Question

Please show all work/steps so I can understand, also please answer ASAP thank you!!!

Amy has started her own company, Amy Shirts, which makes Custom Embroidered Logo polo shirts for special orders. Since she has just begun this operation, she rents the equipment from a local shop when necessary. The cost of using the equipment is $650. The materials used in one shirt cost $12. Amy can sell these shirts for $25 each.

(a) How many shirts must Amy sell to break even?

(b) What is the total revenue for this (i.e., break even)?

(c) How many shirts must Amy sell to make a profit of $250?

Answer 1

Given,

The materials used in one shirt cost $12.

The selling cost of each shirt is $25.

The cost of using the equipment is $650.

Let us assume that amy has to sell a shirts to break even.

Total earning by selling a tshirts = 25 x a

Total money spent on making of a shirts = 650 + 12 x a

a) For break even ,

650 + 12 x a = 25 x a

or, 13 x a = 650

or, a = 50.

Amy must sell 50 shirts to break even.

b) The total revenue for break even = 25 x a

= 25 x 50

= $ 1250

c) Let's assume that amy must sell b shirts to gain $ 250 profit.

so,

25 x b - (650 + 12 x b) = 250

or, 13 x b = 250 + 650

or, 13 x b = 900

or, b = 69.230

so, amy must sell 70 shirts to make a profit of $ 250.