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

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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.

Required:
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?

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