SOLUTION: you start a business manufacturing hats. you spend $8,000 for supplies and equipment. It will cost $4.95 per hat to produce the hats. How many hats must you produce before your ave

Question 1046528: you start a business manufacturing hats. you spend $8,000 for supplies and equipment. It will cost $4.95 per hat to produce the hats. How many hats must you produce before your average total cost per hat is $5.
Answer by addingup(3677) (Show Source): You can put this solution on YOUR website!
Let the number of hats you have to produce x.
What I understand you are saying is that you have to amortize 8,000 in supplies and equipment, and you have a variable cost of 4.95 per hat. If this is the case:
8,000+4.95x = 5x
8,000 = 0.05x
8,000/0.05 = x
x = 160,000 hats

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