Question

A company manufactures and sells personalized stationery. The weekly fixed cost is $3850 and it cost $3.00 to produce each package of stationery. The selling price is $6.50 per package. How many packages of stationery must be produced and sold each week for the company to generate a profit?
The company will generate a profit if;
more than or equal to
more than
less than or equal to
less than
|blank|packages of stationery are produced and sold each week.

(sorry forgot to add that part in last question, hope this one is better)

Answer 1

Answer:

  more than 1100

Step-by-step explanation:

The contribution margin for each package sold is ...

  $6.50 -3.00 = $3.50

The number of packages that must be sold to cover fixed costs is ...

  3.50n > 3850

  n > 1100 . . . . . . . divide by 3.50

The company will generate a profit if more than 1100 packages are produced and sold each week.

_____

Additional comment

If exactly 1100 packages are sold, then costs are covered, but profit is 0. In order for profit to be positive, more than 1100 packages must be sold.