Question

Q12) Manufacturer can sell 4500 items with a price 2$ for every 15 cents the price lower than 2$ and will be able to sell another 900 items. the marginal cost per unit items is 0.7$. the total fixed costs is 1800$ Your answer Q12 A) the nmber of items for maximum profit is 7150 5710 6150 5610 other Q12 B) The new price for maximum profit is 1.825 1.652 1.625 1.528 other !

Answer 1

Answer:

12

particulars	sell 4500
sales	$9000
Less: VC (0.7*4500)	$3150
Contribution	$5850
Less: Fixed cost	$1800
Net Profit	$4050

PV Ratio =Contribution / sales

=5850/9000

=65%

BEP =Fixed cost /PV ratio

BEP =1800/65%

BEP =$2769

Maximum Profit =5400 unit =(4500+900) Bcause of BEP Alrady coverd fixed cost.

New price =$2-0.15 =$1.85