Your company has three divisions, A, B and C and your\'re responsible for develo

Question

Your company has three divisions, A, B and C and your're responsible for developing the forecast for Division A. You've determined that you'll produce 125,000 units at a unit price of $35.00. Division B will produce 75,000 units at a unit price of $60.00 and Division C will produce 95,000 units at a unit price of $55.00.   a. Roll up these three divisions for the corporate headquarters and determine the average unit price for all units produced. b. The total revenue for the three division did not meet corporate requirements and they've determined that the Corporation needs to have a total of $17,000,000 in revenue for the three divisions. Based on this information, how many units will each division have to produce to meet corporate requirements (round to nearest whole number.) Your company has three divisions, A, B and C and your're responsible for developing the forecast for Division A. You've determined that you'll produce 125,000 units at a unit price of $35.00. Division B will produce 75,000 units at a unit price of $60.00 and Division C will produce 95,000 units at a unit price of $55.00.   a. Roll up these three divisions for the corporate headquarters and determine the average unit price for all units produced. b. The total revenue for the three division did not meet corporate requirements and they've determined that the Corporation needs to have a total of $17,000,000 in revenue for the three divisions. Based on this information, how many units will each division have to produce to meet corporate requirements (round to nearest whole number.)

Explanation / Answer

a) Average unit price = (Units produced by A*Unit price of A + Units produced by B*Unit price of B + Units produced by C*Unit price of C)/( Units produced by A + Units produced by B + Units produced by C) = (125000*35 + 75000*60 + 95000*55)/(125000+75000+95000) = 47.80

b) The unit price is lowest for Division A. The units which are short must be produced at A

B & C can remain fixed as 75,000 and 95,000 respectively

Total revenue = 17,000,000

Let units at A be x

x*35 + 75000*60 + 95000*55 = 17,000,000

x = 207,857

A = 207,857

B = 75,000

C = 95,000

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