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The total cost function for SUNNY Enterprises is c(x)=x^3−13x^2+40^x, where is the number of units produced (in hundreds). At what production level does the average production cost equal to zero?
A. 0, 500, 800
B. 500, 800
C. 0, 400, 900
D. 400
E. 400, 900
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Kyerewaa Ventures is a manufacturing company in the business of producing beverage cans for clients in the brewery industry. The weekly total cost to produce x cans is given by:
The demand function for the cans is given by:
The company has set a production limit to 10,000 cans and it sells all the cans that are produced.
Required:
i) Derive an expression for marginal cost, marginal revenue, and marginal profit. (4 marks)
ii) Determine the cost, revenue, and profit when the 2,501st can is produced and sold. (3 marks)
iii) Determine the cost, revenue, and profit when the 7,501st can is produced and sold. (3 marks)
iv) Advise the company whether to produce the 2,501st can or the 7,501st can. (2 marks)
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The AXM manufacturing company has determined that the cost function for producing a particular type of pavement block is given by:
Where x is measured in number of units and in GH¢.
Required:
i) Calculate the derivative of with respect to .
(5 marks)
ii) Determine how quickly the cost is changing at x=1000
(4 marks)
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Find Related Questions by Tags, levels, etc.
Komosa Ltd is reviewing the selling price of its product for the coming year. A forecast of the annual costs that would be incurred by Komosa Ltd in respect of this product at differing activity levels is as follows:
| Annual production (unit) | 100,000 | 160,000 | 200,000 |
|---|---|---|---|
| Direct materials (GH¢000) | 200 | 320 | 400 |
| Direct labour (GH¢000) | 600 | 960 | 1,200 |
| Overhead (GH¢000) | 880 | 1,228 | 1,460 |
The cost behavior represented in the above forecast will apply for the whole range of output up to 300,000 units per annum of this product.
Required:
i) Calculate the total variable cost per unit and total fixed overhead. (4 marks)
ii) State the total cost function. (1 mark)
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a) Takyi Carpentry makes twin-desk for local schools in the Daboase District. To facilitate control, the owner of the shop has asked you to assist him in analysing cost into fixed and variable elements.
Below is his six-year financial information:
| Year | No. of Twin-Desk | Revenue (GH¢) | Profit (GH¢) |
|---|---|---|---|
| 2016 | 1,800 | 19,600 | 6,000 |
| 2017 | 1,700 | 22,000 | 6,200 |
| 2018 | 1,750 | 20,300 | 5,800 |
| 2019 | 2,100 | 26,200 | 8,000 |
| 2020 | 1,950 | 22,400 | 7,500 |
| 2021 | 2,050 | 21,800 | 6,800 |
Required: i) Establish total cost function using high-low method. (5 marks)
ii) Calculate profit for making 3,500 units of the twin-desk if the selling price is fixed at GH¢20. (3 marks)
iii) Identify TWO (2) advantages and TWO (2) disadvantages of using high-low method. (4 marks)
iv) Identify THREE (3) importance for classifying cost as fixed and variable. (3 marks)
b) For managers within a company, exercising control through standards and standard costing is a creative program aimed at determining whether the organisations’ resources are being used optimally. Standard costs are typically determined during the budgetary control process because it uses predetermined standard costs for direct material, direct labour and factory overheads.
Required: Explain THREE (3) benefits to a company that uses standard costing. (5 marks)
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Find Related Questions by Tags, levels, etc.
The total cost function for SUNNY Enterprises is c(x)=x^3−13x^2+40^x, where is the number of units produced (in hundreds). At what production level does the average production cost equal to zero?
A. 0, 500, 800
B. 500, 800
C. 0, 400, 900
D. 400
E. 400, 900
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Kyerewaa Ventures is a manufacturing company in the business of producing beverage cans for clients in the brewery industry. The weekly total cost to produce x cans is given by:
The demand function for the cans is given by:
The company has set a production limit to 10,000 cans and it sells all the cans that are produced.
Required:
i) Derive an expression for marginal cost, marginal revenue, and marginal profit. (4 marks)
ii) Determine the cost, revenue, and profit when the 2,501st can is produced and sold. (3 marks)
iii) Determine the cost, revenue, and profit when the 7,501st can is produced and sold. (3 marks)
iv) Advise the company whether to produce the 2,501st can or the 7,501st can. (2 marks)
Find Related Questions by Tags, levels, etc.
The AXM manufacturing company has determined that the cost function for producing a particular type of pavement block is given by:
Where x is measured in number of units and in GH¢.
Required:
i) Calculate the derivative of with respect to .
(5 marks)
ii) Determine how quickly the cost is changing at x=1000
(4 marks)
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
Komosa Ltd is reviewing the selling price of its product for the coming year. A forecast of the annual costs that would be incurred by Komosa Ltd in respect of this product at differing activity levels is as follows:
| Annual production (unit) | 100,000 | 160,000 | 200,000 |
|---|---|---|---|
| Direct materials (GH¢000) | 200 | 320 | 400 |
| Direct labour (GH¢000) | 600 | 960 | 1,200 |
| Overhead (GH¢000) | 880 | 1,228 | 1,460 |
The cost behavior represented in the above forecast will apply for the whole range of output up to 300,000 units per annum of this product.
Required:
i) Calculate the total variable cost per unit and total fixed overhead. (4 marks)
ii) State the total cost function. (1 mark)
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a) Takyi Carpentry makes twin-desk for local schools in the Daboase District. To facilitate control, the owner of the shop has asked you to assist him in analysing cost into fixed and variable elements.
Below is his six-year financial information:
| Year | No. of Twin-Desk | Revenue (GH¢) | Profit (GH¢) |
|---|---|---|---|
| 2016 | 1,800 | 19,600 | 6,000 |
| 2017 | 1,700 | 22,000 | 6,200 |
| 2018 | 1,750 | 20,300 | 5,800 |
| 2019 | 2,100 | 26,200 | 8,000 |
| 2020 | 1,950 | 22,400 | 7,500 |
| 2021 | 2,050 | 21,800 | 6,800 |
Required: i) Establish total cost function using high-low method. (5 marks)
ii) Calculate profit for making 3,500 units of the twin-desk if the selling price is fixed at GH¢20. (3 marks)
iii) Identify TWO (2) advantages and TWO (2) disadvantages of using high-low method. (4 marks)
iv) Identify THREE (3) importance for classifying cost as fixed and variable. (3 marks)
b) For managers within a company, exercising control through standards and standard costing is a creative program aimed at determining whether the organisations’ resources are being used optimally. Standard costs are typically determined during the budgetary control process because it uses predetermined standard costs for direct material, direct labour and factory overheads.
Required: Explain THREE (3) benefits to a company that uses standard costing. (5 marks)
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