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The Gatson Manufacturing Company Has Estimated the Following Components for a New

question 35

Essay

The Gatson manufacturing company has estimated the following components for a new product.
Fixed cost = $50,000
Material cost per unit = $2.15
Labor cost per unit = $2.00
Revenue per unit = $7.50
Note that fixed cost is incurred regardless of the amount produced. Per-unit material and labor cost together make up the variable cost per unit. Profit is calculated by subtracting the fixed cost and total variable cost from total revenue, assuming the company sells all its produced goods.
A) Build an influence diagram that illustrates how to calculate profit.
B) Using mathematical notation, give a mathematical model for calculating profit.
C) Implement your model from part (b) in Excel using the principles of good spreadsheet design.
D) If the company decides to make 70,000 units of the new product, what will be the resulting profit?

Definitions:

Transition Metal Elements

Elements found in groups 3 through 12 of the periodic table, characterized by their ability to form stable compounds with variable oxidation states.

Ionic

Relating to or involving ions, typically describing chemical bonds formed through the electrostatic attraction between oppositely charged ions.

Coordinate Covalent

A type of chemical bond where both electrons come from the same atom, typically seen in complex ions or molecules where a metal atom is bonded to one or more ligands.

Alkaline Earth Elements

A group of elements in the periodic table comprising beryllium, magnesium, calcium, strontium, barium, and radium, characterized by their two valence electrons.