Company RGD opened a new manufacturing plant that fabricates high-quality steel ball bearings for export in the Asian market. The company spent P30 million on the construction of the facilities and all equipment for production. In order for the company to have a huge sale, the price of each bearing is pegged at P, a price 30% lower than any company in the Asian market. Based on your study, you can estimate the average cost of production of each bearing. The cost is C, which includes the tax, cost of raw materials, fuel, electricity, transportation, labor, and all others. For the values of P and C, P= 1,100 pesos C= 850 pesos Tasks: 1. Determine the breakeven price 1,000,000 bearings. Then, de mine the profit th the company will earn from selling it at the pegged price. 2. Make a progressive production plan so that at the end of 5 years, the company will recover the cost spent (P30,000,000) for the construction of the facilities and equipment, and at the same time earn a profit of P50,000,0000. Make a yearly computation of the revenues earned and the total profit earned at the end of 5 years.
Company RGD opened a new manufacturing plant that fabricates high-quality steel ball bearings for export in the Asian market. The company spent P30 million on the construction of the facilities and all equipment for production. In order for the company to have a huge sale, the price of each bearing is pegged at P, a price 30% lower than any company in the Asian market. Based on your study, you can estimate the average cost of production of each bearing. The cost is C, which includes the tax, cost of raw materials, fuel, electricity, transportation, labor, and all others. For the values of P and C, P= 1,100 pesos C= 850 pesos Tasks: 1. Determine the breakeven price 1,000,000 bearings. Then, de mine the profit th the company will earn from selling it at the pegged price. 2. Make a progressive production plan so that at the end of 5 years, the company will recover the cost spent (P30,000,000) for the construction of the facilities and equipment, and at the same time earn a profit of P50,000,0000. Make a yearly computation of the revenues earned and the total profit earned at the end of 5 years.
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Question
Complete your solutions and production plan
Task 1: Solution/computation of the breakeven price and profit for the production of 1,000,000 bearings
Task 2: Five-Year Progressive Production Plan
Solution of the number of bearings to be manufactured for 5 years and the recoverycost
Year 1:
Year 2:
Year 3:
Year 4:
Year 5:
Transcribed Image Text:Company RGD opened a new manufacturing plant that fabricates high-quality steel ball bearings for
export in the Asian market. The company spent P30 million on the construction of the facilities and
all equipment for production. In order for the company to have a huge sale, the price of each bearing
is pegged at P, a price 30% lower than any company in the Asian market.
Based on your study, you can estimate the average cost of production of each bearing. The cost is C,
which includes the tax, cost of raw materials, fuel, electricity, transportation, labor, and all others.
For the values of P and C,
P= 1,100 pesos
C= 850 pesos
Tasks:
1. Determine the breakeven price of 1,000,000 bearings. Then, determine the profit that the company
will earn from selling it at the pegged price.
2. Make a progressive production plan so that at the end of 5 years, the company will recover the cost
spent (P30,000,000) for the construction of the facilities and equipment, and at the same time earn a
profit of P50,000,0000.
Make a yearly computation of the revenues earned and the total profit earned at the end of 5 years.
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