SOLUTION: I am lost on how find the functions with the information given. Please help. The information given is; A small family bakery specializes in baking cheesecakes. The fixed cost of p

Question 101695: I am lost on how find the functions with the information given. Please help. The information given is;
A small family bakery specializes in baking cheesecakes. The fixed cost of production is $245, the marginal cost per cheesecake is $5, and each cheesecake sells for $12. Assume that the cost function is linear.
a. What is the cost function?
b. What is the revenue function?
c. What is the break-even point?
Thank you for your time
Answer by ankor@dixie-net.com(22740) (Show Source): You can put this solution on YOUR website!
A small family bakery specializes in baking cheesecakes. The fixed cost of production is $245, the marginal cost per cheesecake is $5, and each cheesecake sells for $12. Assume that the cost function is linear.
:
Let x = no. of cheesecakes made and sold
:
a. What is the cost function?
The cost function will be the cost to make the cakes plus the fixed cost:
C = 5x + 245
:
b. What is the revenue function?
The Revenue is the total amt received from the sale of the cakes:
R = 12x
:
c. What is the break-even point?
Break-even point occurs when Cost = Revenue, solve for x,
That will give you the number of cakes that must be sold to break even
R = C
12x = 5x + 245
12x - 5x = 245
7x = 245
x = 245/7
x = 35 cakes need to be sold to break even. (Less they would lose money, more they will make money)
:
:
you can check out solution by substituting 35 for x and see of cost and revenue are equal
Revenue:
12*35 = $420
and Cost:
5*35 + 245 =
175 + 245 = $420 also
:
Did this help you find your way? Any questions?
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