Question

A company sells a product for $72 each. The variable costs are $15 per unit and fixed costs are $29,697 per month

Answer 1

Step 1

Given;

Step 2

A)

`\begin{gathered} Revenue=\text{ Number of units sold }*\text{ cost per unit} \\ Let\text{ each quant}\imaginaryI\text{ty of good sold be x} \\ cost\text{ per unit= \$72} \\ TR=72* x=72x \\ \end{gathered}`
`\begin{gathered} B)\text{ }total\text{ cost=f}\imaginaryI\text{xed cost + var}\imaginaryI\text{able cost} \\ TC=29697+15x \end{gathered}`

C)At breakeven, TR = TC

`\begin{gathered} 72n=29697+15x \\ 72x-15x=29697 \\ 57x=29697 \\ x=(29697)/(57)=521 \end{gathered}`

the number of units needed to breakeven is 521

D) To calculate the TR, we substitute 521 for n in the given function for TR as seen below:

`\begin{gathered} TR=72x \\ TR=72(521)=\text{ \$}37512 \end{gathered}`

TR = $37512

Answers;

`\begin{gathered} A)\text{ 72x} \\ B)\text{ 29697 +15x} \\ C)\text{ 521 units} \\ D)\text{ \$37512} \end{gathered}`