Question

The profit made by a company when 60 units of its product is sold is R 1 600.00. When 150 units of its products are sold, the profit increases to R 5 200.00. Assuming that the profit function is linear and of the form ()=+ where is the profit in Rands and is the number of units sold, determine the: 1.1 Values of and . (4 marks) 1.2 Break-even level. (3 marks) 1.3 Number of units that need to be sold to realise a profit of R 12 000.00. (3 marks)

Answer 1

Answer:

Step-by-step explanation:

Let say cost Price = X

Selling Price = Y

Profit per unit = Y - X

Let say fixed Cost = F

60(Y - X) = 1600 + F

150(Y-X) = 5200 + F

=> 90(Y - X) = 3600

=> Y-X = 40

60 * 40 = 1600 + F

=> F = 800

Profit = Number of unit sold * 40  -  800

Break even Level = Rs 800

0 = N * 40 - 800

=> N = 20  units

Profit of Rs 12000

12000 = N * 40  - 800

=> N = 12800/40

=> N = 320 units