Question 1142374: Please help me solve this
A manufacturer produces T - shirts at a cost of R10 per T - shirt. Suppose we draw two graphs plotting
production cost and income (in rands) against the number of T - shirts produced and sold. Suppose
the break - even point is (50, 1 000).
Which of the following statements is / are true? (Assume that the cost and profit functions are linear.)
A. The manufacturer will make a profit if he sells 50 T - shirts.
B. The fixed daily cost is R500.
C. The manufacturer sells the T - shirts at R25 per T - shirt.
1. Only A
2. Only B
3. Only C
4. Only A and B
5. Only B and C
Answer by Theo(13342)   (Show Source):
You can put this solution on YOUR website! the cost equation is y = 10 * x + F
y is the total cost.
F is the fixed cost.
x is the number of shirts produced and sold.
break-even point is (50,1000) means that the break-even point is when 50 shirts are produced and sold and the revenue is equal to the cost.
at the break-even point, y is equal to the revenue and is also equal to the cost.
at the break-even point, y is equal to 1000.
at the break-even point, the cost equation becomes 1000 = 10 * 50 + F.
solve for F to get F = 500.
the revenue equation is y = P * x.
y is the revenue.
P is the sale price per shirt.
x is the number of shirts sold.
at the break-even point, the revenue equation becomes 1000 = P * 50.
solve for P to get P = 20.
your three statements are:
A. The manufacturer will make a profit if he sells 50 T - shirts.
B. The fixed daily cost is R500.
C. The manufacturer sells the T - shirts at R25 per T - shirt.
A is false because the manufacturer will only make a profit if the manufacturer sells MORE THAN 50 shirts.
at 50 shirts, themanufacturer breaks even.
this means he neither takes a loss or a profit.
the loss is 0.
the profit is 0.
B is true.
C is false because the sale price per shirt is 20.
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