Please help.....I need a step by step answer/explanation.....
It costs $10 to make earphones, and the start-up costs for manufacturing are $5,000. How many earphones must be produced to get to a cost per unit of $20?
a. 100
b. 30
c. 200
d. 500
5000+10x = 20x
I’m still confused :/
To find out how many earphones must be produced to reach a cost per unit of $20, we need to consider the start-up costs and the cost to make each earphone.
Let's break it down step by step:
Step 1: Calculate the total start-up costs.
The start-up costs for manufacturing are given as $5,000.
Step 2: Determine the cost to make each earphone.
The cost to make each earphone is given as $10.
Step 3: Calculate the number of earphones needed to cover the start-up costs.
Divide the start-up costs by the cost to make each earphone:
$5,000 / $10 = 500 earphones
This means that in order to cover the start-up costs, 500 earphones need to be produced.
Step 4: Calculate the additional cost per unit.
To calculate the additional cost per unit, subtract the cost to make each earphone ($10) from the desired cost per unit ($20):
$20 - $10 = $10
Step 5: Calculate the total number of earphones needed to achieve the desired cost per unit.
Divide the additional cost per unit by the cost to make each earphone:
$10 / $10 = 1 earphone
This means that an additional 1 earphone needs to be produced to reach the desired cost per unit.
Step 6: Calculate the total number of earphones needed.
Add the number of earphones needed to cover the start-up costs (500) with the additional earphones needed to achieve the desired cost per unit (1):
500 + 1 = 501 earphones
Therefore, the correct answer is d. 501.