A computer manufacturer produces a certain electronic component at a c

Question

A computer manufacturer produces a certain electronic component at a cost of $80 per component. Shipping costs for delivering the components are $2 per unit. Further, the manufacturer has costs of $16,500 a month related to the electronic component regardless of how many it produces. If the manufacturer produces and sells 150 components a month, what is the lowest price it can sell them for such that the costs don't exceed the revenues?

A. $28
B. $82
C. $110
D. $138
E. $192

Kudos for a correct solution.

A. $28
B. $82
C. $110
D. $138
E. $192

Kudos for a correct  solution .

crazu4 · Answer

by the question, the equation would be 150 p - 82*150 - 16500 = 0

p being the price we want to find and equation resulting zero means revenue and costs are equal so we can get the minimum price of the component.

solving the equation, we get p = $ 192. Answer E for me.

venkat18290 · Answer

This question can be solved easily using a equation model. 150*p = 16500(fixed cost) + 150*80+150*2. P= $192. Solution time : 45 seconds Suggested method for GMAT: Q: The question says i need to break even, $82 is my component cost. $16500 fixed cost. Look at the options , The gap is very high - Ball park figures work

to recover my fixed cost in 150 units , i need to make a little over $100 right. ( Dont calculate how much exactly, it is a waste of time, ball park figures work) and my component cost is $82. so i need to sell it a little over $182 to break even and $192 is the only option matching our criteria. Solution time: 10 Sec. Time saved : 35 sec.

PareshGmat · Answer

Answer = E. $192

Total cost price per unit  = \frac{16500 + 150*82}{150} = 110 + 82 = 192

Minimum selling price should be 192

Bunuel · Answer

VERITAS PREP OFFICIAL SOLUTION:

Solution: E. For the costs to equal the revenues, align all the costs on one side of the equation and then the revenues on the other: Cost = Revenue.

The costs consist of the $16,500 fixed cost plus $82 per unit, so the costs are 16500 + 82(150). The revenue is the sale price times the number of units, which we know is 150. So our equation is:

16500 + 82(150) = x(150)

Rather than multiply 82 by 150, you may want to finagle the algebra to make it quicker. If you get the 150s on the same side, you can factor them:

16500 = x(150) - 82(150) 16500 = 150(x - 82) 16500/150 = x - 82

Now you can do the division on the left:

16500/150 = 1650/15 = 110

And so 110 = x - 82. Add 82 to both sides and you have your answer: x = 192, answer choice E.

ScottTargetTestPrep · Answer

We are given that each electronic component made costs 80 dollars per component, shipping costs are 2 dollars per unit, and fixed costs = 16,500 dollars per month. We are also given that 150 components are sold in a month, and we need to determine the lowest selling price such that costs ≤ revenues. If we let p = the selling price for each component, we can create the following inequality:

80(150) + 2(150) + 16,500 ≤ 150p

Dividing the entire inequality by 150, we have:

80 + 2 + 110 ≤ p

192 ≤ p

When p ≤ 192, costs do not exceed revenues; thus, $192 is the minimum selling price.

Answer: E

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A computer manufacturer produces a certain electronic component at a c

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A computer manufacturer produces a certain electronic component at a c

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