Question

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At what quantity is selling either of the products equally profitable (point of indifference i.e. crossover point)? Price/Unit Variable Cost/unit Fixed Cost Product 1 Product 2 68 18 39,000 50 29 20,750 (Answer rounded to 0 decimal points, use standard rounding procedure) Your Answer: Answer Question 12 (1 point) The Simple Exponential Smoothing (SES) forecast with an alpha of.25 for period 4 is: (round to 2 decimal places) Absolute Absolute Percent Squared Error Error Error Naive X(Period) Y(Sales) Forecast Error 1 16 2 10 3 22 4 10 5 15 6 12 Your Answer: MacBook Air

Answer 1

11. Crossover point = (Fixed Cost of product 1 - Fixed cost of Product 2)/ (Variable cost of product 2 - Variable cost ofnrpduct 1)

= (39000 - 20750) / (29 - 18) = 1,659.1 units

12. Forecast for period 4 is 16.38 (using exponential smoothing)

Forecast for period 2 = ( 16 * 0.25) + ( 16 * (1 - 0.25)) = 16

Forecast for period 3 = ( 10 * 0.25) + ( 16 * (1 - 0.25)) = 14.5

Forecast for period 4 = ( 22 * 0.25) + ( 14.5 * (1 - 0.25)) = 16.38