Determine what is the firms total monthly profit

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Firm K is a leading maker of light-weight, water proof outerwear. During the winter months, demand for its main line of water proof coats is given by P=800-.2Q where P denotes price in dollars and Q is quantity of units sold per month. The firm produces coats in a single plant (which it leases by the year.) The total monthly cost of producing these coats is estimated to be C=150,000+400Q. Leasing the plant accounts for almost al of the $150,000 fixed cost. If the firms other outerwear products generate $50,000 in contribution, what is the firm's total monthly profit?

From time to time corporate customers place special orders for customized versions of Firm K's coat. Corporate orders generate an avg. contribution of $100 per coat. Firm K has just recieved and unexpected order for up to 300 coats but has unused capacity to produce only 200. One manager recomends delivering 200 coats. A second argues for cutting back production of standard coats by 100 to fill the complete order. Who is right? Explain

Reference no: EM13210309

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