An outdoor furniture manufacturer has fixed costs of $14,000 per month and average variable costs of $12.75 per units manufactured. The company has $1

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Answered question

2020-11-05

An outdoor furniture manufacturer has fixed costs of $14,000 per month and average variable costs of $12.75 per units manufactured. The company has $110,000 available to cover the monthly costs. How many units can the company manufacture? (Fixed costs are those that occur regardless of the level of production. Variable costs depend on the level of production.)

Answer & Explanation

Khribechy

Khribechy

Skilled2020-11-06Added 100 answers

Let x be the number of units manufactured. In a month, the fixed costs is $14000 and the variable costs is $12.75 per unit times the number of units manufactured. Equating to the available budget, we have the equation: 14000+12.75x=110000
Subtract 14000 from both sides: 12.75x=96000
Divide both sides by 12.75x7529.4
Rounding down to the nearest whole number, the company can manufacture 7259 units.

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