SOLUTION: suppose you are the manage of a company. your company is going to manutacture a new product. assume that the accounting department has provided you with a cost estimate: the fixed
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Question 55460: suppose you are the manage of a company. your company is going to manutacture a new product. assume that the accounting department has provided you with a cost estimate: the fixed cost will be $3,198 and the variable cost $31.00
assume also that the sales department has estimates revenue sales as: revenue for each item sols: $154.00
a) write the linear function C(x) and the revenue function R(x)
b) analyze the above information and determine the break-even point for the new poduct
c) find the average cost to produce 145 units of the new product
d)find the average cost to produce 295 units of the new product. Answer by ankor@dixie-net.com(22740) (Show Source):
You can put this solution on YOUR website! cost estimate: the fixed cost will be $3,198 and the variable cost $31.00
assume also that the sales department has estimates revenue sales as: revenue for each item sold: $154.00
:
Assume x = number of units
a) write the linear function C(x) and the revenue function R(x)
Cost: C(x) = 3198 + 31x
Rev: R(x) = 154x
:
b) analyze the above information and determine the break-even point for the new product
Break even occurs when revenue = cost:
154x = 3198 + 31x
154x - 31x = 3198
123x = 3198
x = 3198/123
x = 26 units sold to break even
:
c)find the average cost to produce 145 units of the new product
C(145) = 3198 + 31(145)
C(145) = 3198 + 4495
C(145) = 7693 to produce 145 units
:
Av cost/unit: 7693/145 = $53.06 to produce ea unit
:
:
d)find the average cost to produce 295 units of the new product.
C(295) = 3198 + 31(295)
:
Do this the same way.
