Question

establish an equation to determine revenue and total cost from a fixed cost of $55, sell price of $15 and labor cost $4. Interpret your result from each.

Answer 1

total cost = fixed cost + labour cost = 55+4 =59
(just sum up the 'cost')
revenue = selling price - total cost
(sub the values)
i wonder why it turns into a loss rather than revenue :S

Answer 2

thats what I can't figure out. so the revenue will be the 59

Answer 3

cuz i have to decide how many pizzas have to be sold to break even

Answer 4

i think that is something about accounting?

Answer 5

what happened to the$15

Answer 6

wait!

Answer 7

i have no idea on what i am doing so i am relying on your help

Answer 8

is labour cost a fixed cost or variable cost?

Answer 9

i have to sell pizzas for 15. fixed cost is 55 and labor cost is 4

Answer 10

i dont have anything on unit contribution margin. i just know how many pizzas must be sold to break even. Where do I include the price of the pizza for $15....you don't mention that again

Answer 11

oh, at break-even point, sale revenue=Fixed cost + variable cost
in your case, let x be the no. of pizza sold
that would be sale revenue=Fixed cost + labour cost
15X = 55+ 4X
X=5
done!

Answer 12

ignore the words 'that would be'

Answer 13

ok now how would i do that if i have to determine profit of selling 500 pizzas. interpret result

Answer 14

but i don't really know if labour cost depends on the no. of unit you produced

Answer 15

the revenue would be the 59 and the total cost is 55

Answer 16

idk either, i will have to talk to teacher again...i just wanted some help getting this done because it is due tmrw and i don't know what i am doing

Answer 17

the revenue would be the 59, is it given in the question or the answer?

Answer 18

it is in the answer

Answer 19

so just to make sure my break even is a profit of 5 pizzas or negative 5

Answer 20

break even actually means that you do not have loss/gain when you produce that amount of product

Answer 21

i just wonder why the revenue is 59, it's true only when you produce one pizza / when the labour cost is the fixed cost

Answer 22

perhaps you can do both cases. above case is when labour cost is a variable cost

Answer 23

establish an equation to determine total cost? So what would the equation be for selling 500 pizzas

Answer 24

for labour cost being the fixed cost,
let x be the no. of pizza sold
that would be sale revenue=Fixed cost + labour cost
15X = 55+ 4
X=3.933

Answer 25

total cost of selling 500 pizzas = 55+4x500 = 2055 (only when labour cost is variable cost, if it is the fixed one, the total cost won't change!)

Answer 26

can you show me how you came up with that x = 3.933 step by step by any chance

Answer 27

ok i apologize i am asking you so many questions, how many pizzas need to be sold to make a profit of $1100.

Answer 28

15X = 55+ 4
15X = 59
X= 59/15
X=3.933

Answer 29

thank you for being patient with me

Answer 30

can you try first, it's similar but using the formula
profit = sale revenue - variable cost - fixed cost

Answer 31

2055= 59 - 4-55

Answer 32

Actually,
Cost = 55 + 4q

Answer 33

Several solvers already responded to your previous posts! It already solved!

Answer 34

i am asking different questions

Answer 35

i have only got one reply back that i can see

Answer 36

It's exactly the same concept!

Answer 37

@Callisto where it confuses you is the labor cost, it should be 4x!

Answer 38

i may be asking the same question because i don't get the concept.

Answer 39

thanks chlorophyll, i thought so :)

Answer 40

Revenue = unit cost * quantity

Answer 41

Do you follow at this point?

Answer 42

the concept is that:
sales revenue = selling price x no. of unit sold
total cost = total fixed cost + total variable cost ,
total variable cost = variable cost per unit x no. of unit sold
to calculate profit, you should use sales revenue - total cost
ie. profit = revenue - cost
at break even point, net profit =0
therefore sales revenue = total cost

Answer 43

@babybluz24149 we'll go step by step!

Answer 44

no im sorry, i hate algebra

Answer 45

Don't think algebra, just like you go sale ice cream!

Answer 46

ok i like money i just don't understand the x and the y concept

Answer 47

for example: 1 ice cream costs $2

Answer 48

then 5 ice creams will be ...

Answer 49

10

Answer 50

See, when you multiply quantity *unit price
you get REVENUE

Answer 51

Is it okie here?

Answer 52

ok i can understand that way. i guess just the way its worded and i have to put in an equation that i have no idea on what i am doing

Answer 53

Trust me, it's not hard at all :)

Answer 54

then assume q is 10 ice cream!

Answer 55

ok

Answer 56

then you set your price $15 per ice cream!

Answer 57

alright

Answer 58

Then, tell me what is your REVENUE here?

Answer 59

150

Answer 60

so that is how i get stuck writing out the equation with an x

Answer 61

Now we different numbers, any number, not just the quantity 10

Answer 62

What is the revenue with any quantity?

Answer 63

@Callisto did you have solution with your post yet?

Answer 64

huh?

Answer 65

@babybluz24149 what is your new revenue with any quantity?

Answer 66

i didn't the one for how many pizzas need to be sold to make a profit of 1,100

Answer 67

don't think about the pizza first! think about ice cream!

Answer 68

You need to get your mind fixed with the revenue here, respond to me!

Answer 69

ok

Answer 70

so what is REVENUE with any number of ice cream?

Answer 71

1100* 10=11000

Answer 72

think about the ice cream first :S

Answer 73

Thanks, Callisto :)

Answer 74

Any number means no number ==> X

Answer 75

@babybluz24149 WHERE ARE YOU?

Answer 76

im still here

Answer 77

sorry

Answer 78

remember you sell 1 ice cream for $15
when you sell 1, you get $15
when you sell 2, you get 2 x $15, that is $30
when you sell 10, you said you'd get $150

Answer 79

right

Answer 80

so how did you work out $150?

Answer 81

Now we're tired of repeated, so we don't want number any more!

Answer 82

multiplied the number of ice cream by the price

Answer 83

Yep, that called REVENUE

Answer 84

ok i got it

Answer 85

hurray!!!

Answer 86

what did you get then?

Answer 87

lol i know how to multiply its what to do and when

Answer 88

Here you already know unit price is $15/ ice cream!

Answer 89

right

Answer 90

the amount is called the revenue

Answer 91

Unfortunately, you want to find the number, quantity of ice cream

Answer 92

ok

Answer 93

chlorophyll, you haven't finished the cost part!

Answer 94

=> REVENUE = 15 * .....

Answer 95

@callisto, Have I type the first sentence is "step by step"

Answer 96

continue then

Answer 97

@babybluz24149 , you still haven't answered what your REVENUE with $15 per ice cream!