A factory produces x widgets per day. The factory's fixed costs are $8

Question

A factory produces x widgets per day. The factory's fixed costs are $8000 per day. The price per widget is $80 and the variable costs are $20 per widget. How many widgets need to be produced for profits of $5440 a day?

A. 42.33
B. 90.33
C. 168
D. 224
E. 400

Kudos for a correct solution.

A. 42.33
B. 90.33
C. 168
D. 224
E. 400

Kudos for a correct  solution .

gmat6nplus1 · Answer

profits=5440=60x-8000 --> x=224

Answer D.

ynaikavde · Answer

To make a profit we have to sell stuff at 8000+5440 = 13440
the actual selling price per widget is 80 - 20 = 60 so number of widget we need to sell = 13440/60=224>D

Bunuel · Answer

VERITAS PREP OFFICIAL SOLUTION:

Solution: D. Because the price of a widget is $80 and the factory cost is $20 per widget, the profit-per-widget is $60. And since the factory needs to make up its $8000 fixed cost and then make $5440 profit, we can set up an equation:

60x = 8000 + 5440 60x = 13440 6x = 1344

At this point, you can probably get away with an estimate if you look at the answer choices. You know that 6 * 200 is 1200, so you need a number that's a little more than 200. The only one anywhere near that range is answer choice D, 224. Alternatively you could do the division to solve for x. 1344/6 = 224.

GmatPrime · Answer

Profit = Revenue - (Fixed Cost + Variable cost)

Given, 
Total widgets produced per day=x
Therefore, Revenue= Selling Price of 1 widget*x = 80x
And, Variable cost= Cost to make 1 widget*x = 20x

Let's setup the equation now:
5440 = 80x- (8000 + 20x)
13440= 80x-20x
x=13440/60
x= 224

Thus, 224 widgets need to be produced every day to make the said profit.

MHIKER · Answer

The good formula for such PS is

Sales = Variable cost + Fixed cost + Profit

80x=20x+8000+5440 [If the question says profit and cost is equal then put 0 for profit)

⇒ 60x=13440

⇒x=224 units

The answer is D

Chibvike · Answer

The net of the selling price and the variable costs is
80-20 = 60

We can then form the equation
60*x - 8000 = 5440

When simplified, x = 224

Answer choice D

A factory produces x widgets per day. The factory's fixed costs are $8

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GMAT Problem Solving (PS) Questions

A factory produces x widgets per day. The factory's fixed costs are $8

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