We have been asked to analyze our toy products by price (from $10.00 to $13.00 by 0.25) and quantity (from 3,000 to 30,000 by 3,000). Fixed Cost $94,550 Material cost per toy = %3D %3D $4.77 Labor cost per toy $3.17 When the profit $1,210, what was the quantity %3D produced and the price per toy? O 24.000 toys @ $12.00 cach O 21.000 toys@$12.50 cach O 21.000 toys @ $12.75 cach O15.000 Loys @ 511.00 each
Given,
Fixed Cost = $94,550
Material cost per toy = $4.77
Labor cost per toy = $3.17
The profit = $1,210
Now,
Let us assume that the quantity of the toy be X and the price of the toy be P
So,
Total Cost
= Fixed Cost + Variable Cost
= Fixed Cost + X * (Material cost per toy) +X * (Labor cost per toy)
= 94,550 + X(4.77) + X(3.17) = 94,550 + 7.94X
Total Cost = 94,550 + 7.94X
Now,
Total Revenue
= Total Toys Quantity x Price of the Toy
Total Revenue = P*X
Total Profit = Total Revenue - Total Cost
1,210 = PX - (94,550 + 7.94X)
1,210=PX - 94,550 - 7.94X
1210 + 94550 = PX -7.94X
95760 = (P -7.94)*X
The above equation is our final Solution. From here, we put the values of each option. Whatever the option satisfy the above equation, that will be our solution.
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