SOLUTION: a company always makes axactly as many units of its product as it sells.Its fixed costs are R15 000.00 per year. in addition,it costs R3.00 to make one unit, and each unit sells fo

Question 737349: a company always makes axactly as many units of its product as it sells.Its fixed costs are R15 000.00 per year. in addition,it costs R3.00 to make one unit, and each unit sells for R8.50. At what level of output and sales per year will the company make a profit of R29 000.00 per year.
Answer by sachi(548) (Show Source): You can put this solution on YOUR website!
let the companymakes x units/year of its product
each unit sells for R8.50
so the selling price=8.5x
Its fixed costs are R15 000.00 per year
it costs R3.00 to make one unit
so the production cost=3x
the company make a profit of R29 000.00 per year.
so the profit is
8.5x-3x-15000=29000
or 5.5x=29000-15000=14000
or x=14000/5.5=2545.45=2546 approxunits
so the company makes 2546 units/year of its product
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