Blue sage mountain produces hinged snowboards the price
Course:- Accounting Basics
Reference No.:- EM13601447

Assignment Help
Assignment Help >> Accounting Basics

Blue Sage Mountain produces hinged snowboards. The price charged affects the quantity sold. The following equation captures the relation between price and quantity each month:
Selling price $530 - .2 X Quantity Sold
In other words, if they wish to sell 500 boards a month, the price must be $430 ($530 - .2 x 500). Fixed costs of producing the boards are $70,000 a month and the variable costs per board are $90.

a. Prepare a table with quantities between 100 and 2,000 boards in increments of 100 that calculates the price, total revenue, total costs, and profits for each quantity-price combination.
b. Determine the profit-maximizing quantity-price combination.
c. Fixed costs fall from $70,000 a month to $50,000 a month. Should Blue Sage change its pricing decision?
d. Variable costs fall from $90 per unit to $50 per unit. Should Blue Sage change its pricing decision?

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Accounting Basics) Materials
John Smith, age 31, is single and has no dependents. At the beginning of 2013, John started his own excavation business and named it Earth Movers. John lives at 1045 Center
When cash is received from customers in the form of a refundable deposit, the cash account is increased and there is a corresponding increase in:
Assume that the company declares and immediately distributes a 100%stock dividend. Find the retained earnings balance and the total stockholders equity? and also the shares ou
NBS, Inc. is a technology consulting firm focused on Website development and integration of Internet business applications. The president of the company expects to incur $71
Find out the amount of Milt's income which is subject to income tax by each state. Make sure to compute the full taxable income and show all computations.
Fenwicke Company organized and began operating a subsidiary in a foreign country on January 1, 2015, by investing LCU 68,000. Prepare a statement of cash flows in LCU for Fenw
Both the facility and the equipment will be depreciated over 12 years using the straight-line method and are expected to have zero salvage values. His required rate of retur
Let's discuss the various capital budgeting methods most often used, such as the payback method, the accounting rate of return, net present value, and internal rate of retur