Question

It costs $10 to make earphones, and the start-up costs for manufacturing are $5,000. How many earphones must be produced to get to a cost per unit of $20 a. 100 b. 30 c. 200 d. 500

Answer 1

With that information we can create the equation

10x + 5000 = 20x

where x is the number of earphones produced

10x is the cost to make each earphone, 5000 being the fixed costs of manufacturing, and 20x being the total revenue of selling each earphone for $20

Now to solve the equation:

subtract both sides by 10x

10x - 10x + 5000 = 20x - 10x

5000 = 10x

Now divide both sides by 10

5000/10 = 10/10 x

500 = x

Answer: D

Hope it helps :)