Question 1164750: A Manufacturer of microcomputers produces three different models as shown in Table 2. The following summarizes wholesale prices, material cost per unit, and labor cost per unit.Annual fixed cost are $25 million.
Model 1 Model 2 Model 3
Wholesale price/unit 500 1000 1500
Material Cost / unit 175 400 750
Labor cost / unit 100 150 225
i. Determine a joint revenue function for sales of the three different microcomputer models
ii. Determine the annual costs function for the manufacturing the three models.
iii. Determine the profit function for sales of the three models?
Answer by Theo(13342)   (Show Source):
You can put this solution on YOUR website! x = number of model 1 microcomputers
y = number of model 2 microcomputers
z = number of model 3 microcomputers
wholesale price per unit = 500x + 1000y + 1500z
material cost per unit = 175x + 400y + 750z
labor cost per unit = 100x + 150y + 225z
annual fixed costs are 25,000,000
total revenue = 500x + 1000y + 1500z
annual costs for the manufacture of the 3 models is 25,000,000 + (175x + 400y + 750z) + (100x + 150y + 225z)
combine like terms to get:
annual costs for the manufacture of the 3 models is 25,000,000 + 275x + 550y + 975z
the profit function is the revenue minus the cost.
that would be 500x + 1000y + 1500z - 25,000,000 - 275x - 550y - 975z
the per unit costs are for the whole year, as is the fixed cost.
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