Question

Cost Concepts 01.Khaled has developed a new technology device that is so exciting he is considering...

Cost Concepts

01.Khaled has developed a new technology device that is so exciting he is considering quitting his job in order to produce and market it on a large-scale basis. Khaled will rent a small factory for 1,000dhs per month for production purposes. Utilities will cost 500dhs per month. Khaled has already taken an industrial design course at Dubai Men’s College to help prepare for this venture. The course cost 800dhs. Khaled will rent production equipment at a monthly cost of 3,000dhs. He estimates the material cost per unit will be 20dhs, and the labor cost will be 12dhs per unit. He will hire workers and spend his time promoting the product. To do this he will quit his job which pays 25,000dhs per month. Advertising and promotion will cost 3,500dhs per month.

  1. Calculate the total Fixed cost
  2. Calculate the total variable cost per unit
  3. If the machine max production capacity is 1000 units per month, what is the selling price he should set to break even monthly?
  4. If Khaled to earn a profit equal to his current salary, for how much he should sell the unit?
  5. What is the fixed cost per unit for maximum production?
  6. What is the total variable cost for maximum production?
  7. If Khalid set the selling price for 70DHS and managed to reduce the total fixed cost by 2% what is the profit increase percentage
  8. If Khalid set the selling price for 70DHS and managed to reduce the total variable cost by 2% what is the profit increase percentage
Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
4. A manufacturer plans to produce a new type of T-tool. The variable cost per unit...
4. A manufacturer plans to produce a new type of T-tool. The variable cost per unit is expected to be $78.00 and monthly fixed costs are $2860.00. The unit selling price will be $130.00. Current manufacturing capacity is 75 units per month. Answer the following independent questions. a)How many T-tools have to be sold per month to breakeven? b) The manufacturer hires another worker to keep up with demand and can now produce 513 T-tools per month. Variable costs per...
A manufacturing company of a certain product has a fixed cost of $40 and a variable...
A manufacturing company of a certain product has a fixed cost of $40 and a variable cost of 2x^3+13x, what is the total cost function and the cost to produce 50 of these products? What is the marginal cost when x = 50?                                              At what level of output will average cost per unit be a minimum? What is this minimum?                                                                                               If the demand price for this product is set at d(x) = -x^2+49, determine the amount of production...
Daniel worked at a bank with monthly salary of $2,500. He decided to quit his job...
Daniel worked at a bank with monthly salary of $2,500. He decided to quit his job and open a hotdog shop. He sells 2,000 hotdogs every month and the price of each hotdog is $3 given from the perfectly competitive market. For each month, he pays $2,200 for rent, and $1,600 for variable cost. How much accounting profit does Daniel make every month? How much economic profit does Daniel make every month?
A factory manager is planning for the manufacture of plywood to be sold overseas. The fixed...
A factory manager is planning for the manufacture of plywood to be sold overseas. The fixed cost of operation is estimated at​ $800,000 per month while the variable cost is​ $155 per thousand board feet of plywood. The selling price will depend on how much will be produced and sold and is determined by the​ relationship, price per thousand board​ feet, p​ = $600​ – 0.05D, where D is the amount produced and sold in thousands of board feet. Determine...
he accountant of Alpha Ltd. predicted the following costs for the production of 15.000 wine bottles...
he accountant of Alpha Ltd. predicted the following costs for the production of 15.000 wine bottles (amounts in EUR)    Wine production    9.000 bottles   15.000 bottles   21.000 bottles Variable production cost   ?   45.000   ? Fixed production cost   ?   60.000   ? Variable operating cost   ?   3.000   ? Fixed operating cost   ?   25.000   ? Sales manager predicted the following average selling price per bottle        Sales of wine      9.000 bottles   15.000 bottles   21.000 bottles Selling price for 1lt bottle  ...
Bob is considering opening a bakery that will sell a single type of bread. He is...
Bob is considering opening a bakery that will sell a single type of bread. He is working on a business model and wants to discover whether this venture is financially viable – and when it would become profitable. Here is a breakdown of his financials: Fixed costs (monthly)             Variable costs (per loaf) Selling price (per loaf) Rent $2,500 Flour $0.50 Insurance $250 Water $0.25 Utilities $250 Salt $0.10 Advertising $500 Yeast $0.15 Total $3,500 Total $1 Total     $5 $5...
1. Maize Water is considering introducing a water filtration device for its 20-ounce water bottles. Market...
1. Maize Water is considering introducing a water filtration device for its 20-ounce water bottles. Market research indicates that 1,000,000 units can be sold if the price is no more than $3. If Maize Water decides to produce the filters, it will need to invest $2,000,000 in new production equipment. Maize Water requires a minimum rate of return of 19% on all investments. Determine the target cost per unit for the filter. (Round answer to 2 decimal places, e.g. 10.50.)...
Use the following information for Problems 10-14:  A company produces and sells a product with a monthly...
Use the following information for Problems 10-14:  A company produces and sells a product with a monthly demand estimated to be Q = 500 - 5P, where P is the selling price per unit in dollars. The fixed cost of production is $1,000 per month and the variable cost of production is $20 per unit. Price = __________ at the profit-maximizing quantity. A. $45 B. $60 C. $35 D. $52 E. None of the above
Smart Stream Inc. uses the product cost method of applying the cost-plus approach to product pricing....
Smart Stream Inc. uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 10,000 cell phones are as follows: Variable costs per unit: Fixed costs: Direct materials $150 Factory overhead $350,000 Direct labor 25 Selling and administrative expenses 140,000 Factory overhead 40 Selling and administrative expenses 25 Total variable cost per unit $240 Smart Stream desires a profit equal to a 30% return on invested assets of $1,200,000. a. Determine the...
A company produces a walkie-talkie communications device for use in industrial settings. The fixed cost (CF)...
A company produces a walkie-talkie communications device for use in industrial settings. The fixed cost (CF) is $90,000 per month, and the variable cost (cV) is 115 per unit. The selling price per unit is p = $195 – 0.033(D), in which D is the demand or number of units sold. Determine the optimal volume for this product; that is, the value of demand D at which profit is maximized. (Enter your answer as a number without any units.)
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT