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A certain manufacturer produces items for which the producti

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A certain manufacturer produces items for which the producti [#permalink] New post 01 Mar 2011, 08:16
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A
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E

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Question Stats:

78% (01:51) correct 22% (02:10) wrong based on 41 sessions
A certain manufacturer produces items for which the production costs consist of annual fixed costs totaling $130,000 and variables costs averaging $8 per item. If the manufacturer’s selling price per item is $15, how many items the manufacturer produce and sell to earn an annual profit of $150,000?

(A) 2,858
(B) 18,667
(C) 21,429
(D) 35,000
(E) 40,000
[Reveal] Spoiler: OA

Last edited by Bunuel on 12 Sep 2013, 01:43, edited 1 time in total.
Renamed the topic, edited the question and added the OA.
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Re: Manufacturer [#permalink] New post 01 Mar 2011, 08:26
Let the items manufactured or sold be "x"

130000+8x = 15x-150000
7x = 280000
x = 40000

Ans: "E"
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Re: Manufacturer [#permalink] New post 12 Sep 2013, 01:30
E is the Right as per view you. Nice calculation provided by fluke to understand the quest.

http://www.somatextiles.com/home.php/te ... g-industry

Last edited by jitenrajput9 on 12 Sep 2013, 01:48, edited 1 time in total.
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Re: A certain manufacturer produces items for which the producti [#permalink] New post 12 Sep 2013, 01:46
Expert's post
Madelaine88 wrote:
A certain manufacturer produces items for which the production costs consist of annual fixed costs totaling $130,000 and variables costs averaging $8 per item. If the manufacturer’s selling price per item is $15, how many items the manufacturer produce and sell to earn an annual profit of $150,000?

(A) 2,858
(B) 18,667
(C) 21,429
(D) 35,000
(E) 40,000


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Re: A certain manufacturer produces items for which the producti [#permalink] New post 12 Sep 2013, 21:09
If the sell price is $15 and the cost is $8 per item, then there's a profit of $7/item

To make up the $130,000 fixed cost and make $150,000 in profit, we need to have $280,000 in revenue.

7X = 280,000

X = 40,000 items

Choice E

t1000
Re: A certain manufacturer produces items for which the producti   [#permalink] 12 Sep 2013, 21:09
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