A small software company invests $16,000 to produce a software package that will sell for $49.75. Each unit costs $7.40 to produce. (Round your answers to the nearest whole number.)(a) How many units must the company sell to break even?(b) How many units must the company sell to make a profit of $90,000?

Respuesta :

Answer:

[tex]378,1748[/tex]

Step-by-step explanation:

GIVEN: A small software company invests [tex]\$16,000[/tex] to produce a software package that will sell for [tex]\$49.75[/tex]. Each unit costs [tex]\$7.40[/tex] to produce. (Round your answers to the nearest whole number).

TO FIND: (a) How many units must the company sell to break even?(b) How many units must the company sell to make a profit of [tex]\$90,000[/tex]?

SOLUTION:

Fixed cost for production of Software package [tex]=\$16000[/tex]

Selling price of Software package [tex]=\$49.75[/tex]

price of producing each unit of software package [tex]=\$7.4[/tex]

Let total units sold be [tex]x[/tex]

Total profit [tex]=(\$49.75-\$7.4)x-\$16000[/tex]

                  [tex]=\$42.35x-\$16000[/tex]

(a)

for company to break even, [tex]\text{Total profit}=0[/tex]

                       [tex]\$42.35x-\$16000=0[/tex]

                       [tex]\$42.35x=\$16000[/tex]

                       [tex]x=\frac{16000}{42.35}[/tex]

                      [tex]x\approx378[/tex]

company will have to sell at least [tex]378[/tex] units.

(b)

for company to make total profit of [tex]\$90000[/tex]

                       [tex]\$42.35x-\$16000=\$90000[/tex]

                      [tex]x=\frac{74000}{42.35}[/tex]

                      [tex]x\approx1748[/tex]      

company will have to sell at least [tex]1748[/tex] units