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01 Problem Solving 1

This document is a quiz on problem solving for management science. It contains 3 questions testing skills in calculating total cost, total revenue, profit, and break-even volume for different companies. The first question is about a smartphone manufacturer, the second about a heating installation company, and the third about a paper mill. For each question, students must calculate the totals and break-even volume given fixed and variable costs and selling prices. The document provides the formulas and steps to solve these types of management science problems.

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Millania Thana
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565 views3 pages

01 Problem Solving 1

This document is a quiz on problem solving for management science. It contains 3 questions testing skills in calculating total cost, total revenue, profit, and break-even volume for different companies. The first question is about a smartphone manufacturer, the second about a heating installation company, and the third about a paper mill. For each question, students must calculate the totals and break-even volume given fixed and variable costs and selling prices. The document provides the formulas and steps to solve these types of management science problems.

Uploaded by

Millania Thana
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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BM2102

PROBLEM SOLVING FOR MANAGEMENT SCIENCE


SCORE:

Quiz (6 items x 5 points)


1. A smartphone manufacturing company in Asia has monthly fixed costs of ₱20,000,000, and the variable
cost per handset is ₱35. The phones sell for ₱400.
a. For a monthly volume of 3,000,000 units, determine the total cost, total revenue, and profit.
Total Cost =P 20,000,000+ ( 3,000,000 x P35 )
Total Cost =P 20,000,000+ P105,000,000
Total Cost =P 125,000,000

Total Revenue=3,000,000 x P 400


Total Revenue=P 1,200,000,000

Total Profit=( 3,000,000 x P 400 )−P 20,000,000−( 3,000,000 x P 35 )


Total Profit=P 1,200,000,000−P 20,000,000−P 105,000,000
Total Profit=P 1,075,000,000

b. Determine the monthly break-even volume for the smartphone manufacturer.


Cf 20,000,000
υ= = =54,794.52 units
p−C v 400−35

2. A central heating installation company has a fixed annual cost of ₱120,000. The variable costs are ₱1,000
per unit. The company charges ₱3,500 per unit installed.
a. For an annual volume of 57 units, determine the total cost, total revenue, and profit.
Total Cost =P 120,000+ ( 57 x P 1,000 )
Total Cost =P 120,000+ P57,000
Total Cost =P 177,000

Total Revenue=57 x P 3,500


Total Revenue=P 199,500

Total Profit=( 57 x P 3,500 ) −P120,000−( 57 x P 1,000 )


Total Profit=P 199,500−P 120,000−P 57,000
Total Profit=P 22,500

b. Determine the annual break-even volume for this company.


Cf 120,000
υ= = =48units
p−C v 3,500−1,000
3. A paper mill has a monthly fixed cost of ₱253,000, and the variable cost per 90-page folio is ₱0.27. The
revenue per folio sold is ₱2.45.
a. For a monthly volume of 2,566 units, determine the total cost, total revenue, and profit.
Total Cost =P 253,000+ ( 2,566 x P 0.27 )
Total Cost =P 253,000+ P 692.82
Total Cost =P 253,692.82

Total Revenue=2,566 x P 2.45


Total Revenue=P 6,286.7

Total Profit=( 2,566 x (P 2.45 x 90) )−P 253,000−( 2,566 x P 0.27 )


Total Profit=P 565,803−P 253,000−P 253,692.82
Total Profit=P 59,110.18

b. Determine the monthly break-even volume for this company.


Cf 253,000
υ= = =1,148.8 units
p−C v 220.5−0.27

Rubric for grading computation:


CRITERIA POINTS
Complete solution with the correct answer 5
Theast two major steps of the solution are incorrect 4
Half of the solution is correct 3
The first two major steps of the solution are correct 2
The first major step of the solution is correct 1

REFERENCES
Taylor III, B. W. (2016). Introduction to Management Science (12th ed.). New York: Pearson Education Limited.

Teacher’s Comment:
3. a. -247,428 (-3)
b. 116,055 (-3)
01 Problem Solving 1 *Property of STI
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