Question

8. Current Electronics plans to introduce a new laptop computer. The fixed costs are $125,300, and the variable costs are $450 per unit. The revenue from each computer is $800. Find the following: (5 points) a) The total cost C(x) of producing x computers. b) The total revenue R(x) from the sale of x computers. c) The total profit P(x) from the production of and sale of x computers. d) The profit or loss from the production and sale of 400 computers e) The break-even point.

Answer 1

a) C(x) = 125300 + 450x

b) R(x) = 800x

c) P(x) = 350x - 125300

d) Profit of $14,700

e) 358 computers

Explanation:

The fixed costs are $125,300, and the variable costs are $450 per unit.

The revenue from each computer is $800.

a) The total cost C(x) of producing x computers.

C(x) = 125300 + 450x

b) The total revenue R(x) from the sale of x computers.

R(x) = 800x

c) The total profit P(x) from the production of and sale of x computers.

P(x) = R(x) - C(x).

P(x) = 800x - (125300 + 450x) = 800x - 125300 - 450x = 350x - 125300

P(x) = 350x - 125300

d) The profit or loss from the production and sale of 400 computers

P(400) = 350.400 - 125300 = 140000 - 125300 = 14700

Profit of $14,700

e) The break-even point.

R(x) = C(x)

800x = 125300 + 450x

350x = 125300

x = 125300/350

x = 358

The break even point is 358 computers.