A company that produces custom bike license plates spends $5525 per month in building overhead plus $2.50 per license plate. If the plates sell for $5.99, how many plates must the company sell each month before making a profit? Plz help. Thanks?
5.99x > 5525 + 2.50x
To determine the number of license plates the company needs to sell each month before making a profit, we need to analyze the costs and revenue for each plate.
Let's break down the costs:
- Building overhead: $5525 per month
- Cost per license plate: $2.50
The total cost per plate is the sum of building overhead and the cost per plate:
Total cost per plate = Building overhead + Cost per plate = $5525 + $2.50 = $5527.50
Now, let's consider the revenue:
Selling price per plate: $5.99
To find the number of plates the company needs to sell before making a profit, we'll set up an equation:
Total revenue = Total cost
Number of plates to be sold * Selling price per plate = Number of plates to be sold * Total cost per plate
Number of plates to be sold * $5.99 = Number of plates to be sold * $5527.50
Cancelling out the "Number of plates to be sold" on both sides, we get:
$5.99 = $5527.50
This equation is not possible as it's stating that $5.99 is equal to $5527.50. Hence, the company cannot make a profit by selling license plates at the given cost and price.
To make a profit, the company needs to either increase the selling price per plate or reduce the total cost per plate.