SOLUTION: A company that manufactures bicycles has a fixed cost of $100,000. It costs $100 to produce each bicycle. The selling price per bike is $300. Write the cost function, C. Write

Algebra ->  Coordinate Systems and Linear Equations  -> Linear Equations and Systems Word Problems -> SOLUTION: A company that manufactures bicycles has a fixed cost of $100,000. It costs $100 to produce each bicycle. The selling price per bike is $300. Write the cost function, C. Write       Log On


   

Question 326343: A company that manufactures bicycles has a fixed cost of $100,000. It costs $100 to produce each bicycle. The selling price per bike is $300.
Write the cost function, C.
Write the revenue function, R.
Determine the break-even point. Describe what this means.
Hint: In solving this exercise, let x represent the number of bicycles produced and sold.

Answer by vleith(2983) About Me  (Show Source):
You can put this solution on YOUR website!
Let x be the number of bikes produced.
You are told the Costs include a fixed cost os 100000 plus a variable cost of 100 per bike.
So
Cost+=+100000+%2B+100x
The Revenue is the amount of money you get selling bikes. You get 300 for each bike you sell.
So
Revenue+=+300x
The break even point is the number of bikes where your Revenue exactly offsets your costs.
Costs+=+Revenue
100000+%2B+100x+=+300x
100000+=+200x
100000%2F200+=+x
500+=+x
You need to seel at least 500 bikes to start 'making a profit'