5. A company produces and sells the swimsuits to the market with the following information: -...

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5. A company produces and sells the swimsuits to the market with the following information: - Fixed production cost: $200 000 - Variable production cost per unit: $100 - During the summer season, selling price: $225 per unit. Salvage value: Any swimsuit not sold during the summer season is sold to a discount store for $80 per unit. Scenario 1: demand ends up being 13,000 units Scenario 2: Demand ends up being 11,000 units a. Based on above two scenarios, calculate the average profit when the production output is 8000, 10000, 12000, 14000, 16000 respectively; b. What production output should the company choose? 5. A company produces and sells the swimsuits to the market with the following information: - Fixed production cost: $200 000 - Variable production cost per unit: $100 - During the summer season, selling price: $225 per unit. Salvage value: Any swimsuit not sold during the summer season is sold to a discount store for $80 per unit. Scenario 1: demand ends up being 13,000 units Scenario 2: Demand ends up being 11,000 units a. Based on above two scenarios, calculate the average profit when the production output is 8000, 10000, 12000, 14000, 16000 respectively; b. What production output should the company choose?

Answer rating: 100% (QA)

To calculate the average profit for each production output level in the given scenarios we first need to calculate the total production cost revenue and profit for each scenario and then divide the to... View the full answer