You are setting up a part time business with an initial investmentof $15,000. The unit cost of the product is $11.80, and theselling price is $19.30. A)Find the equation for the total cost C and the total revenue Rfor the x units. B) Find the break-even point by finding the point of intersectionof the cost and revenue equations. C)How many units would yield a profit of $1000?

themediamafia73

themediamafia73

Answered question

2022-09-06

You are setting up a part time business with an initial investmentof $15,000. The unit cost of the product is $11.80, and theselling price is $19.30.
A)Find the equation for the total cost C and the total revenue Rfor the x units.
B) Find the break-even point by finding the point of intersectionof the cost and revenue equations.
C)How many units would yield a profit of $1000?

Answer & Explanation

Kendall Ponce

Kendall Ponce

Beginner2022-09-07Added 18 answers

To solve this problem you have to think in linear eguations terms. Follow these eguations:
Total cost = Total fixed cost+Total variable cost
Let C = Total cost
Let R = Total revenue
Let x= Total of units
therefore,
a)
Since you have invested 15,000 it is a fixed value and thenbuy each unit x for $11.80
C = 15,000 + 11.80*x this is for the cost
Since you sell each unit x at 19.30
R = 19.30 *x this is the revenue
b) To find the break even point ser R and C equal to each other and solve for x
15,000 +11.80x=19.30x
15,000=7.50x
x = 200 units is the break even point.
c) Set the profit or revenue equation equal to 1,000 and solve for x
1,000 = 19.30x
x=51.8, but since you can not sell 0.8 units you will have tosell either 51 to have a profit of 984.30 or 52 to have aprofit of 1003.60

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