Project #58311 - math

In this capstone you will be applying some of the algebraic concepts you studied to solve a business problem. For this capstone you will be uploading one MS Word document in the space provided for capstone in module 6. All answers, tables, figures and charts should be presented in one document. Your answers should be typed in Times Roman 12 pts., double spaced and should follow APA format.

Please answer the following questions:

I       In a discussion of producing and selling a product the following terms are used.

·         Fixed Costs

·         Variable Costs

·         Total Costs

·         Revenue

·         Output

·         Break-Even Point

Please explain what each of these terms mean.

II.                  (a) If the fixed cost of producing a product is $100. If the average variable cost is $2, and the selling price is $2.50 per unit, write out the total cost function and the total revenue function (Hint: These are linear equations). Find the break-even output level (Hint: Total Revenue = Total Cost).

(b)   Complete the following tables for different levels of output:

Output

0

50

100

150

200

250

300

350

400

Fixed Cost

 

 

 

 

 

 

 

 

 

Variable Cost

 

 

 

 

 

 

 

 

 

Total Cost

 

 

 

 

 

 

 

 

 

 

 

 

Output

0

50

100

150

200

250

300

350

400

Price per unit

 

 

 

 

 

 

 

 

 

Total Revenue

 

 

 

 

 

 

 

 

 

Output

0

50

100

150

200

250

300

350

400

Total Profit

 

 

 

 

 

 

 

 

 

 

 

 

© In Excel draw the line for the profit data above. Find the break-even level of output. Verify that the break-even level of output is the same as in (a)

 

III.                (a) The average variable cost is not always a constant. Sometimes suppliers may give a huge discount for large orders, which would make the average variable costs decrease as output increases. For example, if the average cost is 2 – 0.001 q, then you will see that the variable cost decreases as output increases. Assuming again that the fixed cost is $100 and the selling price is $2.50 per unit complete the following tables:

Output

0

50

100

150

200

250

300

350

400

Fixed Cost

 

 

 

 

 

 

 

 

 

Variable Cost

 

 

 

 

 

 

 

 

 

Total Cost

 

 

 

 

 

 

 

 

 

 

 

 

Output

0

50

100

150

200

250

300

350

400

Price per unit

 

 

 

 

 

 

 

 

 

Total Revenue

 

 

 

 

 

 

 

 

 

Output

0

50

100

150

200

250

300

350

400

Total Profit

 

 

 

 

 

 

 

 

 

 

 

 

(b) In Excel draw the line for the profit data above. Find the break-even level of output.

© Given the information in (a), write out the cost function, revenue function and profit function. Algebraically, using the profit function, find the break-even output. Verify that the break-even output is the same as that obtained in (b).

IV.                (a) Sometimes if there is a shortage of raw materials the average variable costs may increase as output increases. If the average cost is 2 + 0.001 q, then you will see that the variable cost increases as output increases. Assuming again that the fixed cost is $100 and the selling price is $2.50 per unit complete the following tables:

Output

0

50

100

150

200

250

300

350

400

Fixed Cost

 

 

 

 

 

 

 

 

 

Variable Cost

 

 

 

 

 

 

 

 

 

Total Cost

 

 

 

 

 

 

 

 

 

 

 

 

Output

0

50

100

150

200

250

300

350

400

Price per unit

 

 

 

 

 

 

 

 

 

Total Revenue

 

 

 

 

 

 

 

 

 

Output

0

50

100

150

200

250

300

350

400

Total Profit

 

 

 

 

 

 

 

 

 

 

 

 

(b) In Excel draw the line for the profit data above. Is there a break-even level of output?

© Given the information in (a), write out the cost function, revenue function and profit function. Algebraically, using the profit function, find the break-even output. Verify that the answer is the same as that obtained in (b).

V.           Conclusion: Briefly explain the answers obtained in this capstone. Are there any other application in Economics, Finance and Accounting that you think linear and quadratic functions can be used? Give examples.

 

 

Subject Mathematics
Due By (Pacific Time) 02/16/2015 11:41 pm
Report DMCA
TutorRating
pallavi

Chat Now!

out of 1971 reviews
More..
amosmm

Chat Now!

out of 766 reviews
More..
PhyzKyd

Chat Now!

out of 1164 reviews
More..
rajdeep77

Chat Now!

out of 721 reviews
More..
sctys

Chat Now!

out of 1600 reviews
More..
sharadgreen

Chat Now!

out of 770 reviews
More..
topnotcher

Chat Now!

out of 766 reviews
More..
XXXIAO

Chat Now!

out of 680 reviews
More..
All Rights Reserved. Copyright by AceMyHW.com - Copyright Policy