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In: Finance
Cogswell Cogs (CC) produces cogs – surprise! The estimated cost to produce cogs is ($4 +...
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Cogswell Cogs (CC) produces cogs – surprise! The estimated cost to produce cogs is
($4 + $18/(x+2)) per cog, where x is the number of cogs produced/sold. CC can currently sell 20 cogs for $10 each. What is the current profit per cog and total profit for CC? What is the marginal cost of producing the next cog? A new customer has offered to buy an additional 10 cogs, but wants a discount of $1 per cog, should you sell the 5 cogs to the new customer? Assuming your old customers find out and also demand the discount, should you still sell the 5 cogs to the new customer? What is CC’s total profit if they take the new customer
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jeff jeffy answered 6 days agoRelated Solutions
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Cascade Company estimated the following variable and fixed cost for the only product it produces: Variable...
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Variable Cost Per Unit
Fixed Cost
Direct Materials
$132.30
$ 0
Direct Labor
$115.30
$ 0
Factory Overhead
$24.50
$264,000
Sales Salaries and Commissions
$12.70
$245,000
Advertising
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Travel
$0
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Office and Officer Salaries
$0
$220,000
Supplies
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$15,000
Misc. Administrative Expenses
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Cascade Company estimated the following variable and fixed cost for the only product it produces: Variable...
Cascade Company estimated the following variable and fixed cost
for the only product it produces:
Variable Cost Per Unit
Fixed Cost
Direct Materials
$132.30
$ 0
Direct Labor
$115.30
$ 0
Factory Overhead
$24.50
$264,000
Sales Salaries and Commissions
$12.70
$245,000
Advertising
$0
$75,000
Travel
$0
$39,500
Misc. Selling Expenses
$6.70
$24,500
Office and Officer Salaries
$0
$220,000
Supplies
$6.30
$15,000
Misc. Administrative Expenses
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