Question

Suppose that a company has determined that the cost of producing x items is 500+140x and that the price it should charge for one item is p=200-x. I) find the cost function

Answer 1

Answer:

a.)Total cost = (cost per unit )(no of units )+ overhead

Cost per unit =50

No of units =x

Overhead =200

TT =Total cost

TT=50x+200

2.Break even point is equal to

Fixed cost \over Selling price - variable cost

Sellingprice−variablecost

Fixedcost

30p \over 3-2

3−2

30p

=

=30p=30p

3.

Cost function

C=500-140xC=500−140x

Revenue function

R=200x-x^2R=200x−x

2

Profit function

P=x^2+60x-500P=x

2

+60x−500

Break even point

X=10X=10