Determine the monthly break-even volume for the company

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Reference no: EM132901302

1. A luxury watchmaker in Switzerland has monthly costs of $125,000 and variable costs of $4,700 per watch. The watchmaker sells each for $22,400.

a. Determine the monthly break-even volume for the company.

b. Graphically illustrate the break-even volume for the luxury watchmaker.

c. If the luxury watchmaker has a monthly capacity of 24 units, determine the break-even volume per the production capacity.

2. A jewelry store makes necklaces and bracelets from gold and platinum. The store has 18 ounces of gold and 20 ounces of platinum. Each necklace requires 3 ounces of gold and 2 ounces of platinum, whereas each bracelet requires 2 ounces of gold and 4 ounces of platinum. The demand for bracelets is no more than four. A necklace earns $300 in profit and a bracelet, $400. The store wants to determine the number of necklaces and bracelets to make in order to maximize profit.

a. Formulate a linear programming model for this problem

b. Solve this model by using graphical analysis.

Reference no: EM132901302

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