Question

A camera manufacturer spends $1,800 each day for overhead expenses plus $9 per camera for labor and materials. The cameras sell for $18

each. a. How many cameras must the company sell in one day to equal its daily costs? b. If the manufacturer can increase production by 50
cameras per day, what would their daily profit be?

Answer 1

Amount of money spent per day = $1800

Cost of overhead expenses per day for labor and materials = $9

Selling price of each camera = $18

a. Let us assume the number of cameras manufactured per day = x dollars

Then

Cost of cameras sold in 1 day = 18x

So

18x = 1800 + 9x

18x - 9x = 1800

9x = 1800

x = 200

From the above deduction, we can conclude that the number cameras sold per day is 200

b. Daily selling amount of 250 cameras = 250 * 18

= 4500 dollars

Daily manufacturing price of 250 cameras = 1800 + (9 * 250)

= 4050 dollars

Then

Daily profit = 4500 - 4050

= 450 dollars