a firm paid 25,000 as rent of its office and 15,200 has the interest of the loan taken to produce X unit of Commodities and the cost of production per unit is rupees 8 and each item is sold at the price of 50 75 find the profit function also find the break-even point.
Answers
Given : a firm paid 25,000 as rent of its office and 15,200 has the interest of the loan taken to produce X unit of Commodities and the cost of production per unit is rupees 8 and each item is sold at the price of Rs 75
To find : the profit function
the break-even point.
Solution:
Total cost = 25000 + 15200 + 8X
=> Total cost = 40200 + 8X
Revenue = 75X
Profit function = Revenue - Total cost
=> Profit function = 75X - ( 40200 + 8X )
=> Profit function = 67X - 40200
break-even point. profit is 0
=> 67X - 40200 = 0
=> X = 600
600 units for break-even point.
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