Explanation Given Information: The Oliver Company is planning to market new product and estimate the number of units it can sell in 2005 is up to 5500 where, the selling price will be $ 2 per unit and the variable cost and fixed costs are estimated to be 40 % of total revenue and $ 6000 respectively for the year 2005 . Formula used: The revenue is basically the amount that is obtained by selling x number of copies at a particular selling price as, R ( x ) = number of copies × selling price of each copy The profit is basically the amount that is obtained by subtracting the cost price from selling price as, P ( x ) = R ( x ) − C ( x ) Where the cost of the function is the sum of variable cost which depends on x and the fixed cost as, C ( x ) = m x + b Calculation: The revenue is basically the amount that is obtained by selling x number of units at a particular selling price. Since, the selling price of each unit is $ 2 . Thus, the revenue function is R ( x ) = 2 × x = 2 x The cost function is the sum of variable cost which depends on x and the fixed cost as, C ( x ) = m x + b Here, the variable cost is 40 % of total revenue and the fixed cost is $ 6000

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ISBN: 9781337280426

Author: Stefan Waner, Steven Costenoble

Publisher: Cengage Learning

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Chapter 1.2, Problem 27E

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To calculate: The number of units that must be sold by the company to break even, if the Oliver Company is planning to market new product and estimate the number of units it can sell in 2005 is up to 5500 where, the selling price will be $2 per unit and the variable cost and fixed costs are estimated to be 40% of total revenue and $6000 respectively for the year 2005.

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Chapter 1.2, Problem 26E

Chapter 1.2, Problem 28E

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Solution Summary: The Oliver Company is planning to market new product and estimate the number of units it can sell in 2005 is up to 5500 where, the selling price will be 2 per unit and the variable cost and

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