cost volume profit analysis

Why have you headed this post “Cost volume profit analysis”? It is nothing to do with CVP analysis – it is decision making under uncertainty.

You are not asked for a range – you are asked to calculate all of the possible outcomes, i.e. if the fee is $180 per day and the variable cost is $95; if the fee is $180 and the cost is $85.
Then the same again for a fee of $200 and then a fee of $220.

However, before you try it, have you watched the lecture on Decision Making under Uncertainty? If not, then you must – this is a popular topic in the exam, and Joker was a past exam question.

You are welcome 🙂

Please do not ask questions about linear programming in a thread that is asking about CVP analysis. When it is a different topic, you must start a new thread 🙂

With linear programming you always need to have the graph of the contraints, and the optimum solution (maximum contribution) will occur at one of the intersections of two of the constraints. However it can be any of the intersections – which one depends on the contribution line. In this question they did solve for the 2 equations – one of them is the line for maximum demand because that gave the optimum.

It is very difficult to explain here in words without drawing the graph – you must watch the free lecture on linear programming. (The optimum is always at the intersection of two lines but they are not always the two lines given by the ‘main’ equations.)

Again, the free lecture on linear programming should make it clear for you.