At a selling price of $ 58 , a lamp company breaks even on total sales of $ 3248 . If the company's overhead is $ 336 , find the marginal production cost per lamp and find the profit on sales of 122 lamps.

The marginal production cost per lamp is ?
The profit on the sales of 122 lamps is ?

Question

At a selling price of $ 58 , a lamp company breaks even on total sales of $ 3248 . If the company's overhead is $ 336 , find the marginal production cost per lamp and find the profit on sales of 122 lamps. 

The marginal production cost per lamp is ?
The profit on the sales of 122 lamps is ?

nurali · Answer

With total sales of $3248 at a sales price of $58 per lamp, you have sold 

3248/58 = 56 lamps. 

If the overhead is $336 then the variable cost of making 56 lamps is $3248 - $336 = $2912 and the variable cost per lamp is $2912/56 = $52 per lamp. 


So if you sell 122 lamps, then 

gross sales = 122*$58 = $7076 
fixed cost (overhead) = $336 
variable cost = 122 * $52 = $6344 
Total Cost = $336 + $6344 = $6680 

Net profit = $7076 - $6680 = $396 
Marginal cost of production = $52

anonymous · Answer

thank you so much! i had the first part of the question right but as i was inputting it into my hw website it says it was was wrong so i was freaking out lol

nurali · Answer

Anytime.