A Company Is Producing 15,000 Units

question 31

Multiple Choice

A company is producing 15,000 units.At this output level,marginal revenue is $22 and the marginal cost is $18.The firm sells each unit for $48 and average total cost is $40.What can we conclude from this information?

• A)The company is making a loss
• B)The company needs to cut production
• C)The company needs to increase production
• D)Not enough information is provided

Identify the optimal production plan among multiple options based on cost-efficiency.

Understand and calculate the total cost involved in chase and level aggregate plans.

Apply the principles of yield management to maximize revenue through dynamic pricing.

Utilize graphical aggregate planning methods to forecast demand and adjust production.

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Definitions:

Parent Entity

A business that controls one or more subsidiary companies.

Deferred Tax Asset

A financial item on a company's balance sheet that reduces future tax liabilities due to deductible temporary differences, losses, or credits.

Unrealised Profit

Profit that results from an increase in value of an asset that has not yet been sold and thus has not generated actual cash inflow.

Intragroup Sale

Transactions occurring between entities within the same group or conglomerate, often scrutinized for transfer pricing and tax implications.