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Suppose that the fixed cost for a product is $400 and the break-even quantity is 80. find the marginal profit (the slope of the linear ptofit function)

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Posted on Jan 02, 2017

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SOURCE: I must not understand what a margin is so could

Hi,
I think you should refer to you definitions. The 20% is called the markup. The profit margin is calculated with respect to the revenue. So you should divide the 400$ by 2400$ to get a net profit margin of 400/2400 =0.1667 or 16.67% (And we are not taking into account the taxes).

Margin = Markup /(price + Markup)
Markup = Margin* (Price +Markup)
Markup = Margin*Markup + Margin* Price
Markup*(1-Margin) =Margin*Price
Markup = Margin*Price/( 1-Margin)
For Price =2000, Margin =0.2 (that is 20%)
Markup = 0.2*2000(1-0.8) =0.2*2000/0.8
Markup = 2000*(0.2/0.8)= 2000*0.25 = 500

Thus to have a (net) profit margin of 20%, an item costing 2000$ must be marked up by 500$.

Try not to reason with numbers. Write the defining relation and use algebra to isolate for the variable you seek.

Hope it helps.
Thank you for using Fixya and for rating this solution.


Posted on Dec 01, 2009

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SOURCE: if x units of a product cost C dollars to make and

Set C = R
This means 16X - 20000 = 14X
Add -16X to both sides
-20000 = -2X
Divide both sides by -2
10000 = X

This means that the break even point is 10000 units.

Posted on Jan 27, 2011

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SOURCE: The total cost paid for the memorial service was $450.00. The supplies were $65.06, the labor was $50.00, how do we calculate the profit margins?

450 minus 65.06 minus 50 equals net
450 divided by net = percent of profit move decimal 2 places to the right

Posted on Nov 02, 2016

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The total cost paid for the memorial service was $450.00. The supplies were $65.06, the labor was $50.00, how do we calculate the profit margins?


450 minus 65.06 minus 50 equals net
450 divided by net = percent of profit move decimal 2 places to the right

Nov 02, 2016 | Office Equipment & Supplies

1 Answer

I am trying to figure out how to use the Cost, Sell, and margin buttons on this calculator...any insight?


I haven't used a calculator with these functions, so let's do a test.

I'm guessing is it for doing basic accounting. The equation is Sales - Costs = Gross Profit and maybe Gross Profit / Sales = Gross Margin.

If we enter 100 in sell, 40 in cost, does the margin come out to be 60 or 0.6? If it comes out to 60, the margin is the Gross Profit. If it comes out to 0.6, then the margin is Gross Margin.

Good luck,

Paul

May 12, 2016 | Office Equipment & Supplies

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Water is leaking into my gas tank and freezing; how do I fix?


The gasoline system is a sealed system. Water should not be able to get in there. Some condensation CAN occur, but not in sufficient quantities to cause icing in the tank. You need to check where you are getting your fuel from as they may be having issues with water getting into their underground tanks. Some shady operators even water down their fuel to make larger profits.

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How to write equations in slope intercept form


A great tutorial: https://www.khanacademy.org/math/cc-eighth-grade-math/cc-8th-linear-equations-functions/8th-slope-intercept-form/v/linear-equations-in-slope-intercept-form

Mar 17, 2015 | math.com Computers & Internet

1 Answer

What is the break even point (quantity) if the buying price of a basket remains N1000 and the selling price is N5


Break-even point is that level of production at which a business unit makes no profit and no loss. The level of production and sales at which the income covers all variable and fixed costs of the business is termed the break-even point.

Divide total costs (Here 1000) by the selling price (5) to determine how many units must be sold to break even. Hence 1000/5=200.

If you only sell 199, you are losing money and have not achieved break even.

Mar 04, 2015 | Computers & Internet

1 Answer

How do you grsph a slope?


You do not graph a slope as the slope is just one number that characterises a linear function. Rather you need to draw the linear function.
Press the Y= key to enter the function editor. On line Y1= type in a legitimate function such as y1= 3x-2 and press ENTER. Press the GRAPH key to view the graph.

Sep 24, 2011 | Texas Instruments TI-83 Plus Calculator

1 Answer

If x units of a product cost C dollars to make and revenue of R dollars, the value of x where the expression for C and R are equal is called the break even quantity, the number of units that produce zero...


Set C = R
This means 16X - 20000 = 14X
Add -16X to both sides
-20000 = -2X
Divide both sides by -2
10000 = X

This means that the break even point is 10000 units.

Oct 10, 2010 | SoftMath Algebrator - Algebra Homework...

1 Answer

I must not understand what a margin is so could someone explain, the instructions give this example: If I purchase something for $2000 and want to make a 20% profit I would need to sell it for $2500 (2000...


Hi,
I think you should refer to you definitions. The 20% is called the markup. The profit margin is calculated with respect to the revenue. So you should divide the 400$ by 2400$ to get a net profit margin of 400/2400 =0.1667 or 16.67% (And we are not taking into account the taxes).

Margin = Markup /(price + Markup)
Markup = Margin* (Price +Markup)
Markup = Margin*Markup + Margin* Price
Markup*(1-Margin) =Margin*Price
Markup = Margin*Price/( 1-Margin)
For Price =2000, Margin =0.2 (that is 20%)
Markup = 0.2*2000(1-0.8) =0.2*2000/0.8
Markup = 2000*(0.2/0.8)= 2000*0.25 = 500

Thus to have a (net) profit margin of 20%, an item costing 2000$ must be marked up by 500$.

Try not to reason with numbers. Write the defining relation and use algebra to isolate for the variable you seek.

Hope it helps.
Thank you for using Fixya and for rating this solution.


Nov 30, 2009 | Canon P23-DH Calculator

2 Answers

How do I use the Cost/Sell/Margin function on my Canon P100-DH 2 desktop printing calculator? Please for the love of god help me.


Cost/Sell / Margin can be very confusing it uses the following Account formulas (For Cost = Selling price - ( Selling price / Markup) For Sell = Selling Price =Cost / (1-Margin%))

It is not a pure percentage. Please respond back if you have any other questions.

Apr 22, 2008 | Office Equipment & Supplies

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