SOLUTION: Your college newspaper, The Collegiate Investigator, has fixed production costs of $76 per edition and marginal printing and distribution costs of 42¢ per copy. The Collegiate Inv
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Question 1179798: Your college newspaper, The Collegiate Investigator, has fixed production costs of $76 per edition and marginal printing and distribution costs of 42¢ per copy. The Collegiate Investigator sells for 62¢ per copy.
(a)
What profit (or loss) results from the sale of 500 copies of The Collegiate Investigator?
$
(b)
How many copies should be sold in order to break even? Answer by ikleyn(52794) (Show Source):
You can put this solution on YOUR website! .
Your college newspaper, The Collegiate Investigator, has fixed production costs of $76 per edition and marginal printing and distribution costs of 42¢ per copy. The Collegiate Investigator sells for 62¢ per copy.
(a) What profit (or loss) results from the sale of 500 copies of The Collegiate Investigator?
(b) How many copies should be sold in order to break even?
~~~~~~~~~~~~~~~~~~~~~~~~~
(a) Simple arithmetic.
The cost to produce 500 copies is 76 + 500*0.42 = 286 dollars.
The revenue when 500 copies sold is 500*0.62 = 310 dollars.
No loss. The profit is 310-286 = 24 dollars.
(b) Let n be the number of copies produced and sold.
The cost to produce n copies is 76 + 0.42*n dollars.
The revenue when n copies sold is 0.62*n dollars.
The break even equation is
76 + 0.42*n = 0.62n.
The solution is n = = = = 380 copies.
