Case Study of Aluminum In1994. Docx

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 Case Study of Aluminum In1994. Docx Composition

(a) A list indicating which categories cost you included in your determination of marginal expense. Briefly describe why you included these kinds of and excluded the different categories.

- " Little Cost” is definitely aggregation of variable costs whose sum varies pertaining to production volume. The lists of minor cost are as follows. ◎ The lists of minor cost

Item| Description

TotalElectricity Cost| in the case of new plant of Alusaf, that amount of 16% of per load aluminum cost for every ton of created aluminumthus electrical power is bundled up with production| Total Alumina Cost| alumina is the raw material of smelter, the natural way variable cost| Other Organic Materials| the number of coke& message, bath components used in the method depends on the production| Consumables| acquired anodes and pot relining materials| Freight| freight price depends on the development quantity

в—Ћ Other fixed cost

Item| Description

Maintenance| fixed expense

Labor| In manufacturing, labor cost is generally variable expense, however the materials says that less creation doesn't mean less labor thus smelting aluminum is usually not much influenced by labor amount| General andAdministrative| fixed price

Plant Powerand Fuel| if the power and fuel is usually not linked to potlines, it could be fixed price

(b) A graph of your industry supply shape. (You may choose to " costume it up” by adding ideal axis brands, etc . )| 1) Market Supply Shape is sum of individual firms's supply curve 2) Because firms are price-takers, their limited revenue equals market price and so they maximize their particular profit once marginal income equals little cost. Therefore , firms create when limited cost equals marginal revenue (=market price).

(c) An answer to the subsequent questions: a. According to the source curve you constructed, how much output wouldbe supplied by the aluminum market at an amount of $1, 100 per ton. How does this out-do actual production in 1993b. According to the source curve you...