The following are some assumptions given by the manager: The price is equal to $32 and...
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The following are some assumptions given by the manager: The price is equal to $32 and is expected to increase by 20% every year At price equal to $50 the demand was 150. With each 5 Dollar increase, the demand decreases by 10 units. The manager found that there is a strong linear relationship between the fixed cost and the increase rate of the price as shown in the table. Year 5% 10% 15% 20% 25% Number of units There is a non-linear relationship between the number of units and the variable cost as given in the following table 2 3 4 5 6 7 8 Fixed cost 2000 2250 A Number of Units 2500 2750 3000 0 25 50 75 100 125 150 The financial analyst creates the following Excel model and need your help to find the messing information: 0 25 50 75 100 125 150 Variable cost B Varlable cost 0 1500 3000 3750 4500 4700 4900 C Cublc D Squared deviation E F b Coefficients of cubic functions G 0 128.100402 16409.7129 a 1500 1479.59917 416.193753 128.1004 11.48878 216155 -0.00106 3000 2732.12392 71757.596 3750 3786.70061 1346.93451 4500 4544.35522 1967.3851 4700 4906.11372 42482.8638 4900 4773.00208 16128.4715 150509:158 C d H L N 11 Nonlinear cost for Torrington using Cubic Function 12 M 13 Growth Rates 14 Price 15 16 17 18 Unit selling price 19 Number of units 20 Fixed cost 21 22 23 Revenue 24 Profit 25 26 Present Value of profit 27 Variable cost Total cost 28 Discount value. 29 Present value 30 20% 1 5% 2 10% Years 3 15% P 4 20% Q 5 R a) Calculate the value of the yearly price b) How the values of the coefficients which are available in cells E3:H3 have been calculated? c) Find the function to calculate the number of units? Use this function to calculate the value of the yearly number of units d) Calculate the yearly fixed cost (what is the increase rate of the fixed cost) e) Calculate the yearly variable cost f) Based on the above planning what do you think the manager will do and why? g) If the fixed cost is expected to be increased from 10% to 65%, while the company can increase their price from 20% to 75%, identify the critical situation that can face the company? The following are some assumptions given by the manager: The price is equal to $32 and is expected to increase by 20% every year At price equal to $50 the demand was 150. With each 5 Dollar increase, the demand decreases by 10 units. The manager found that there is a strong linear relationship between the fixed cost and the increase rate of the price as shown in the table. Year 5% 10% 15% 20% 25% Number of units There is a non-linear relationship between the number of units and the variable cost as given in the following table 2 3 4 5 6 7 8 Fixed cost 2000 2250 A Number of Units 2500 2750 3000 0 25 50 75 100 125 150 The financial analyst creates the following Excel model and need your help to find the messing information: 0 25 50 75 100 125 150 Variable cost B Varlable cost 0 1500 3000 3750 4500 4700 4900 C Cublc D Squared deviation E F b Coefficients of cubic functions G 0 128.100402 16409.7129 a 1500 1479.59917 416.193753 128.1004 11.48878 216155 -0.00106 3000 2732.12392 71757.596 3750 3786.70061 1346.93451 4500 4544.35522 1967.3851 4700 4906.11372 42482.8638 4900 4773.00208 16128.4715 150509:158 C d H L N 11 Nonlinear cost for Torrington using Cubic Function 12 M 13 Growth Rates 14 Price 15 16 17 18 Unit selling price 19 Number of units 20 Fixed cost 21 22 23 Revenue 24 Profit 25 26 Present Value of profit 27 Variable cost Total cost 28 Discount value. 29 Present value 30 20% 1 5% 2 10% Years 3 15% P 4 20% Q 5 R a) Calculate the value of the yearly price b) How the values of the coefficients which are available in cells E3:H3 have been calculated? c) Find the function to calculate the number of units? Use this function to calculate the value of the yearly number of units d) Calculate the yearly fixed cost (what is the increase rate of the fixed cost) e) Calculate the yearly variable cost f) Based on the above planning what do you think the manager will do and why? g) If the fixed cost is expected to be increased from 10% to 65%, while the company can increase their price from 20% to 75%, identify the critical situation that can face the company?
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The information provided seems to relate to an economic model where both price and cost affect the demand for a product Ill address each of the questions in the image stepbystep a Calculate the value ... View the full answer
Related Book For
Accounting Principles Part 2
ISBN: 978-1118306796
6th Canadian edition Volume 1
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Kinnear, Joan E. Barlow
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