Question

A video manufacturer spends $1250 each day for overhead expenses plus $4 per video for labor and materials. The videos sell for $12 each. How many videos must the company sell in one day to equal its daily costs? If the manufacturer can increase production by 20 videos per day, what would their daily profit be?

Answer 1

Let, x number of video were manufactured per day.

Expense per day :

1250 - 4x

Now, income per day :

12x

Profit is given by :

`P=12x-(1250-4x)\\\\P=16x-1250` ......1 )

1) How many videos must the company sell in one day to equal its daily costs.

So, P =0

0 = 16x - 1250

x = 78.125

So, at least 79 video per day should be sell.

2) If the manufacturer can increase production by 20 videos per day, what would their daily profit be.

Here, x = 79 + 20 = 99

Putting this in equation 1 ) we get :

`P=16* 99-1250\\\\P=\$334`

Hence, this is the required solution.