PART I. PROBLEM SOLVING (10 Marks)

Direction: Direction: Read, Analyze and Calculate what required.

ABC manufactures a computer stand. It has fixed costs of $600,000 and each stand sells for $130, with a variable cost of $55 per unit. The factory has a maximum capacity of 25,000 units and it anticipates selling 10,000 units each period.

1- Identify the parameters of the problem (2 marks)

2- Create the mathematical model that represents the problem (2 marks)

3- If ABC manufactures sells 11,000 stands, what would be the profit?

(2 marks correct solution + 1 marks correct assignment = 3 marks)

4- How much stands must XYZ manufactures sells to break even? (2 marks correct solution + 1 marks correct assignment = 3 marks)