Problema Solution
An electronics company is planning to introduce a new line of computers. For the first year, the fixed costs for setting up the production line are $200 comma 000. The variable costs for producing each computer are $40. The revenue from each computer is $65. Find the total profit P(x) from the production and sale of x computers and the break-even point.
Answer provided by our tutors
The cost for producing 'x' computers is:
C(x) = 200,000 + 40x
The revenue from selling 'x' computers is:
R(x) = 65x
The profit P(x) from the production and sale of x computers is given by the formula:
P(x) = R(x) - C(x)
P(x) = 65x - (200,000 + 40x)
P(x) = 25x - 200,000
The break-even point happens when the profit equals 0:
P(x) = 0
25x - 200,000 = 0
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click here to see the equation solved for x
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x = 8,000 computers
The break-even happens for production and sale of 8,000 computers.