Homework Sourse6A manufacturer sells belts for 12 per unit The fixed costs
6.A manufacturer sells belts for $12 per unit. The fixed costs are $2000 per month, and the variable cost per unit is $8.
(a) Write the equations of the revenue R(x) and cost C(x) functions.
R(x) = ____
C(x) =______
(b) Find the break-even point.
It takes _____ units to break even.
Solution
(a) If manufacturer produces x units of belts then
R(x) = Selling price per unit * Number of units sold = 12 * x
= 12 x
The total cost of production is
C(x) = Fixed cost + Variable cost
= 2000 + 8 x
(b) At the break even point, we have
12 x = 2000 + 8 x
or, 4 x = 2000
or, x = 500 units
