COMM 305 Incremental Analysis

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GS-AC
Posts: 2
Joined: Wed Nov 01, 2017 7:03 pm

Wed Nov 01, 2017 7:18 pm

Hey Ro,

I would like to know why you multiply twice by 2 (circled in the photo) in question 3 that you added in the Incremental Analysis weekly video.

Above information included:
DM/Unit was 6
DL/Unit 2
VOH 17
FOH 700,000
F Period Exp 750,000
V Selling Exp 12

And in this question you wanted a course pack to cost 30$ instead of 25 each.

Thanks in advance!
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admin
Site Admin
Posts: 15
Joined: Thu Feb 16, 2017 12:02 pm

Sat Nov 04, 2017 3:27 pm

What's up bud that is not a 2 but rather the variable Q; we essentially multiply the unit manufacturing cost by Q on one side and the purchase price by Q on the other side in order to determine the number of units that would make us indifferent between the two options (obviously the fixed costs are irrespective of Q so they are added as applicable on each side as well). I believe you corrected it it on the next line as I saw that you do in fact have the correct answer for Q. Hope that helps

Ro

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