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.
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-> 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.
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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.
