Suppose you buy a piece of office equipment for $16,000.00. After 5 years you se
ID: 3116103 • Letter: S
Question
Suppose you buy a piece of office equipment for $16,000.00. After 5 years you sell it for a scrap value of $5,000.00. The equipment is depreciated linearly over 5 years. The rate of depreciation for the piece of equipment is
a) $2,200.00 per year
b) $1,571.43 per year
c) $3,200.00 per year
d) $1,833.33 per year
e) $11,000.00 per year
f) None of the above.
A manufacturer has a monthly fixed cost of $60,000.00 and a production cost of $11 for each unit produced. The product sells for $17 per unit. The revenue function for this situation is
f) None of the above.
A company has fixed monthly expenses of $50,000.00 and production costs of $24 per unit produced. They sell their product for $27. What is their profit on the production and sale of 12,000 units?
a) -$26,000.00
b) $324,000.00
c) $293,000.00
d) $36,000.00
e) -$14,000.00
f) None of the above.
can you show step by step please
R(x) = 11 xExplanation / Answer
1.
Suppose you buy a piece of office equipment for $16,000.00. After 5 years you sell it for a scrap value of $5,000.00. The equipment is depreciated linearly over 5 years. The rate of depreciation for the piece of equipment is
total depreciation = 16,000.00 - 5,000.00 = 11,000.00
total years = 5
depreciation per year= $11,000.00/5 = $2,200.00 (option b)
Here the assumption is, depreciation is in same absolute amount every year. It is not same as same rate of depreciation.
2.
A manufacturer has a monthly fixed cost of $60,000.00 and a production cost of $11 for each unit produced. The product sells for $17 per unit. The revenue function for this situation is
let's say x units are produced,
so revenue = 17x. (option b)
3.
A company has fixed monthly expenses of $50,000.00 and production costs of $24 per unit produced. They sell their product for $27. What is their profit on the production and sale of 12,000 units?
profit = revenue - fixed cost - product cost = 27*12000 - 50000 - 24*12000 = -$14,000.00 (option e)
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