Question

The RideEm Bicycles factory can produce 150 bicycles in a day at a total cost of $10,700. It can produce 170 bicycles in a day at a total cost of $11,500. What are the company's daily fixed costs (in dollars)

Answer 1

See below

Step-by-step explanation:

From the above, we can make c to be fixed cost, b cost of bicycle

C + 150b = 10,700 equation 1

C + 170b = 11,500 equation 2

From equation, we can make c the subject

C = 10,700 - 150b

Substitute for C in equation 2

10,700 - 150b + 170b = 11,500

-150b + 170b = 11,500 - 10,700

20b = 800

b = 40

We would also get the value for C

Substitute for C in equation 1

C + 150b = 10,700

C + 150(40) = 10,700

C + 6,000 = 10,700

C = 10,700 - 6,000

= -4,700

Therefore, the company's daily fixed cost is -$4,700