Tom is selling knockoff handbags to make a profit. His supplier charges him $200 to ship plus $10 per bag. He intends to sell them for $80 per bag. What is the minimum number of bags he must sell on the bus ramp to make a profit?

Question

Mathematics

Pierce

3 April, 11:24

Tom is selling knockoff handbags to make a profit. His supplier charges him $200 to ship plus $10 per bag. He intends to sell them for $80 per bag. What is the minimum number of bags he must sell on the bus ramp to make a profit?

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Answers (1)

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Martha Oliver · Answer 1

The general formula for profit is:

Profit = Revenue - Total Cost

The revenue refers to the gross profit or sales of the selling the products. This is equal to the number of units times the cost per unit. The total cost includes the variable and fixed cost. In this problem, the total cost accounts for the charges made by the supplier. Let x be the number of handbags.

Profit = 80x - (10x + 200)

Profit = 80x - 10x - 200

Profit = 70x - 200

Let profit be zero.

0 = 70x - 200

Solving for x,

x = 2.86 units ~ 3 units

Therefore, he needs to sell at least 3 knockoff handbags to earn profit.