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A manufacturer determines that the firm’s Marginal Cost (MC) and Marginal Revenue (MR) functions are:
MC=C′(x) = 100 − 0.1x
MR = R′(x)=100 + 0.1x
You are required to find the:
a. Change in revenue that results when the sales level increases from 20 to 30 units. (5 Marks)
b. Revenue resulting from the sale of 30 units. (5 Marks)
c. Cost of producing 30 units if the fixed cost (at x=0x = 0) is N400. (5 Marks)
d. Total profit when 30 units of the product are sold. (5 Marks)
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If an asset can be replaced at the same cost and there is no time value of money, then the problem of obtaining the optimal replacement interval involves the following EXCEPT:
A. Finding the cumulative operating/maintenance cost
B. Finding the total depreciation
C. Adding (A) and (B) above to get total cost
D. Finding the year at which marginal cost is minimized
E. Finding the year at which average cost is minimum
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Tetpack Nigerian Limited (TNL) produces various types of packaging products for the food industry. TNL has just introduced a new type of pack, and its marketing manager is considering how to penetrate the market with the pack. The following pricing strategies have been suggested:
i. Market skimming price
ii. Market penetration price
iii. Full cost plus price
iv. Return on investment price
v. Marginal cost plus price
The management accountant has provided the following data about the pack:
Required:
a. Discuss the above pricing methods and advise when each could be used. (10 Marks)
b. Calculate what the price of the pack should be if its price is based on:
i. Full cost plus pricing (1½ Marks)
ii. Marginal cost plus pricing (1½ Marks)
iii. Return on investment pricing (2 Marks)
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A company manufactures a single product with a sales price of N1,000 and a marginal cost of N650. If the fixed cost is N685,300 per annum, then the number of units required to Break Even is:
A. 1,950
B. 1,955
C. 1,958
D. 1,985
E. 1,988
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a) If the total cost (in Ghana cedis) of producing xx items is given by the function C (x) = 2600 + 2x + 
Required:
i) Calculate the total cost, average cost, and marginal cost of producing 5000 items. (6 marks)
ii) Determine the production level at which the average cost will be the lowest. (4 marks)
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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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At the Zee manufacturing company, the marginal cost for producing x gears, measured in hundreds, is:
If the fixed cost (the cost of producing zero items) is GH¢3000:
Required:
Determine the total cost for manufacturing 5000 gears.
(11 marks)
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a) The marginal revenue function of a manufacturing company is given by:
The marginal cost function is given by:
Let x be the number of items either produced or sold.
Required:
i) Calculate the revenue generated when 50 items are sold. (2 marks)
ii) Calculate the number of items that will yield maximum revenue. (4 marks)
iii) Calculate the total revenue if 100 items are produced. (4 marks)
iv) Calculate the total profit for the 100 items. (4 marks)
v) If a tax of 20% is imposed on each item produced, find the cost of 100 items. (6 marks)
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Find Related Questions by Tags, levels, etc.
A manufacturer determines that the firm’s Marginal Cost (MC) and Marginal Revenue (MR) functions are:
MC=C′(x) = 100 − 0.1x
MR = R′(x)=100 + 0.1x
You are required to find the:
a. Change in revenue that results when the sales level increases from 20 to 30 units. (5 Marks)
b. Revenue resulting from the sale of 30 units. (5 Marks)
c. Cost of producing 30 units if the fixed cost (at x=0x = 0) is N400. (5 Marks)
d. Total profit when 30 units of the product are sold. (5 Marks)
Find Related Questions by Tags, levels, etc.
If an asset can be replaced at the same cost and there is no time value of money, then the problem of obtaining the optimal replacement interval involves the following EXCEPT:
A. Finding the cumulative operating/maintenance cost
B. Finding the total depreciation
C. Adding (A) and (B) above to get total cost
D. Finding the year at which marginal cost is minimized
E. Finding the year at which average cost is minimum
Find Related Questions by Tags, levels, etc.
Tetpack Nigerian Limited (TNL) produces various types of packaging products for the food industry. TNL has just introduced a new type of pack, and its marketing manager is considering how to penetrate the market with the pack. The following pricing strategies have been suggested:
i. Market skimming price
ii. Market penetration price
iii. Full cost plus price
iv. Return on investment price
v. Marginal cost plus price
The management accountant has provided the following data about the pack:
Required:
a. Discuss the above pricing methods and advise when each could be used. (10 Marks)
b. Calculate what the price of the pack should be if its price is based on:
i. Full cost plus pricing (1½ Marks)
ii. Marginal cost plus pricing (1½ Marks)
iii. Return on investment pricing (2 Marks)
Find Related Questions by Tags, levels, etc.
A company manufactures a single product with a sales price of N1,000 and a marginal cost of N650. If the fixed cost is N685,300 per annum, then the number of units required to Break Even is:
A. 1,950
B. 1,955
C. 1,958
D. 1,985
E. 1,988
Find Related Questions by Tags, levels, etc.
a) If the total cost (in Ghana cedis) of producing xx items is given by the function C (x) = 2600 + 2x +
Required:
i) Calculate the total cost, average cost, and marginal cost of producing 5000 items. (6 marks)
ii) Determine the production level at which the average cost will be the lowest. (4 marks)
Find Related Questions by Tags, levels, etc.
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.
At the Zee manufacturing company, the marginal cost for producing x gears, measured in hundreds, is:
If the fixed cost (the cost of producing zero items) is GH¢3000:
Required:
Determine the total cost for manufacturing 5000 gears.
(11 marks)
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a) The marginal revenue function of a manufacturing company is given by:
The marginal cost function is given by:
Let x be the number of items either produced or sold.
Required:
i) Calculate the revenue generated when 50 items are sold. (2 marks)
ii) Calculate the number of items that will yield maximum revenue. (4 marks)
iii) Calculate the total revenue if 100 items are produced. (4 marks)
iv) Calculate the total profit for the 100 items. (4 marks)
v) If a tax of 20% is imposed on each item produced, find the cost of 100 items. (6 marks)
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