Question

A electronic company has developed a new hand held device the company predicts that the start up cost manufacture the new product will be 125,000 and the cost to make one device will be 7.15.

Suppose the company wants to start making a profit after selling the number of devices of 50000. What should the new wholesale price be? Explain how you found your answer.

Answer 1

profit = revenue - expenses

expenses : 125,000 + 6.50x

revenue : 9x

so to make a profit, ur revenue (income) has to be higher then ur expenses

revenue > expenses

A. ) 9x > 125,000 + 6.50x

9x - 6.50x > 125,000

2.5x > 125,000

x > 125,000 / 2.5

x > 50,000......so they would have to sell at least 50,001 devices to make a profit <==

B.) the cost of making 1 device is 10% more then the company predicted....10% more then 6.50.....6.50(1.10) = 7.15.....this is the new cost of making 1 device <==

9x > 125,000 + 7.15x ....this is the inequality with the 10% more added

9x - 7.15x > 125,000

1.85x > 125,000

x > 125,000 / 1.85

x > 67,567.5......so to make a profit, they would have to sell at least 67,568 devices to make a profit <==

Explanation: