Hard Rock Management produces and sells decorative stones on different production lines. The business takes the big rocks and disassembled, in packages or in the form of wholesale decoration stores and building markets Selling. Recently, people have preferred granite on kitchen counters, so granite stone production a 25% increase in costs. Production of The Hard Rock Enterprise owner Barış Bey on the granite stone production line is considering stopping it. Most customers who buy from building markets only because they buy one type of product Stopping the granite production line will not be a problem for the business. 

However, decoration stores are generally because more than one stone is needed, it is preferable to take all stones at once. Granite stopping the stone production line causes a 20% loss in sales to decoration stores is expected to happen. If the granite stone production line is stopped, the operation shall be will be able to save on the cost of packaging and the cost of labor endured in the preparation of packaging. This in addition, the business needs the existing capacity to produce other products. he won't be able to remove the machine. In this case, general production of the canceled production line for the unused machine costs will be installed on other production lines. In other words, the business is one of the current general manufacturing costs. will not be able to save money. Total prices and costs of products produced and sold by Hard Rock Enterprise presented in the following table.

                                                              Granite              Flint              Limestone         Blue Rock     Thin Gravel

Package Sales Information (Kg)

Sales Quantity                                   50,000 kg           25,000 kg      40,000 kg          60,000 kg      30,000 kg

Sale Price                                           $5                         $3.50             $4                        $6                  $4.50

Costs Per Kg

Stone                                                  $3                          $2                 $2.25                   $3.25             $2.50

Packaging                                        $0.05                       $0.05           $0.05                  $0.05             $0.05

Labor                                                $0.25                       $0.20           $0.15                   $0.25             $0.15

                                                              Granite              Flint              Limestone         Blue Rock     Thin Gravel

Trading                                                 $0.75                 $0.75             $0.75                  $0.75            $0.75

General Manufacturing Cost $0.50                 $0.40             $0.30                 $0.50            $0.30

Wholesale Information (Kg)

Sales Quantity                                100,000 kg          50,000 kg        80,000 kg         150,000 kg     75,000 kg

Sale Price                                            $4.50                   $3.00              $3.50                  $5.25             $4.00

Costs Per Kg

Raw material                                      $3                        $2                   $2.25                  $3.25             $2.75

Labor                                                $0.15                      $0.15            $0.15                   $0.15              $0.15

Machine $0.50                                 $0.50                   $0.50              $0.50              $0.50

General Manufacturing Cost       $0.30                        $0.30            $0.30             $0.30                 $0.30

Requested:

a. Calculate total revenue, cost and profit under the current conditions.

b. Calculate total revenue, cost and profit if the business closes the granite stone production line.

When making your calculations, sales to decoration stores will decrease by 20%, but other sales will not be affected by this.

c. What is the best option for hard rock? Why?

Answer rating: 100% (QA)

Request ed a Calcul ate total revenue cost and profit under the current conditions ANS WER Total rev... View the full answer