Question

A store sells toaster ovenstoaster ovens for ​$4646 ​each, retail price. The wholesale cost to stock the ovensovens is $ 28$28 each. The fixed cost associated with acquiring the ovensovens​, storing them in​ inventory, using shelf​ space, and advertising the ovensovens for sale is ​$25002500. a. Write a function for the total cost of stocking the ovensovens for sale. b. Write a function for the total revenue received from selling the ovensovens. c. Write a system of equations and determine the number of ovensovens that must be sold to break even.

Answer 1

Selling price = $46 per toaster

Stocking cost = $28 per toaster
Fixed cost = $2500

a) Let the number of toasters be 'x'
    The total cost of stocking for sale = 28x + 2500

b) Let the number of toasters be 'x'
    Total revenue received from selling the toasters = 46x

c) Break-even is when the cost of production is equal to profit made
    So, we can set up the break-even equation as:
    Production cost = Revenue cost
    28x + 2500 = 46x
    2500 = 46x - 28x
    2500 = 18x
    x = 138.9 ⇒ Rounded to 139 ovens