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ME Assignment 2

ME Assignment

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37 views3 pages

ME Assignment 2

ME Assignment

Uploaded by

Temporary Account
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Symbiosis Institute of Management Studies, Khadki, Pune

EVALUATION SHEET
(COVER PAGE)

INTERNAL EVALUATION/ ASSIGNMENT NAME & No:

(Internal)
[Compulsory Submission for Internal Evaluation]

Subject Code: 20448108


Subject: Managerial Economics
Prof. Name: Gauri Apte
Program and Batch: MBA (E) 2022-24 First Year Weekend Online
PRN: 22020448102
Student Name: Nidhi Dube
Date of submission: 1/Oct/2022
Subject Email Id: [email protected]

Evaluation:

TOTAL
Question 1 2 3 4 5
(Out of 30)
Marks
Allotted

Evaluated by: ___________________


Signature of Faculty: ___________________
Date: _____________2022
Assignment Statement:
Take up a firm.
Analyse the cost structure
Try and gauge where the firm reaches its lowest cost point.
Take it up as a case study and find out whether the firm has ever reached its lowest cost point and what is
it. If not, then why.

Business: A Local Candle Making Firm

Fixed cost: Rent


Variable cost: Raw materials and wages

Data:

Units Output TFC TVC TC AC=TC/Output


20 5000 1100 6100 305
50 5000 1300 6300 126
100 5000 1500 6500 65
150 5000 1650 6650 44.33333333
300 5000 2000 7000 23.33333333
500 5000 3050 8050 16.1
600 5000 4511 9511 15.85166667
650 5000 7000 12000 18.46153846
675 5000 8000 13000 19.25925926
700 5000 8810 13810 19.72857143
712 5000 9000 14000 19.66292135
750 5000 15000 20000 26.66666667
760 5000 15500 20500 26.97368421
Analysis:

 The firm has already crossed its lowest cost point. Cost of labour has increased significantly recently
but the production has not increased in proportion. The cost of raw material has also gone up.
 Since the cost of raw material is controlled by supplier and the firm cannot negotiate towards a
significant decrease in raw material cost, the management needs to think of alternative plan to
decrease the variable cost.
 The firm can either decrease the head count or cut down the wages or it will soon see decrease in
profits.

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