Question

A company manufactures and sells novelty mugs.The manufacturing costs consists of a fixed cost of R8 000 and a variable cost of R 15.00 per mug. The mugs are sold at R35. 00 each. Assume a linear profit function.
Determine the profit function.
What is the Break-even level?
Draw a graph depicting the profit function.

Answer 1

Ok so

8000=cost
profit-8000
then
another cost is 15rand per mug
but profit of 35 rand
35-15=20
profit of 20rand per mug

profit=R20m-R8000
where m=number of mugs sold
(R20 means 20 rand)


f(m)=R20m-R8000

break even means cost=earned
basically, when profit=0
0=R20m-R8000
add 8000 to both sides
R8000=R20m
divide both sides by 20
400=m

break even is 400 mugs


graph should be easy enough
put a point at (0,-8000) and at (400,0) then connect them



profit
f(x)=R20x-R8000
break even is 400 mugs

put points (0,-8000) and (400,0) and connect them