A computer manufacturer produces a certain electronic component at a cost of $75 per component.
A computer manufacturer produces a certain electronic component at a cost of $75 per component. Shipping costs for delivering the components are $2 per unit. Further, the manufacturer has costs of $16,500 a month related to the electronic component regardless of how many it produces. If the manufacturer produces and sells 150 components a month, what is the lowest price it can sell them for such that the costs don't exceed the revenues?
Answer/Solution
$187
Steps/Work
This question can be solved easily using a equation model.
150*p = 16500(fixed cost) + 150*75+150*2.
= 16500 + 11250 + 300
P= $187
B
150*p = 16500(fixed cost) + 150*75+150*2.
= 16500 + 11250 + 300
P= $187
B