Question 55460
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.