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05 Jan 2014, 13:13
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E
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Difficulty:
15%
(low)
Question Stats:
82% (01:37) correct
18%
(02:01)
wrong
based on 1500
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A certain manufacturer produces items for which the production costs consist of annual fixed costs totaling $130,000 and variable costs averaging $8 per item. If the manufacturer's selling price per item is $15, how many items must 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
(A) 2,858
(B) 18,667
(C) 21,429
(D) 35,000
(E) 40,000
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05 Jan 2014, 13:13
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SOLUTION
A certain manufacturer produces items for which the production costs consist of annual fixed costs totaling $130,000 and variable costs averaging $8 per item. If the manufacturer's selling price per item is $15, how many items must 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
Profit = Revenue - Cost.
Let x is the number of items the manufacturer must produce and sell.
Profit = 150,000;
Revenue = 15x;
Cost = 130,000 + 8x.
150,000 = 15x - (130,000 + 8x);
280,000 = 7x;
x = 40,000.
Answer: E.
Similar questions to practice:
marginal-cost-is-the-cost-of-increasing-the-quantity-pr-109332.html
the-expenses-of-a-hostel-are-partly-fixed-and-partly-137287.html
A certain manufacturer produces items for which the production costs consist of annual fixed costs totaling $130,000 and variable costs averaging $8 per item. If the manufacturer's selling price per item is $15, how many items must 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
Profit = Revenue - Cost.
Let x is the number of items the manufacturer must produce and sell.
Profit = 150,000;
Revenue = 15x;
Cost = 130,000 + 8x.
150,000 = 15x - (130,000 + 8x);
280,000 = 7x;
x = 40,000.
Answer: E.
Similar questions to practice:
marginal-cost-is-the-cost-of-increasing-the-quantity-pr-109332.html
the-expenses-of-a-hostel-are-partly-fixed-and-partly-137287.html
General Discussion
Updated on: 06 Jan 2014, 02:56
Originally posted by WoundedTiger on 05 Jan 2014, 21:01.
Last edited by WoundedTiger on 06 Jan 2014, 02:56, edited 2 times in total.
Last edited by WoundedTiger on 06 Jan 2014, 02:56, edited 2 times in total.
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A certain manufacturer produces items for which the production costs consist of annual fixed costs totaling $130,000 and variable costs averaging $8 per item. If the manufacturer's selling price per item is $15, how many items must 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
Sol: Let x be the number of items that must be sold to make a annual profit of $150000.
Now Profit= Selling Price - Cost Price
Thus we have 150000= 15x - (130000+8x)-----> 20000= 7x ------> We don't even have to caculate this value because Barring Option A all the other options are automatically ruled out.
Ans is A
(A) 2,858
(B) 18,667
(C) 21,429
(D) 35,000
(E) 40,000
Sol: Let x be the number of items that must be sold to make a annual profit of $150000.
Now Profit= Selling Price - Cost Price
Thus we have 150000= 15x - (130000+8x)-----> 20000= 7x ------> We don't even have to caculate this value because Barring Option A all the other options are automatically ruled out.
Ans is A
