One of Kodak’s business units sells X-ray film in 100-sheet packages. The follow

Question

One of Kodak’s business units sells X-ray film in 100-sheet packages. The following table summarizes possible pricing levels, packages sold at that price, and costs for the various number of packages.

Number of Packages Sold

price     Number
            Packages Sold

                           Total Cost
$564    218    $71,800
562       219      71,900
560      220       72,000
558       221         72,100
556       222          72,200
554       223          72,300
552       224          72,400
550       225          72,500
548        226        72,600

Required:

a. What price-quantity combination maximizes the profits of the X-ray film, ignoring the allocation of NASCAR?

b. If $0.10 of the NASCAR is allocated for every dollar of X-ray revenue, what price-quantity combination of X-ray film maximizes profits after allocating NASCAR costs?

c. What price-quantity combination of X-ray film maximizes profits after allocating NASCAR costs using total costs (instead of revenues), where for every dollar of total costs, $0.20 of NASCAR costs are allocated?

One of Kodak's basiness units sells X-ray film in 100-sheet packages. The following table summarizes possible pricing levels, packages sold at that price, and costs for the various mumber of packages. Number of Packages Sold 218 219 Price Total Cost 571,800 71 ,900 72.000 72.100 558 556 554 72.300 72,400 226 Required

Explanation / Answer

a-

At Price level $550 and unit 225 Profit is maximum.

B-

At Price level $556 and unit 222 Profit is maximum.

C-

At Price level $560 and unit 220 Profit is maximum.

What is NASCAR?? I have assumes it as additional cost.

Price No. of Package Total Sale Total Cost Profit $564.00 218 $122,952.00 $71,800.00 $51,152.00 $562.00 219 $123,078.00 $71,900.00 $51,178.00 $560.00 220 $123,200.00 $72,000.00 $51,200.00 $558.00 221 $123,318.00 $72,100.00 $51,218.00 $556.00 222 $123,432.00 $72,200.00 $51,232.00 $554.00 223 $123,542.00 $72,300.00 $51,242.00 $552.00 224 $123,648.00 $72,400.00 $51,248.00 $550.00 225 $123,750.00 $72,500.00 $51,250.00 $548.00 226 $123,848.00 $72,600.00 $51,248.00

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