Question

Quadcopters plans to sell a standard quadcopter ​(toy drone) for $ 55 and a deluxe quadcopter for $ 85. Funtime purchases the standard quadcopter for $ 45 and the deluxe quadcopter for $ 65. Management expects to sell two deluxe quadcopters for every three standard quadcopters. The​ company's monthly fixed expenses are $ 11 comma 900. How many of each type of quadcopter must Funtime sell monthly to​ breakeven? To earn $ 7 comma 700​?

Answer 1

For break-even, number of standard quadcopter sold should be 238

and, number of standard quadcopter sold should be 2 × 238 = 476

to earn $7,700, number of standard quadcopter sold should be 392

and, number of standard quadcopter sold should be 2 × 392 = 784

Step-by-step explanation:

Given:

Selling cost of standard quadcopter = $55

Selling cost of deluxe quadcopter = $85

Purchasing cost of standard quadcopter = $45

Purchasing cost of deluxe quadcopter = $65

monthly fixed expenses = $ 11,900

Now,

let the number standard quadcopter sold be 'x'

thus, according to the question

the number deluxe quadcopter sold will be = 2x

also,

at break-even

total cost = total revenue

or

Total fixed cost + Total purchasing cost = Total revenue

or

$11,900 + ($45x + $65 × 2x) = $55x + $85 × 2x

or

$11,900 + $45x + $130x = $55x + $170x

or

$11,900 + $175x = $225x

or

$225x - $175x = $11,900

or

$50x = $11,900

or

x = 238

Hence,

For break-even, number of standard quadcopter sold should be 238

and, number of standard quadcopter sold should be 2 × 238 = 476

To earn $7,700

Earning = Total Revenue - Total cost

$7,700 = ( $55x + $85 × 2x ) - [$11,900 + ($45x + $65 × 2x)]

$7,700 = $225x - $11,900 - $175x

or

$7,700 + $11,900 = $50x

or

$50x = $19,600

or

x = 392

Therefore,

to earn $7,700, number of standard quadcopter sold should be 392

and, number of standard quadcopter sold should be 2 × 392 = 784