Question :
42.Testor Paints sells varnish with a variable cost of $6.50 : 1302807
42.Testor Paints sells varnish with a variable cost of $6.50 per gallon. The company is unsure which price to charge in order to maximize profits. The price charged will also affect the demand.
Gallons Demanded Unit Price Per Gallon
20,000 $11
30,000 $10
40,000 $9
50,000 $8
If fixed costs are $80,000 and the chart above represents the demand at various prices, what price should be charged in order to maximize profits?
A.$11
B.$10
C.$9
D.$8
43.Dollar Deals sells a single product that has a unit variable cost of $9 per unit. The company’s total fixed costs are $220,000. The company estimates demand at various activity levels as follows:
Units Demanded Unit Price
54,000 $15
65,000 $14
72,000 $13
82,000 $12
What price should Dollar Deals charge to maximize profits?
A.$15
B.$14
C.$13
D.$12
44.Calico Joe Fabrics sells a single product. The company estimates total fixed costs at $360,000 with demand, price, and total variable costs as follows:
Units DemandedUnit PriceTotal Variable Costs
73,000$31$1,606,000
83,000301,826,000
93,000292,046,000
103,000282,266,000
113,000272,486,000
What price should Calico Joe Fabrics charge to maximize profits?
A.$31
B.$30
C.$29
D.$28
E.$27
45.Calico Joe Fabrics sells a single product. The company estimates total fixed costs at $360,000 with demand and unit variable costs at various activity levels as follows:
Units DemandedUnit PriceTotal Variable Costs
73,000$31$1,606,000
83,000301,826,000
93,000292,046,000
103,000282,266,000
113,000272,486,000
How much profit will Calico Joe Fabrics have if a price of $26 is charged and demand is 120,000?
A.$120,000
B.$3,120,000
C.$480,000
D.$2,760,000
46.Calico Joe Fabrics sells a single product. The company estimates total fixed costs at $360,000 with demand and unit variable costs at various activity levels as follows:
Units DemandedUnit PriceTotal Variable Costs
73,000$31$1,606,000
83,000301,826,000
93,000292,046,000
103,000282,266,000
113,000272,486,000
How would you best describe Calico’s variable cost per unit over the range shown?
A.It is constant.
B.It is increasing as volume increases.
C.It is decreasing as volume increases.
D.There is not enough information provided to determine the answer.
47.Palm Decor sells a single product that has variable costs of $12 per unit. The company estimates the following demand at various unit prices:
Units DemandedUnit Price
31,000$19
37,00018
44,00017
56,00016
60,00015
What price should Palm Decor charge to maximize profits?
A.$19
B.$18
C.$17
D.$16
48.Right Air Supply sells a specialized air filter that has a variable cost of $10 each. Fixed costs are estimated to be $700,000 across all levels of sales shown below:
Units Demanded Unit Price
80,000$35
90,000$33
100,000$31
110,000$30
120,000$28
What price should Right Air Supply charge to maximize profits?
A.$35
B.$33
C.$31
D.$30
E.$28
49.Right Air Supply sells a specialized air filter that has a variable cost of $10 each. Fixed costs are estimated to be $700,000 across all levels of sales shown below:
Units Demanded Unit Price
80,000 $35
90,000 $33
100,000 $31
110,000 $30
120,000 $28
What information given, if any, is not relevant to the price maximization decision?
A.The selling prices
B.The variable costs per unit
C.The quantities demanded
D.The total fixed costs
50.Right Air Supply sells a specialized air filter that has a variable cost of $10 each. Fixed costs are estimated to be $700,000 across all levels of sales shown below:
Units Demanded Unit Price
80,000 $35
90,000 $33
100,000 $31
110,000 $30
120,000 $28
What price should Right Air Supply charge to maximize revenues?
A.$35
B.$33
C.$31
D.$28
51.Maker Sun Chairs is trying to determine the optimal price to charge for its galvanized deck chairs. The company has total fixed costs of $120,000 and the deck chairs have a unit variable cost of $27.00 per unit. Maker Sun Chairs has determined that the following relationships exist between price and demand:
Unit PriceUnit Demand
$45 7,200
$44 7,800
$43 8,400
$42 8,800
How much is the contribution margin at a price of $45?
A.$324,000
B.$129,600
C.$12,600
D.$9,600
