Q:

A camera manufacturer spends $1,800 each day for overhead expenses plus $9 per camera for labor and materials. The cameras sell for $18each. a. How many cameras must the company sell in one day to equal its daily costs? b. If the manufacturer can increase production by 50cameras per day, what would their daily profit be?

Accepted Solution

A:
Amount of money spent per day = $1800Cost of overhead expenses per day for labor and materials = $9Selling price of each camera = $18a. Let us assume the number of cameras manufactured per day = x dollarsThenCost of cameras sold in 1 day = 18xSo18x = 1800 + 9x18x - 9x = 18009x = 1800x = 200From the above deduction, we can conclude that the number cameras sold per day is 200b. Daily selling amount of 250 cameras = 250 * 18                                                               = 4500 dollarsDaily manufacturing price of 250 cameras = 1800 + (9 * 250)                                                                    = 4050 dollarsThenDaily profit = 4500 - 4050                  = 450 dollars