Question 1065714: A company markets exercise DVDs that sell for $14.95, including shipping and handling. The monthly fixed costs (advertising, rent, etc.) are $16,910 and the variable costs (materials, shipping, etc.) are $5.45
per DVD.
(A) Find the cost equation and the revenue equation.
(B) How many DVDs must be sold each month for the company to break even?
(C) Graph the cost and revenue equations in the same coordinate system and show the break-even point. Interpret the regions between the lines to the left and to the right of the break-even point.
Answer by ankor@dixie-net.com(22740)   (Show Source):
You can put this solution on YOUR website! A company markets exercise DVDs that sell for $14.95, including shipping and handling.
The monthly fixed costs (advertising, rent, etc.) are $16,910 and the variable costs (materials, shipping, etc.) are $5.45 per DVD.
:
Let x = no. of DVD's
(A) Find the cost equation and the revenue equation.
C(x) = 5.45x + 16910
R(x) = 14.95x
(B) How many DVDs must be sold each month for the company to break even?
14.95x = 5.45x + 16910
14.95x - 5.45x = 16910
9.50x = 16910
x = 16910/9.5
x = 1780 DVD's must be sold to break even
(C) Graph the cost and revenue equations in the same coordinate system and show the break-even point.
Graph y = 14.95x and y = 5.45x + 16910; looks like this
Blue line shows the revenue at the break even point $26611
:
Interpret the regions between the lines to the left and to the right of the break-even point.\
area below the cost line (green), losing money, area above, making a profit
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