1 Fixed asstes 4millions to a maximum of 1 million units var

1. Fixed asstes $4millions (to a maximum of 1 million units), variable costs $12 per unit. How much changes the average cost per unit when the total production increase from 400,000 to 900,000 units?

2. When the manufacturing company is operating with an experience curve of 75%. When the accumulate production came to a 3 million units the unit cost was $12.00. Assume the company continues with a 75% experience unit, How much will be the cost per unit when the accumulate production comes to 24 millions units?

3. In the growth stage of the life cycle the industry grew from $1,500 millions to $1,800 millions from 2013 to 2014. The ABC company increased their sales from $150 millions to $600 millions in that period of time. WIch of the following is correct?

a) The growth percentage on sales from ABC Company was a 33%

b) The percentage growth on sales from ABC company from 2013 to 2014 was twice as the industry.

c) ABC market share in 2014 wa 33%

d) All of the above are correct

e) All of the abive minus (c) are correct

4. A company lists its shares on the stock market at $50.00, the company has earnings of $500 millions and 200 millions in stocks. What is the company P/E Ratio?

5.National Company a global conglomerate unit, has a annual 13% growth rate and sales of $600 millions, a $100 millions more than Caly Company, the second company with greater sales in the industry. The industry sales were $2,200 millions.

a) What is the relative market share for National Company?

b) Based on the BCG Growth/Share matrix, in which quadrant should be placed National Company?

c) What is the National Company market share?

***Show the procedure

Solution

1.

Production=400,000

Fixed Costs=$4millions

Variable costs= $12 per unit

The Total costs are equal to the summation of Fixed costs and variable costs

TC=VC+FC

=400000*12 + 4,000,000

=4,800,000+ 4,000,000

=$8,800,000

Average Costs=8,800,000/400,000= $22

Production=900,000

Fixed Costs=$4millions

Variable costs= $12 per unit

The Total costs are equal to the summation of Fixed costs and variable costs

TC=VC+FC

=900000*12 + 4,000,000

=10,800,000+ 4,000,000

=$14,800,000

Average Costs=14,800,000/900,000= $16.44

All figures of costs are in dollars.