Given the data below, What is the total revenue, total variable cost,total fixed

Question

Given the data below, What is the total revenue, total variable cost,total fixed cost, and profit for each quantity & price ? What is the elasticity coefficient for each price between $6.50 and $7.50?

Materials $180,000
Labor $ 225,000
Fixed Expenses $45,000
Delivery $30,000
Commissions $ 50,000
Advertising $ 10,000
Travel $5,000
Fixed administrative & selling expenses $15,000

Price Quantity
$8.00, 65,000
$7.75, 75,000
$7.50, 80,000
$7.25, 90,000
$7.00, 100,000
$6.75, 115,000
$6.50, 120,000

Explanation / Answer

Total variable cost=Materials $180,000+Labor $ 225,000+Delivery $30,000+Commissions $ 50,000+Travel $5,000 which equals=490,000 Total fixed cost=Fixed administrative & selling expenses $15,000 +Fixed Expenses $45,000+Advertising $ 10,000=70,000 Profit for each price and quantity is: (price*quantity) price quantity Profit 8 65000 520000 7.75 75000 581250 7.5 80000 600000 7.25 90000 652500 7 100000 700000 6.75 115000 776250 6.5 120000 780000 elasticity is negative change in price/change in quantity price quantity elasticity $7.50, 80,000 -.25/10000=-.000025 $7.25, 90,000 -.25/10000=-.000025 $7.00, 100,000 -.25/10000=-.000025 $6.75, 115,000 -.25/15000=-.0000016 $6.50, 120,000 -.25/5000=-.00005 Hope this helps

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