risk and uncertainty question-dec 2008

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    stogba
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    Hello

    could you please help me on this question – past paper -DEC-2008
    to prepare a profit table showing the 6 possible profit figures per period
    the capacity is 100 for small van ,150 medium , and 200 for large
    Demand for crates varies and can be either 120 190 per period with the probability of the higher demand figure being 0.6

    the sale price is 10$ and variable cost $4 per crate
    goodwill of 100 to be charged against profits per period
    depreciation charge 200$ for the small 300$ for the medium 400$large

    I dont know how they worked out the sales

    1 2 3 4 5 6
    1000 1000 1200 1500 1200 1900

    Thanks in advance


    Avatar of jemma242
    jemma242
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    If u look at the capacity levels of the vans and the demand of 120 and 190 its fairly simple. The selling price is $10 so for the small van with a capacity of 100 although we aan sell 120 and 190 the van can only fit 100 so multiply this by $10 its 100 for each demand.
    Medium van can hold 150 so as demand is only 120 times by $10is 1200, although demand is 190 the van can only cater for 150 times by 10 is 1500.

    Does that make sense?

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