In Problems 103 and 104, use the following information. In business, a cost equation relates the total cost of producing a product or good such as a refrigerator, rug, or blender to the number of goods produced. The simplest cost model is the linear cost model. In the linear cost model, the slope of the linear equation represents the cost of producing one additional unit of a product. Variable cost is reported as a rate of change, such as $40 per calculator. Examples of variable costs include labor costs and materials. The y-intercept of the linear equation represents the fixed costs of production–these are costs that exist regardless of the level of production. Fixed costs would include the cost of the manufacturing facility and insurance.
104. Cost Equations Manufacturing Costs Suppose the variable cost of manufacturing a cell phone is $35 per phone, and the daily fixed cost is $3600.
- a. Write a linear equation that relates the daily cost y to the number of cell phones manufactured x.
- b. What is the daily cost of manufacturing 400 cell phones?
- c. One day, the total cost was $13,225. How many cell phones were manufactured?
- d. Graph the equation relating cost and number of cell phones manufactured.
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Elementary & Intermediate Algebra