# resume Essay

If Natalia accept this offer, she will not lose money but she will gain less profit then other sales of 70000 bags. Natalia will get the profit of only \$3 instead of \$5 for her routine sales. They were producing on their 70% capacity. Their total capacity is of 100000 bags so she can produce 30000 more bags from her existing production setup. Here in this variable production cost she has \$3 for direct labour and \$2 for direct material cost so her variable total cost is \$5 and the fixed cost is \$5 so it makes sense that Natalia’s production cost is \$10 for the first bag and then after her production cost would become .

Now if Natalia accept this offer with Brazilian company of 20000 bags then she has to sale a bag on \$8. So she can earn \$3 from each bag because her production cost is total of \$5. After all she will not lose but make lesser money than usual.
In class qAssignment-3, Contemporary Business Management, Prof Albert Knab, Fanshawe College
IC3 Questions:
Q-1: Will Natalia lose the money if she accepts Brazilian offer? Explain.

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Ans-1: If Natalia accept this offer, she will not lose money but she will gain less profit then other sales of 70000 bags. Natalia will get the profit of only \$3 instead of \$5 for her routine sales. They were producing on their 70% capacity. Their total capacity is of 100000 bags so she can produce 30000 more bags from her existing production setup. Here in this variable production cost she has \$3 for direct labour and \$2 for direct material cost so her variable total cost is \$5 and the fixed cost is \$5 so it makes sense that Natalia’s production cost is \$10 for the first bag and then after her production cost would become \$5. Now if Natalia accept this offer with Brazilian company of 20000 bags then she has to sale a bag on \$8. So she can earn \$3 from each bag because her production cost is total of \$5. After all she will not lose but make lesser money than usual.Q-2: What factors other than costs and revenue should be…

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