Question

A company makes pens. They sell each pen for $99.
Their revenue is represented by R = 9x.
The cost to make the pens is $11 each with a one time start up cost of $4000.
Their cost is represented by C = 1x + 4000.


a) Find the profit, P, when the company sells 1000 pens.

b) Find the number of pens they need to sell to break even.

Answer 1

Answer:

a) Profit = 84000

b) at break even number of pens sold = 46

Step-by-step explanation:

Profit = Selling price - Cost price

Total revenue generated = 99 * 1000

Total revenue generated = 99000

Total cost on making the pen  = 11 * 1000

Total cost on making the pen = 11000

Total cost including the initial cost = 11000 + 4000

Total cost including the initial cost =  15000

Profit = 99000 - 15000

Profit = 84000

Break even is when the cost are equal to Revenue thus no profit or loss

Revenue = total cost (break even)

9x = 1x + 4000

9x - x = 4000

8x = 4000

x = 500

At breakeven Revenue = 9 * 500

At breakeven Revenue =  4500

since one pen is sold at 99 therefore at break even number of pens sold = 4500/99 = 45.45( to 2 decimal place)

at break even number of pens sold = 46