Solve the problem.
-A firm is considering a new product. The accounting department estimates that the total cost, C(x), of producing x units will be C(x) = 95x + 3720. The sales department estimates that the revenue, R(x), from selling x units will be R(x) = 105x, but that no more than 987 units can be sold at that price. Find and interpret (R -C)(987).
A) -$6150 loss, cost exceeds income
B) $6150 profit, income exceeds cost It is not worth it to develop product. It is worth it to develop product.
C) $201,120 profit, income exceeds cost
D) $1359 profit, income exceeds cost It is worth it to develop product. It is worth it to develop product.

Question

Quizplus · Accepted Answer

(R - C)(987) = R(987) - C(987) = 105(987) - (95(987) + 3720) = 103635 - 97485 = 6150. This represents a profit of $6150, as income exceeds cost.

Solve the Problem. -A Firm Is Considering a New Product. the Accounting Department