The following questions pertain to the problem and spreadsheet below.
A company makes products A and B from 2 resources, labor and material. The company wants to determine the selling price which will maximize profits. A unit of A costs 25 to make and demand is estimated to be 20 - .10 * Price of A. A unit of B costs 18 to make and demand is estimated to be 30 - .07 * Price of B. The utilization of labor and materials and the available quantity of resources is shown in the table. A reasonable price for the products is between 100 and 200.
Let X 1 = demand for As and X 2 = demand for Bs.
Let P 1 = price for As and P 2 = price for Bs

-Refer to Exhibit 8.1. What formula is used in cell B7 of the spreadsheet for this problem?
A)= 30 - .07 * C3
B)= 20 - .1 * B3
C)= B3 -B4
D)= B5 * B7 + C5 * C7

Question

The following questions pertain to the problem and spreadsheet below.
A company makes products A and B from 2 resources, labor and material. The company wants to determine the selling price which will maximize profits. A unit of A costs 25 to make and demand is estimated to be 20 - .10 * Price of A. A unit of B costs 18 to make and demand is estimated to be 30 - .07 * Price of B. The utilization of labor and materials and the available quantity of resources is shown in the table. A reasonable price for the products is between 100 and 200.
  Let X 1 = demand for As and X 2 = demand for Bs.
Let P 1 = price for As and P 2 = price for Bs
 
-Refer to Exhibit 8.1. What formula is used in cell B7 of the spreadsheet for this problem?
A)= 30 - .07 * C3 
B)= 20 - .1 * B3 
C)= B3 -B4 
D)= B5 * B7 + C5 * C7

Quizplus · Accepted Answer

Cell B7 is calculating the revenue for Product A using the formula: demand * price = 20*(0.1*B3) = 2*B3. This represents the revenue earned from selling one unit of Product A.

The Following Questions Pertain to the Problem and Spreadsheet Below