Question

A company buys, sells, and repairs old computers. Rebuilt computers sell for $1000 per unit. Fixed cost of equipment to rebuild computers is $16,000. Variable cost for repair material is $600 per unit. Which of the following equation representing this situation?

Answer 1

The equation representing this situation is: Total revenue = $1000 * Number of units, or Total cost = $16,000 + ($600 * Number of units).

Step-by-step explanation:

The equation representing this situation is:

Total cost = Fixed cost + (Variable cost per unit * Number of units)

Given information:

• Fixed cost = $16,000
• Variable cost per unit = $600

Let's substitute these values into the equation:

Total cost = $16,000 + ($600 * Number of units)

Since the selling price per unit is $1000, the equation can also be written as:

Total revenue = Selling price per unit * Number of units

So, the equation representing this situation is:

Total revenue = $1000 * Number of units