Question

A computer system was purchased by a small business for $12,000 and, for tax purposes, is assumed to have a salvage value of $2,000 after 8 years. If its value is depreciated linearly from $12,000 to $2,000, find the linear equation that relates the value V in dollars to the time t in years. A video production company is planning to produce instructional videotape. The producer estimates that it will cost $84,000 to shoot the video and $15 per unit to copy and distribute the tape. The wholesale price of the tape is $50 per unit. How many units must be manufactured and sold each month for the company to break even?

Answer 1

Second question

In order to break even,

total revenue must be equal to total cost. In this case, there is no profit

Let x represent the number of units of tape that would be manufactured to break even.

From the information given,

cost of shooting the video = 84000

If the cost of producing a unit is $15, it means that the cost of x units would be 15x

The total cost of producing x units is

15x + 84000

The wholesale price of the tape is $50 per unit. It means that the revenue from selling x units would be 50x

To break even, it means that

15x + 84000 = 50x

50x - 15x = 84000

35x - 84000

x = 84000/35

x = 2400

2400 units must be manufactured and sold each month for the company to break even