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A manufacturer can produce a broom at a cost of R5 and can sell it for R15. The daily fixed cost for the ?
production
of these brooms is R300. Suppose he sells all the brooms that he produces each day.
(a) What will the profit be if the manufacturer produces and sells 40 brooms each day?
(b) What will the manufacturer make a profit if he produces and sells 20 brooms a day? (Motivate your answer.)
(c) How many brooms does the manufacturer need to produce and sell to break even? (Give the break–even–
point.)
2 Answers
- bmwminihashLv 51 decade agoFavorite Answer
each broom costs 5
each broom makes a reveune of 15
assuming we make x brooms:
Total cost = 300 + 5x
assuming we sell all brooms we make (x)
Total revenue = 15x
Total Profit = Total Revenue - Total Cost
Total Profit = 15x - 300 - 5x
Total Profit = 10x - 300
a)
Profit = 10(40) - 300
Profit 400 - 300 = 100
b)
Profit = 10(20) - 300
Profit = 200 - 300
Profit = -100
loses 100 dollars. needs to make and sell more
c)
break even occurs when Revenue equals Cost
15x = 300 + 5x
10x = 300
x = 30
need to make and sell 30 to break even. to make profit, must make and sell more than 30
voila
Source(s): math teacher - Jun AgrudaLv 71 decade ago
Problem a:
= R15(40) - (R5[40] + R300)
= R600 - (R200 + R300)
= R600 - R500
= R100
Answer: R100 is the profit.
Problem b:
= R15(20) - (R5[20] + R300)
= R300 - (R100 + R300)
= R300 - R400
= - R100
Answer: R100 is the loss
Problem c:
= R300/(R15 - R5)
= R300/R10
= 30
Answer: 30 brooms he must produce and sell to break-even.
