Question

A company has fixed operating costs of $2,137.00 per month with a production cost of $15.15 per unit. If each unit brings $33.09 in revenue, which of the folowing equations represents the profit for the month? Let x represent the number of units made per month and y represent the total profit for the month. Explain your choice.
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Answer 1

Y=2,137.00-(15.15*X)+(33.09*X)

Its simple arithmetic when you get down to it. The $2,137 won't change because it is the base rate per month, meaning even if they don't make any units they will still earn that much in the month. You subtract from that the cost to make a unit, in this case it is $15.15 per unit, so you multiply the cost by number of units to get the month's total costs. Then add the total month's profits by multiplying the number of units by the profits of one unit.