Liguanea Pharmaceuticals Limited (LPL) currently sells a product the sovereign for $2200. This price is based on
Fantastic news! We've Found the answer you've been seeking!
Question:
Liguanea Pharmaceuticals Limited (LPL) currently sells a product the “sovereign” for $2200. This price is based on annual demand. Analysis indicates that if the company increase the price by $100 annual demand will fall by 400 units. At the current price 4,000 units are demanded. The product has the following cost structure per unit:
Direct material | $225 |
Direct labour | $75 |
Direct expenses | $150 |
Variable overheads | $90 |
Fixed overheads | $300 |
Variable selling expense | $60 |
Fixed selling expenses | $450 |
Management wants to know the optimal production quantity and its maximum profits.
Required:
Determine the price equation
Determine the optimal price and quantity
Determine the optimal profits.
Related Book For
Posted Date: