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Cox Electric makes electronic components and has estimated the following for a new design of one of its products:

Fixed Cost = $10,000
Material cost per unit = $0.15
Labor cost per unit = $0.10
Revenue per unit = $0.65

These data are given in the file CoxElectric. Note that fixed cost is incurred regardless of the amount produced. Per-unit material and labor cost together make up the variable cost per unit. Assuming Cox Electric sells all that it produces, profit is calculated by subtracting the fixed cost and total variable cost from total revenue.

a. Build an influence diagram that illustrates how to calculate profit.
b. Using mathematical notation similar to that used for Nowlin Plastics, give a mathematical model for calculating profit.
c. Implement your model from part b in Excel using the principles of good spreadsheet design.
d. If Cox Electric makes 12,000 units of the new product, what is the resulting profit?

Respuesta :

batolisis

Answer:

a) attached below

b) P( profit ) = TR(q) - TC(q)

c) attached below

d) -$5000 ( loss )

Explanation:

Given data:

Fixed Cost = $10,000

Material cost per unit = $0.15

Labor cost per unit = $0.10

Revenue per unit = $0.65

a) Influence diagram to calculate profit

attached below

b) derive a mathematical model for calculating profit.

VC = variable cost per unit , LC = per unit labor cost , MC = per unit marginal cost, TC = Total cost of manufacturing , FC = Fixed cost, q = quantity, TR = Total revenue, R = revenue per unit

VC = LC + MC

TC (q) = FC + ( VC * q )

TR (q) = R * q

P( profit ) = TR(q) - TC(q) ------------ ( 1 )

c)  attached below

d) If Cox Electrics makes 12,000 units of the new product

The resulting profit = -$5000

q = 12

P = TR ( q ) - TC ( q )

  = ( R * q ) - ( Fc + ( Vc * q ) )

  = ( 0.65 * 12000 ) - ( 10,000 + ( 0.25 * 12000 )

  = -$5200

Ver imagen batolisis
Ver imagen batolisis

Fixed Cost is given $10,000 , material cost per unit is given $0.15 , labor cost per unit is $0.10 , and revenue per unit is $0.65.  

a. The profit is derived when the total cost gets deducted from the total revenue. The total bifurcation of cost and revenue is shown in the diagram below:  

b. The mathematical model for computation of profit is:

[tex]VC = LC + MC\\TC (q) = FC + (VC * q)\\TR (q) = R * q\\P = TR(q) - TC(q)[/tex]

Here, VC is the variable cost per unit, LC is labor cost per unit, MC is per unit marginal cost, TC is the total cost of manufacturing, FC is fixed cost, q is quantity, TR refers to total revenue, and R is the revenue per unit.

c. The implementation of the above model in Excel is shown below:

d. The profits when 12,000 units of new products are made would be:

[tex]P = TR ( q ) - TC ( q )\\ = ( 0.65 * 12000 ) - ( 10,000 + ( 0.25 * 12000 )\\=-5200[/tex]

Hence, the company would face a loss of $5200.  

Learn more about the calculation of profits here:

https://brainly.com/question/15562293

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