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bulgar [2K]
3 years ago
13

A company produces 10 items, charges $45 per item. When it produces 20 items, it charges $40 per item. Cost to produce 10 items

is $450, cost to produce 20 items is $650. What is the price, cost, revenue, profit functions. What is the break-even points, max profit and items to produce to get max profit.
Business
1 answer:
chubhunter [2.5K]3 years ago
5 0

Answer:

a. The price, cost, revenue, profit function = Revenue - Cost = (price * quantity - cost)

b. Break-even point = Total Revenue = Total Cost

= $450 = $450

break-even point in units = 10 items

c. Maximum profit = $150

Items to produce to get max profit = 20 items

Explanation:

a) Data and Calculations:

Sales Revenue for 10 items = $450 ($45 * 10)

Cost of sales for 10 items = $450

Sales Revenue for 20 items = $800 ($40 * 20)

Cost of sales for 20 items = $650

The price, cost, revenue, profit function = Revenue - Cost = (price * quantity - cost)

For 10 items, function yields = {($45 * 10) - $450} = 0

For 20 items, function yields = {($40 * 20) - $650} = $150

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Answer:

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