2. Durham Hi Tech Company determines that to manufacture cell phones it costs $5

Question

2. Durham Hi Tech Company determines that to manufacture cell phones it costs $55,000 to set up the production process. It costs $18 to produce each cell phone. The company sells each cell phone to its retail stores for $21 each.

a. Set up a formula for the cost to manufacture cell phones.
b. Set up a formula for the revenue received by company when it sells the cell phones to its retail stores.
c. Set up th profit formula for company. (profit = revenue - cost)
d. How many cell phones must company sell to break even?

3. You and your family are going on a trip. Your dad wants to rent a car for one week (7days). Budget Car Rental charges $59.99 each day and $0.17 per mile. Avis charges 79.99 each day with unlimited mileage. YOur family will drive about between 700 and 1000 miles for the week.

a. Write a formula for the cost of the Budget car in terms of the nubmer of miles driven.
b. Write a formula for the cost of the Avis Car.
c. Which rental is cheaper if your family drives 700 miles? 1000 miles?
d. Make a statement as to when one or the other car company is the better investment and why.

Explanation / Answer

2 a) cost(phones)= 55,000+18*(phones made) b) revenue= 21*(phones made) c) 21(x)-(55,000+18(x) d) Set cost of telephones equal to revenues from telephones.
21x=55,000 +18x divide both sides by 3 to get 18,333 phones. 3 a) Cost of Budget = (cost per day X number of days)+ cost per mile X number of miles          59.99 X 7 days = 419.93 +
b) Cost of avis= cost per day X number of days =79.99*7= $559.93
C) 700 miles
Avis= $ 559.93 Budget=(59.99 X 7) + (0.19 X 700)= $552.93 Budget is cheaper
1000 miles Avis= $559.93 Budget= (59.99 X 7) + (0.19 X 1000)= $609.93 Avis is cheaper d) it simply depends on how many miles you go, if you travel a lot of miles, Avis is cheaper. If you travel less miles, then Budget is cheaper. If you need clarification, just message me.

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