Question

he cost for producing a certain product is $37 each. The fixed costs are $70,000. The selling price for each product is $72. 1. What is the revenue function? a. R(x) = 37x – 70,000 b. R(x) = 37x c. R(x) = 72x + 70,000 d. R(x) = 72x – 70,000 e. R(x) = 72x 2. What is the profit function? a. P(x) = 72x – 70,000 b. P(x) = 35x – 70,000 c. P(x) = 37x + 70,000 d. P(x) = 35x + 70,000 e. P(x) = 72x + 70,000 . 3. What is the break-even quantity? a. 2,500 b. 4,800 c. 1,846 d. 2,000 e. 4,500 4. What is the break-even point

Answer 1

Answer:

Instructions are listed below

Explanation:

Giving the following information:

The Variable unitary cost= $37 each.

The fixed costs are $70,000.

The selling price for each product is $72.

1) revenue function= P*X

Revenue function= 72*x

Option E

2) Profit function= (P-Vc)*X-Fc

Profit function= 35*x-70000

Option B

3) break-even quantity= fixed costs/contribution margin

break-even quantity= 70000/35= 2000 units

Option D

4)  break-even point ($)=fixed costs/contribution margin ratio

Contribution margin ratio= contribution margin/P= 0,49

break-even point ($)=70000/0,4861111= $144000