HW 2 Solution - CSA 273 Solutions to Homework#2 Problem#1...

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Unformatted text preview: CSA 273 Solutions to Homework #2 Problem #1 Let Q = Number of units produced and sold during each time period. P = Selling price per unit. F = Fixed cost per period V = Variable cost per unit per period (a) Break even point = F/(P-V) = $6000/($20-$15) = 1200 units (b) Total Revenue = (2500)*($20) = $50,000 Total cost = F + 2500*V = $6000 + (2500)*($15) = $43,500 Profit = Total Revenue - Total Cost = $50,000-$43,500 = $6,500 (c) Extra profit = 600*($20-$17) = $1800 (d) Extra profit (or loss) of extra 600 units = Profit (or loss) of first 200 +Profit (or loss) of last 400 = 200*($20-$17) + 400 ($10-$17) = $600 - $2800...
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This note was uploaded on 04/17/2008 for the course CSA 273 taught by Professor Patton during the Spring '08 term at Miami University.

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