QUESTION

Units Produced Total Cost 500 \$ 127,000 1000 \$ 154,000 1500 \$

Units Produced                     Total Cost

500                                          \$ 127,000

1000                                        \$ 154,000

1500                                        \$ 196,000

2000                                        \$ 221,000

Selling Price \$85

You expect to sell 300 per month

A.  Graph the data. Is the data approximately linear?

B.   What is your visual estimate of the fixed cost?

C.   Use Regression to fit a linear model to this data. What is the slope and y-intercept on the linear model?

D.  What is the fixed cost and variable cost for this production?

E.   Find the equation for C(x)

F.   Graph C (x) on the data graph from part (a)

G.  Find the equations for R(x) and P(x)

H.  What is the break-even point?

I.     You have just sold your 2,000th unit. How much longer (in time) until you break even?

J.    Graph P(x), R(x), and C(x) on the same set of axis. Graph and label the intersection point.