A manufacturer sells a product at $8.45 per unit, selling all produced. The fixed cost is $2300 and the variable cost is $7.20 per unit. At what level of production will there be a profit of $5000? At what level of production will there be a loss of $1450? At what level of production will the break-even point occur? There will be a profit of $5000 when the production level is units.

Trigonometry (MindTap Course List)
10th Edition
ISBN:9781337278461
Author:Ron Larson
Publisher:Ron Larson
ChapterP: Prerequisites
SectionP.4: Linear Equations In Two Variables
Problem 8ECP
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A manufacturer sells a product at $8.45 per unit, selling all produced. The fixed cost is $2300 and the variable cost is $7.20 per unit. At what level of production will there
be a profit of $5000? At what level of production will there be a loss of $1450? At what level of production will the break-even point occur?
There will be a profit of $5000 when the production level is
units.
...
Transcribed Image Text:A manufacturer sells a product at $8.45 per unit, selling all produced. The fixed cost is $2300 and the variable cost is $7.20 per unit. At what level of production will there be a profit of $5000? At what level of production will there be a loss of $1450? At what level of production will the break-even point occur? There will be a profit of $5000 when the production level is units. ...
Expert Solution
Step 1

Sol:-

Let's first calculate the profit equation:

Profit = Revenue - Total Cost

Revenue = Price x Quantity

Total Cost = Fixed Cost + Variable Cost x Quantity

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