feb 17, 2012, 06:11 PM — 1 Answer
If anyone could help me with these questions it would be greatly appreciated. Also if you could provide a step by step of how you got the answers that would be great!

Engineering estimates indicate that the variable cost of manufacturing a new product will be $35 per unit. Based on market research, the selling price of the product is to be $72 per unit and there is an additional selling expense which is estimated to cost the company $10 per unit. The fixed costs applicable to this new product are budgeted at $4,800 per period and the initial production capacity is 430 units. Given this information determine the following:

a) The income at a sales volume of 70 units.
b) The profit or loss at a volume of 30% of capacity.
c) The net income assuming total sales of $23,400.
d) The number of units that must be sold to achieve a net income of at least $5,000.

1 Answer
gevatter's Avatar
gevatter Posts: 6, Reputation: 10
New Member
 
#2

Feb 18, 2012, 04:48 AM
a) We sold 70 Units, so 70 * 72$(Sale Prize) = 5040$ So our income for 70 Units is 5040$

b) 30% of 430 Max Capacity = 430 / 100 *30 = 129 Units

First we get our income (like "a"): 129 * 72$(Sale Prize) = 9288$

Second we need our production costs for 129 Units: $35 + 10$ = "45$ production costs per unit"

129 * 45$ = 5805$ Production costs for 129 Units

Next Fixed Costs for the whole Production + Production Costs for 129 Units

4800$ + 5802$ = 10605$

So the profit / loss for selling and production of 129 Unit (30%) is = 9288$ Income - 10605$ Production Costs

= -1317$ Loss


C) Net Income assuming total sales of $23,400

First Income divided with sale prize for one unit

23400$ / 72$ = 325 Units

This means we sold 325 Units to get an income of 23400$ now we need the NET Income for 325 Units:

325 * 45$ (production costs per unit) = 14625$ + Fixed Costs 4800$ = 19425$ Costs for the Whole Production

So the Net Income is: 23400$ - 19425$ = 3975$ NET INCOME


d) we need to achieve a Net Income of 5000$

First we need the net income for one unit without the fixed costs:

72$(sale prize) - 45$(production costs per unit) = 27$

Now we can say :

x*27 - 4800 = 5000 |+4800
x*27 = 9800 | /27
x = 362,96... ~ 363 Units

So we need at least 363 Units to achieve a Net Income of 5000$, because: 363 Units * 27$ (72$-45$) = 9801$ - Fixed Costs(4800$) = 5001$ Net Income!!!

Helpful  (1)

Not your question? Ask your question View similar questions

 
Thread Tools Search this Thread
Search this Thread:

Advanced Search

Add your answer here.

Remove Text Formatting

Undo
Redo
 
Decrease Size
Increase Size
Bold
Italic
Underline
Align Left
Align Center
Align Right
Ordered List
Unordered List
Decrease Indent
Increase Indent
Insert Email Link
Wrap [QUOTE] tags around selected text
Wrap [CODE] tags around selected text
Wrap [HTML] tags around selected text
Wrap [PHP] tags around selected text
Wrap [YOUTUBE] tags around selected text
Notification Type:



Check out some similar questions!

?Math 110-finite math [ 1 Answers ]

A company's computer must consist of 4 letters with no repetition. How many passwords are possible?

To take math or not to take math? Warning:long [ 7 Answers ]

Hey I need some advice. I'm currently a high school junior, and I am HOPELESS at mathematics. I've always managed to scrape by with 65s, and trust me its not lack of effort, I try really hard. All my other grades are over 90s, with the exception of sciences which are in the high 80s. Last year I...

Which math is easier- college algbera or liberal arts math? [ 2 Answers ]

What math is easier- college algbera or liberal arts math?

I need math skills on this math problems [ 6 Answers ]

81 divided by 3726.83 divided by 3158


View more Mathematics questions Search