Pricing

[Blue Bagger]

Hello,

I am again having some problems substituting things to get the answer I need.

i need to find the minimum price needed to make a $5000 profit using the following information:

If 5000 units are sold, fixed costs are $15500 and cost to make each unit is $12 what is the minimum price you can charge to get a profit of $5000.

I really have no. idea where to begin.

Thanks

 

[Romsek]

They don't get much more straightforward than this one. Is there some reason you have no idea where to begin?

Given a price [MATH]p[/MATH] can you figure out what the profit is selling 5000 units?

Profit = (money made from selling the units) - (total cost making the units)

 

[HallsofIvy]

If you sell 5000 things for p dollars each how much money do you make?

If you make 5000 things with "fixed costs are $15500 and cost to make each unit is $12", how much do they cost?

Romsek just told you that profit is "income minus costs".

 

[Steven G]

Hello,

I am again having some problems substituting things to get the answer I need.

i need to find the minimum price needed to make a $5000 profit using the following information:

If 5000 units are sold, fixed costs are $15500 and cost to make each unit is $12 what is the minimum price you can charge to get a profit of $5000.

I really have no. idea where to begin.

Thanks

What costs do you have? You need to pay $15,500 plus $12 five thousand times! This is $15,500 + 60,000 = $75,500

If you want to get back an extra $5,000 then you better sell the 5000 items for $75,500 + $5,000 = $80,500

If there are 5000 items to sell then you must charge how much per item to get back $80,500.

Alternatively, $15,500/ 5000 = $3.10. So the fixed cost per item is $3.10. It cost you $12 to make each item. You want to make $5,000 from the sale of 5000 items. That is you want to make $1 per item. Just add up the correct numbers and you'll have your answer.