A large wood product company is negotiating a contract to sell plywood overseas. The fixed cost that can be allocated to the production of plywood is $900,000 per month. The variable cost per thousand board feet is $131.50. The price charged will be determined by 600 – 0.05x, where x is the monthly sales volume. Please show a clear, complete and step-by-step solutions as well as essential formulas to be considered

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A large wood product company is negotiating a contract to sell plywood overseas. The fixed cost that can be allocated to the production of plywood is $900,000 per month. The variable cost per thousand board feet is $131.50. The price charged will be determined by 600 – 0.05x, where x is the monthly sales volume.
Please show a clear, complete and step-by-step solutions as well as essential formulas to be considered

  1. Determine the optimal monthly sales volume for this product and calculate the profit (or loss) at the optimal volume.
  2. What is domain of profitable demand?
  3. Find the volume at which breakeven occurs and the range (domain) of profitable demand.
  4. What range (domain) of profitable demand if the variable cost are reduced to 10%

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