Question

A new company manufactures tennis rackets. The fixed expenses are $78,490 and the variable expenses are $14 per racket produced. What is the expense of producing 3,500 rackets?

Answer 1

The solution for the problem follows:

Expense = variable expenses * quantity of produced + fixed expenses

= 14q + 78,490

= 14 (3500) + 78, 490

= 49000 + 78,490

= $127, 490 is the total expense for 3,500 tennis rackets

Get the per piece expense by dividing 127,490 to 3500

Expense per piece = 127,490 / 3500

= $36.43