SOLUTION: A producer of pottery is considering the addition of a new plant to absorb the backlog of demand that now exists. The primary location being considered will have fixed costs of $9
Algebra.Com
Question 1187518: A producer of pottery is considering the addition of a new plant to absorb the backlog of demand that now exists. The primary location being considered will have fixed costs of $9,200 per month and variable costs of 70 cents per unit produced. Each item is sold to retailers at a price that averages 90 cents.
What volume per month is required in order to break even?
Fixed Costs = $9200, Variable Costs = $.70 and Retail Value = $.90
QBEP = $9200/($.70-$.90) = 46000 units per month
What profit would be realized on a monthly volume of 61,000 units? 87,000 units?
What volume is needed to obtain a profit of $16,000 per month?
What volume is needed to provide a revenue of $23,000 per month?
Plot the total cost and total revenue lines.
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
profit = revenue minus cost.
revenue .9x
cost = .7x + 9200
profit = .9x - (.7x + 9200) = .2x - 9200.
you can graph that function as shown below:
your answers are shown below:
What volume per month is required in order to break even?
Fixed Costs = $9200, Variable Costs = $.70 and Retail Value = $.90
QBEP = $9200/($.70-$.90) = 46000 units per month.
this is correct.
What profit would be realized on a monthly volume of 61,000 units? 87,000 units?
profit at 61000 units is 3000.
profit at 87000 units is 8200
What volume is needed to obtain a profit of $16,000 per month?
126000 units.
What volume is needed to provide a revenue of $23,000 per month?
23000
plot the total cost and total revenue lines.
done above.
to solve these problems, use the formula of y = .2x - 9200.
y is the profit
x is the number of units.
for example, when x = 61000 units, profit is .2*61000 - 9200 = 3000
for example, when profit = 23000, formula becomes 23000 = .2x - 9200
add 9200 to both sides to get 32200 = .2x
divide both sides by .2 to get x = 161000.
the coordinate points on the graph are in (x,y) format.
x is the number of units.
y is the profit.
let me know if you have any questions.
theo
RELATED QUESTIONS
Carbon-14 is used to determine the age of artifacts. It has a half-life of 5700 years.... (answered by Theo,ikleyn)
"A pottery store is advertising 25% off the regular price of any pottery in stock."... (answered by nerdybill)
The maximum number of volts, E, that can be placed across a resistor is
given by the... (answered by MathLover1,Alan3354)
The amount of liquid a paper towel can absorb will be use to marked the paper towel.... (answered by stanbon)
A binomial settings: "6 boxes of pottery are checked for damaged items. The probability... (answered by stanbon)
The maximum number of volts, E, that can be placed across a resistor is given E= sq. rt.... (answered by Alan3354)
X is a continuous random variable. We want to calculate the probability that X is... (answered by Boreal)
A plant grows 3.5 cm per week.It is now 10 cm tall.How many weeks from now will the plant (answered by josgarithmetic)
Trees in urban areas help keep air fresh by absorbing carbon dioxide. A city has $2100 to (answered by greenestamps)