A company sells doughnuts. They incur a fixed cost of $23000 for rent, insurance, and other expenses. It costs $0.1 to produce each doughnut

Question

A company sells doughnuts. They incur a fixed cost of $23000 for rent, insurance, and other expenses. It costs $0.1 to produce each doughnut. The company sells each doughnut for $0.2.
Part A. Construct a linear model that describes their total costs, C, as a function of the number of doughnuts, x, they produce.

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Emery 3 days 2021-10-12T08:23:35+00:00 1 Answer 0

Answers ( )

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    2021-10-12T08:25:01+00:00

    Answer:

    C(x) = 0.1x+23000

    Step-by-step explanation:

    Given that a company sells doughnuts. They incur a fixed cost of $23000 for rent, insurance, and other expenses. It costs $0.1 to produce each doughnut. The company sells each doughnut for $0.2.

    Let X be the no of units produced

    Then we have variable cost = 0.1x

    Fixed cost = 23000 (irrespective of value of x)

    Total cost

    C(x) = 0.1x+23000

    where C represents the total cost and x no of units produced.

    Revenue function would be

    R(x) = 0.2x assuming all doughnuts are sold.

    Profit function would be

    P(X) = 0.1x-23000

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