SOLUTION: A company manufactures and sells novelty mugs. The manufacturing costs consist of a fixed costs of R 8000 and a variable cost of R 15.00 per mug. The mugs are sold @ R35.00 each.

Question 1035940: A company manufactures and sells novelty mugs.
The manufacturing costs consist of a fixed costs of R 8000 and a variable cost of R 15.00 per mug. The mugs are sold @ R35.00 each. Assume a linear profit function.
Determine the profit function?
What is the break-even level?
Draw a graph depicting the profit function?
Answer by robertb(5830) (Show Source): You can put this solution on YOUR website!
The cost function would be C(x) = 15x + 8000, while the revenue function is R(x) = 35x. (Here, x is the number of units sold.)
==> The profit function is P(x) = 35x - 15x - 8000, or R(x) = 20x - 8000.
==> The break-even level is the value of x such that P(x) = 0, or
20x - 8000 = 0.
==> Break-even level is 400 units sold.

RELATED QUESTIONS
a company manufactures and sells bar stools. manufacturing costs consist of a fixed cost... (answered by Boreal)

a company manufacture and sells novelty mugs.The manufacturing cost consist of a fixed... (answered by Theo)

a company manufactures and sells bar stools. Manufacturing costs consist of a fixed cost... (answered by josmiceli)

A company manufactures and sells fishing rods. Each rod is sold for R160 00. The... (answered by ikleyn)

LO Manufacturing can produce a maximum of 1511 webcams per month and sell them for $234... (answered by math_tutor2020)

.LO Manufacturing can produce a maximum of 3564 headsets per month and sell them for $259 (answered by ikleyn)

A company that manufactures bicycles has a fixed cost of $100,000. It costs $100 to... (answered by stanbon)

The fixed costs of operating a business are the costs incurred regardless of the level of (answered by ikleyn,mananth)

Suppose a company has fixed costs of $41,600 and variable cost per unit of 2 5 (answered by richwmiller)