Question

Given sales price=100, variable cost per unit =20, total fixed cost =300, Profit=500.Calculate the number of units

Answer 1

In order to calculate the number of units sold, we can use the formula below:

`\text{Profit}=\text{ Revenue}-\text{ Cost}`

The revenue is given by the earnings from selling the units, so using the variable x to represent the number of units sold, the revenue is given by 100x.

The cost is given by the fixed cost of $300 plus the variable cost of $20 per unit, so the total cost is given by 300 + 20x.

Now, writing the equation and solving it for x, we have:

`\begin{gathered} P=R-C \\ 500=100x-(300+20x) \\ 500=100x-300-20x \\ 100x-20x=500+300 \\ 80x=800 \\ x=(800)/(80) \\ x=10 \end{gathered}`

Therefore the number of units sold is 10.