1.4 Model examination questions 1. XYZ company's cost function for the next four months is C=500,000+5Q a) Find the BE dollar volume of sales if the selling price is br. 6/ unit b) What would be the company's cost if it decides to shutdown operations for the next four months c) If,because of strike,the most the company can produce is br. 100,000 units, should it shutdown?Why or why not? 2. In its first year,"Abol Buna Co'' had the following experience Sales=25,000 units Selling price=br.100 TVC=brcdot 1,500,000 TFC=br.350,000 Required: 1. Develop Revenue , cost & profit functions for the co. in terms of quantity. 2. Find the Breakeven point in terms of quantity 3. Convert the cost equation in terms of quantity in to a cost equation in terms of revenue 4. Find the Breakeven revenue 5. If profit had been br.500,000 what would have been the sales volume (revenue) & the quantity of sales 6. What would have been the profit if sales are br.2,000,000 3. A small home business set up with an investment of 10,000 for equipment . The business manufactures a product at a cost of br. 0.64 per unit. If the product sales for Br. 1.20 per unit how many units must be sold before the business breaks even? 4. A retail co plans to work on a margin of 44% of retail price & to incur other Variable Cost of 4% . If is expected Fixed cost of Br. 20,000 i. Find the equation relating Total Cost to sales ii. Find the profit if sales are Br. 60,000 iii. Find the breakeven revenue iv. If profit is Br. 15,000 what should be the revenue level? v. If you have any one item at a price of Br. 15/unit how do you convert the cost equation in terms of revenue in to a cost equation in terms of quantity? 19

1.4 Model examination questions<br /><br />1. XYZ company's cost function for the next four months is $C=500,000+5Q$<br />a) Find the BE dollar volume of sales if the selling price is br. $6/unit$<br />b) What would be the company's cost if it decides to shut down operations for the next four months?<br />c) If, because of a strike, the most the company can produce is br. $100,000$ units, should it shut down? Why or why not?<br /><br />2. In its first year, "Abol Buna Co" had the following experience:<br />$Sales=25,000\quad units$<br />$Selling\quad price=br.100$<br />$TVC=br\cdot 1,500,000$<br />$TFC=br.350,000$<br /><br />Required:<br />1. Develop Revenue, cost & profit functions for the co. in terms of quantity.<br />2. Find the Breakeven point in terms of quantity.<br />3. Convert the cost equation in terms of quantity into a cost equation in terms of revenue.<br />4. Find the Breakeven revenue.<br />5. If profit had been $br.500,000$ what would have been the sales volume (revenue) & the quantity of sales?<br />6. What would have been the profit if sales are $br.2,000,000$?<br /><br />3. A small home business set up with an investment of $\$ 10,000$ for equipment. The business manufactures a product at a cost of $br.\quad 0.64$ per unit. If the product sales for $Br.\quad 1.20$ per unit, how many units must be sold before the business breaks even?<br /><br />4. A retail co plans to work on a margin of $44\% $ of retail price & to incur other Variable Cost of $4\% $. If is expected Fixed cost of $Br.\quad 20,000$<br />i. Find the equation relating Total Cost to sales.<br />ii. Find the profit if sales are $Br.\quad 60,000$.<br />iii. Find the breakeven revenue.<br />iv. If profit is $Br.\quad 15,000$ what should be the revenue level?<br />v. If you have any one item at a price of $Br.\quad 15/unit$ how do you convert the cost equation in terms of revenue in to a cost equation in terms of quantity?