Determine the optimal demand per month and profit at demand

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The total fixed costs for manufacturing a product each month is $8,000. The variable cost per unit consists of direct labor, material and overhead. The labor will be based on the 25th unit and an 85% learning curve is expected to apply to the number of hours per unit. The first unit took 0.5 hours. Labor is charged at $18 per hour and overhead is charged at 150% of the direct labor. Material costs are $7.00 per unit. Marketing expects that the price of the product and the demand will be related such that p=$90-0.12D. Determine the optimal demand per month and the profit at that demand.

Reference no: EM131071686

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