{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

managerial economics_1 - 1 You are the advisor of Victory...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
1. You are the advisor of Victory Car, a company that provides partially assembled automobile components to Vanguard, a major automobile manufacturer. They have just received a rush order from Vanguard, offering to pay $160 per unit for the first 500 units, and $120 per unit thereafter. In your initial interviews of the management and the workers of Victory Car, you have collected the following information: - The cost structure of our plant involves fixed costs of $30,000 per month, plus variable costs for assembly; - Victory Car’s variable costs are the following: a. What would be your recommendations to the company? Remember to explain how many units Victory Car should produce (assuming that you can only produce a multiple of 100 and that the rush order is Victory Car’s only production) and at what profits/loss. Do make a table outlining the costs of the firm. Units Variable Cost Total Cost Total Revenue Total Profit Average Profit Marginal Profit 100 5000 35000 16000 -19000 -19000 - 200 15000 45000 32000 -13000 -6500 6000 300 24000 54000 48000 -6000 -2000 7000 400 33000 63000 64000 1000 250 7000 500 43000 73000 80000 7000 1400 6000 600
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern