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Question 1047805: A person is the manager of a firm. He is considering manufacturing a new product, so he asks the accounting department for cost estimates and the sales department for sales estimates. After he receives the data, he must decide whether to go ahead with production of the new product. Analyze the following data (find a break-even quantity) and then decide what the manager would do in this case. Also, write the profit function.
C(x)=160x+800 AND R(x)=140x
The break-even quantity is how many units?
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! A person is the manager of a firm. He is considering manufacturing a new product, so he asks the accounting department for cost estimates and the sales department for sales estimates. After he receives the data, he must decide whether to go ahead with production of the new product. Analyze the following data (find a break-even quantity) and then decide what the manager would do in this case. Also, write the profit function.
Cost to produce x items:: C(x)=160x+800
Revenue for selling x items:: R(x)=140x
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The break-even quantity is how many units?
Solve:: C(x) = R(x)
160x + 800 = 140x
20x = -800
x = -40 (breakeven quantity)
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Note:: The breakeven point cannot be negative.
Please check your posted data.
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Profit = Revenue - Cost
P(x) = 140x - (160x+800)
P(x) = -20x - 800
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Cheers,
Stan H.
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