XYZ Company plans to market a new
product.Based on its market studies,the
company estimates that it can sell 5500
units in 2004.The selling price will be birr
2 per unit.Variable costs are estimated to
be 40% of the selling price.Fixed costs are
estimated to be $ 600 A)Develop the
revenue,cost and profit functions interms
of sales and quantity B) What is the break
even point in units and in birr? C) If the
company faces a loss of 4000 birr what
will be the sales? D)Support your answer
using the break-even chart (Show all the
necessary lines and points E) If the
company is sure of selling 5500 units
every year,Determine the least price that
should be charged in order to guarantee
no loss.
variable cost is 0.40 * 2 - 0.80 per unit
so, for x units
cost c(x) = 600 + 0.80 x
revenue r(x) = 2x
profit = r(x)-c(x) = 1.20x - 600
now you can answer the questions