A small plant manufactures riding lawn mowers. The plant has fixed costs (leases, insurance, etc.) of $48,000
Question:
A small plant manufactures riding lawn mowers. The plant has fixed costs (leases, insurance, etc.) of $48,000 per day and variable costs (labor, materials, etc.) of $1,400 per unit produced. The mowers are sold for $1,800 each. So the cost and revenue equations are
y = 48,000 + 1,400x Cost equation
y = 1,800x Revenue equation
where x is the total number of mowers produced and sold each day. The daily costs and revenue are in dollars.
(A) How many units must be manufactured and sold each day for the company to break even?
(B) Graph both equations in the same coordinate system and show the break-even point. Interpret the regions between the lines to the left and to the right of the break-even point.
Step by Step Answer:
College Mathematics For Business Economics, Life Sciences, And Social Sciences
ISBN: 978-0134674148
14th Edition
Authors: Raymond Barnett, Michael Ziegler, Karl Byleen, Christopher Stocker