Question

A company produces very unusual CD's for which the variable cost is $ 20 per CD and the fixed

costs are $ 30000. They will sell the CD's for $ 49 each. Let x be the number of CD's

produced.

Write the total cost C as a function of the number of CD's produced.

C= $

Write the total revenue R as a function of the number of CD's produced.

R= $

Write the total profit P as a function of the number of CD's produced.

P= $

Find the number of CD's which must be produced to break even.

The number of CD's which must be produced to break even is no

Answer 1

Kindly check explanation

Explanation:

Given that:

Variable cost = $20

Fixed cost = $30000

selling price = $49

Number of CD's produced = x

Cost (C) as a function of number of CD's produced :

Fixed cost + (variable cost * Number produced)

C = $30000 + ($20 * x)

C = $30000 + 20x

Revenue :

Selling price per CD * number of CDs produced

$49 * x

R = 49x

PROFIT:

REVENUE - COST

$30000 + 20x - 49x

30000 - 29x

Number of CD's which must be produced to break even:

Break even quantity = Fixed costs / (Sales price per unit – Variable cost per unit)

Break even quantity = 30000 / (49 - 20)

= 30000 / 29

= 1034.48

= 1034