Portfolio Task Two 2015/16
You are required to write a report that addresses the following topic:
The table below provides data about Weyland Acoustics plc (a fictitious company) that produces headphones.
|Total Cost (€)||1200||1800||2000||2100||2240||2600||3300||4210||5360|
|Price per unit (€)||0||160||148||136||127||116||107||95||83|
Using the cost data derive the following: Total Fixed costs, Total Variable costs, Average Fixed costs, Average Variable costs, Average Total cost and Marginal costs.
Using the data on prices derive the following: Total revenue, Average revenue, and Marginal revenue.
Use your results to answer the following questions:
- Assess whether these data relate to either the short-run or the long-run. [Approximately 200 words]
- At which level of output (to the nearest 10 units) would the owners be maximising their profits? What is the value at which profits are maximised?
- At which level of output (to the nearest 10 units) would the managers be maximising sales revenue? What is the value of the maximum sales revenue?
- Explain why the managers of the company might focus on sales revenues rather than profits. [Approximately 800 words]
- If the owners introduced a profit constraint of €3000, at which level of output (to the nearest 10 units) would the managers wish to operate based on achieving the highest possible sales revenue?
Word limit – 1800 words maximum
- Accuracy of the calculation of the required cost and revenue values
- Precision of identification of profit maximising and sales revenue maximising outputs
- Thoroughness of the discussion about the managers preference for sales revenue maximisation
- Structure and presentation of material, including the use of the Harvard Citation and Referencing system