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Re: A mobile manufacturer produces 500 units of a certain model each month
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08 Apr 2023, 04:25
Let's denote the minimum selling price per unit as "x".
Given:
Number of units produced each month = 500
Cost to produce per unit = $120
Monthly profit target = $40,000
To calculate the monthly profit, we need to subtract the cost to produce from the revenue from sales. The revenue from sales is the selling price per unit multiplied by the number of units sold.
Revenue from sales = Selling price per unit * Number of units sold
Since all 500 units are sold each month, the number of units sold is 500.
So, the monthly profit is given by:
Monthly profit = Revenue from sales - Cost to produce
Monthly profit = (Selling price per unit * Number of units sold) - Cost to produce
Monthly profit = (x * 500) - 120 * 500
Monthly profit = 500x - 60,000
We need to find the minimum selling price per unit (x) that ensures the monthly profit is at least $40,000.
In other words, we need to find the value of x that satisfies the following condition:
500x - 60,000 >= 40,000
Adding 60,000 to both sides of the inequality, we get:
500x >= 100,000
Dividing both sides by 500, we get:
x >= 200
So, the minimum selling price per unit that will ensure a monthly profit of at least $40,000 is $200.
Therefore, the correct answer is: $200.