As a recent graduate of this college you have landed a job in production managem

ID: 1210033 • Letter: A

Question

As a recent graduate of this college you have landed a job in production management for Universal Clones, Inc. You are responsible for the entire company on weekends. Your costs are shown below:

Your current level of production is 500 units. All 500 units have been ordered by your regular customers. The phone rings. It’s a new customer who wants to buy one unit of your product. This means you would have to increase production to 501 units. Your new customer offers you $450 to produce the extra unit. (You have to show your calculation to receive credits)

(A). Should you accept this offer?

(B). What is the net change in the firm’s profit?

Quantity Average toal cost 500 200 501 201

Explanation / Answer

a) No I will not accept this offer.Beacause if I do so then there will be a loss ofv $261.

b) The net change in the firm's profit is $-261.

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As a recent graduate of this college you have landed a job in production managem

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