PART III

You operate a local business with two other partners. Your role is to work with variable & fixed costs, as well as revenue to determine the total profit your inventory can produce. Your analysis also includes break-even points and determining when the firm should be in shut-down.

1. If the fixed costs related to Inventory Item B are $4500, determine a formula for the total cost of Inventory Item B (you may take the net price as the per unit cost). Using the selling price your partner found in Part I as the per unit revenue p, determine the total revenue function for Inventory Item B. What is your total revenue for selling 100 units of Item B? What are the total costs with selling 100 units of Item B?

2. Determine the total profit function for Inventory Item B. When would your business be in shut-down with regards to Inventory Item B? 3. Roughly how many units of Inventory Item B have to be sold in order to break even? Roughly how many have to be sold to realize a profit of $10,000?