A company has capacity of producing 1,00,000 units of a certain product in a month....
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Accounting
A company has capacity of producing 1,00,000 units of a certain product in a month. The sales department reports that the following scheduling of selling price is possible:
Volume of Production Selling Price Per Unit
60% 0.90
70% 0.80
80% 0.75
90% 0.67
100% 0.61
The variable costs of manufacture between these levels are Sh.0.15 per unit and fixed costs Sh.40,000.
Required: Find out at what volume (level) of production will the profit be maximum?
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