Answer to Question #314680 in Quantitative Methods for vanskie

Question

B. The O'Neill Shoe Manufacturing Company will produce a special-style shoe if the order size is large enough to provide a reasonable profit. For each special-style order, the company incurs a fixed cost of $1000 for the production setup. The variable cost is $30 per pair, and each pair sells for $40.

a. Let x indicate the number of pairs of shoes produced. Develop a mathematical mode

for the total cost of producing repairs of shoes.

b. Let P indicate the total profit. Develop a mathematical model for the total profit realized from an order for x pairs of shoes.

c. What is the breakeven point?

Answer 1

a. Total_cost = $30*x + $1000

b. The total profit p = $40*x - ($30*x + $1000)

c. The breakeven point is when the total profit is equal 0, that is p = 40*x -(30*x + 1000) = 0, so x = 100