1. The cost of producing video machines. Includes: a fixed cost of $ 3,000.00 pl

Question

1. The cost of producing video machines. Includes: a fixed cost of $ 3,000.00 plus a variable cost per unit of $ 40.00 per machine. a) Find the total cost to produce # 300 machines. b) Determine the average cost per machine. c) Determine the point of draw (break even point) in quantity (Q) if the machines sell for $ 150.00 each.

2. The Hotel El Politécnico has # 500 rooms. They usually have a cost per room of $ 70.00, plus a fixed cost of $ 5,000.00 per day. Each room is rented for $ 175.00 per day during the summer season. Answer the following questions using the above data:

a) If the Hotel operates at 70% capacity for one day, what is the net profit (gain / loss)?

b) What is the equilibrium point (B. E. P.)? in units, if it operates at full capacity

c) Would you recommend lowering the current price per room to earn $ 40,000, if 20% of the rooms are unoccupied? What would be the new price per room?

d) What should be the variable cost per daily unit to earn $ 30,000.00; at its 80% capacity?

3. You produce 800 daily groceries at a cost per unit of 85 cents. By an oversight he lost 25% of the production. The operation currently has a fixed cost of $ 800.00 and a variable cost per unit of 35 ¢.

a) Determine the new cost per unit considering the loss of production.

b) Determine the new sales price if you want to earn $ 200.00 per day considering the loss.

c) What should be the new variable cost per unit? To be able to lower the new price by 25%; considering the loss.

4. A producer of t-shirts made an elasticity study. It showed that they had a price elasticity of -1.20. He currently sells a monthly average of 75 shirts, when he sells them for $ 30. What should the Sale Price be if you want to sell 85 shirts?

5. The Producer reduces the price of some cookies from 12 to 9 cents. Discover that the quantities sold increased from 200 to 250 units:

a) calculate the price elasticity coefficient for the demand for cookies:

  b) indicate if it is elastic, unitary or inelastic: __________________________

c) delineate the graph

6. If the price elasticity of the University is +20 and the percentage change in price is 25%; What should be the percentage change in number (Q) of students?

7. A new car salesman wants to give a bonus of $ 2,000 for cars that sell for $ 24,000. He found that cars have a price elasticity of +.80. They usually lower the price by 9%. The number of cars sold, in this quarter, will decrease by 10%. Can you give the bonus? What would you recommend, based on the study carried out? Base your answer.

Explanation / Answer

1. a) Total Cost = Fixed Cost + Variable Cost = 3,000 + 40 x Quantity = 3000 + 40 x 300 = 3000 + 12000 = 15000

b) AC = TC/Q = 15000/300 = 50

c) Break even is where TR = TC

PQ = 3000 + 40 x Q

150Q = 3000 + 40Q

110 Q = 3000

Q = 27.3 units

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