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(Solved) (Latest ver. Aug 2020) - Measer Enterprises - Optimal Output Level Calculation

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Measer Enterprises produces standard telephone key pads. The firm operates in a highly competitive market in which the keypads are sold for $4.50 each. Du tto the nature of the production technology the firm can produce only between 10,000 and 13,000 units per month in fixed increments of 1,000 units Measer has the following cost structure:

Rate of Production and Sales

10,00011,00012,00013,000
Factory Cost Variable37,00040,80044,60048,400
Factory Cost Fixed9,0009,0009,0009,000
Selling Cost Fixed6,0006,6007,4008,200
Adminstration, Fixed6,0006,0006,0006,000
Total58,00062,40067,00071,600

Average Unit Cost
Average Unit5.85.675.585.51

 







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This question was answered on: Sep 16, 2020

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