Lesson33

# Lesson33 - MA 15200 Lesson 33 Section 5.1(part 2 This is...

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1 MA 15200 Lesson 33, Section 5.1 (part 2) This is the first of two lessons of applied problems using a system of linear equations (linear system). I Break-Even Analysis The Revenue of a company is the money generated by sells of the product. The Cost to a company is the sum of any fixed costs and the cost of producing the product. If a company produces and sells x number of a product, its Revenue Function and Cost Function are represented by ( ) (price per unit) ( ) fixed cost + (cost per unit) y R x x y C x x = = = = These are both linear functions. In the revenue function, the price per unit is the slope. In the cost function, the cost per unit is the slope. When graphed, these lines will intersect. The point of intersection is called the break-even point . The x -coordinate will be the number of units of the product and the y -coordinate will be the amount of money coming in from sells and the amount of money going out for costs. Ex 1: A manufacturer of CDs have determined that monthly fixed costs to make the CDs are \$337,500. It costs \$3.50 to make a CD. Each CD that is made can be

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Lesson33 - MA 15200 Lesson 33 Section 5.1(part 2 This is...

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