Practice_Quiz_Solns_Session9 (Autosaved).xlsx

# Practice_Quiz_Solns_Session9 (Autosaved).xlsx - Q1 A firm...

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Q1 Profit = Revenue - Costs Revenue = Price each * quantity Costs = Fixed Cost + Variable Costs Variable Cost = Variable Cost per unit * number of units At the break even point, Profit = 0 What is the firm's annual profit or loss? Q 1,167,058 Given 1431270 TR \$ 805,640 Given 724868 FC \$ 331,673 Given 373997 VC \$ 0.75 Given 0.6 Capacity 29% 24% Current Q 338,446.82 (.29*1,167,057) 343504.8 TR = Price Per Unit * Quantity -VC Per Unit * Quantity - FC P*Q \$ 805,640.00 Total Revenue 724868 206102.88 TVC \$ 253,835.12 VC Per Unit (Q however is 29% of 1,167,058) FC \$ 331,673 373997 Profit/Loss \$ 220,131.89 144768.12 Profit/Loss \$ 220,132.00 Rounded 144768.12 A firm has the capacity to produce 1,167,058 units of a product each year. At present, it is operating at 29 percent of capacity. The firm's annual revenue is \$805,640. Annual fixed costs are \$331,673 and the variable costs are \$.75 cents per unit. The following equations will be useful.

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Q2 Profit = Revenue - Costs Revenue = Price each * quantity Costs = Fixed Cost + Variable Costs Variable Cost = Variable Cost per unit * number of units At the break even point, Profit = 0 What is the price for each Unit? Q 897,840 Given 661032 TR \$ 647,884 Given 553048 FC \$ 587,785 Given 539643 VC \$ 0.71 Given 0.73 Capacity 20% 28% Current Q 179,568.00 (.29*1,167,057) 185088.96 Profit = PQ - VC*Q - FC Solve for P P =( Profit + VC*Q + FC )/Q Profit/Loss \$ (67,394.28) (TR - VC*Q - FC*Q) -121709.9408 Profit/Loss + VC*Q + FC \$ 647,884.00 553048 Price \$ 3.61 (Profit/Loss + VC*Q + FC) / Q A firm has the capacity to produce 897,840 units of a product each year. At present, it is ope percent of capacity. The firm's annual revenue is \$647,884. Annual fixed costs are \$587,785 variable costs are \$.71 cents per unit. The following equations will be useful.
Given Given Given Given Given Current Q 2.98801182 erating at 20 5 and the

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Q3 Profit = Revenue - Costs Revenue = Price each * quantity Costs = Fixed Cost + Variable Costs Variable Cost = Variable Cost per unit * number of units
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• Spring '17
• VC Per Unit

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