1 The cost of producing video machines Includes a fxed cost

1. The cost of producing video machines. Includes: a fxed cost of 3,00000 plus a variable cost per unit of $ 40.00 per machine a) Find the total cost to produce # 300 machines. b) Determine the average cost per machine, c) Determine the point of draw (break even point) in quantity (Q) if the machines sell for $ 150.00 each 2The Hoeel El Politécnico has # 500 room. They usually have* cost per oom of S 70.00, plus a fised cost of $ 5,000.00 per day. Each room is rented foe5 175.00 per day duing the summer season. Answer the following questions using the above data ilfthe Hotel operates at 70% capacity for oneday, what is the fMt profit a/loss? in units, if it operates at full b) What is the equilibeium point (BEP capacity c) Would you recommend lowering the current price per room to earn 40,000, if207% of the rooms are unccupied? what would be the new price per oom What should be the variable cost per daily unit to eam 5 30,000.00, at its 80% capacity? , You prodace 800 daily proceries at a cot per unit of 85 cents. By ar oversaght he lost 25% ofthe production. The operation currently has a fixed cost ef 5 800.00 and a variable cost per unit of 35 a) Determine the new cost par unit considering the loss of production

Solution

The total cost is equal to Fixed cost+Variable cost

a) Total cost to produce 300 machines

=3000+(300x40 per machine)

=3000+12000

=$15000

b)Average cost = Total cost/Q

So,average cost per machine = 15000/300 =$50

c) Break even point occurs when total revenue=total cost

=150Q=3000+40Q

=(150-40)Q=3000

Q=27