The O'Neill Shoe Manufacturing Company will produce a special-style shoe if the order size is large enough to provide a reasonable profit. For each special-style order, the company incurs a fixed cost of $2,625 for the production setup. The variable cost is $55 per pair, and each pair sells for $80. (a) Let x indicate the number of pairs of shoes produced. Develop a mathematical model for the total cost (C) of producing x pairs of shoes. C = (b) Let P indicate the total profit. Develop a mathematical model for the total profit realized from an order for x pairs of shoes. P = (c) How large must the shoe order be before O'Neill will break even? x =
The O'Neill Shoe Manufacturing Company will produce a special-style shoe if the order size is large enough to provide a reasonable profit. For each special-style order, the company incurs a fixed cost of $2,625 for the production setup. The variable cost is $55 per pair, and each pair sells for $80. (a) Let x indicate the number of pairs of shoes produced. Develop a mathematical model for the total cost (C) of producing x pairs of shoes. C = (b) Let P indicate the total profit. Develop a mathematical model for the total profit realized from an order for x pairs of shoes. P = (c) How large must the shoe order be before O'Neill will break even? x =
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter9: Applications Of Cost Theory
Section: Chapter Questions
Problem 1.2CE
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The O'Neill Shoe Manufacturing Company will produce a special-style shoe if the order size is large enough to provide a reasonable profit. For each special-style order, the company incurs a fixed cost of $2,625 for the production setup. The variable cost is $55 per pair, and each pair sells for $80.
(a)
Let x indicate the number of pairs of shoes produced. Develop a mathematical model for the total cost (C) of producing x pairs of shoes.
C =
(b)
Let P indicate the total profit. Develop a mathematical model for the total profit realized from an order for x pairs of shoes.
P =
(c)
How large must the shoe order be before O'Neill will break even?
x =
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