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A company produces two products, e and f, in batches of 100 units. the production and cost data are: the company can only perform 12,000 set-ups each period yet there is unlimited demand for each product. what is the differential profit from producing product e instead of product f for the year?

A. $216,000
B. $204,000
C. $12,000
D. $54,000

User Sam Chats
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1 Answer

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Final answer:

The differential profit calculation requires specific revenue and cost data for products e and f, which is missing from the question. The reference material provided discusses economies of scale and profit calculations, not specific to products e and f. Therefore, we are unable to provide an accurate differential profit figure between the two products without the necessary data.

Step-by-step explanation:

The question at hand requires an analysis of differential profit between producing two products, e and f, under the constraint of a limited number of set-ups per period. However, since the actual production and cost data for products e and f are not provided in the question, we are unable to calculate the differential profit. Instead, the provided reference material discusses economies of scale, cost structures of producing goods at different scales, and profit calculation at a specific output level.

To address questions on differential profit accurately, one would need the revenue and cost associated with each product to determine the incremental profit gained or lost from producing one product over another. The reference material illustrates this by showing the difference in total revenue and total cost, leading to a calculation of profit or loss.

User Unsym
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