A bicycle company has been working on developing an ultralight racing bicycle fo

Question

A bicycle company has been working on developing an ultralight racing bicycle for several months. The total development costs will be approximately $125,000. Each unit will cost $65 for material and labor. The company has decided to sell each bicycle for $175. (Answer the questions below using values that would be input or output for the algebraic model.) What is the initial cost of production? What is the initial income? How much will the cost be and how much income would be obtained if fice hundred bicycles are produced? How many bicycles must the company make and sell to break even? (The cost of production equals the income obtained.) Tow write the expressions, define a variable for the number of bicycles produced and use this variable to write rules for the cost of production and the income and use this variable to write rules for the cost of production and the uncle obtained from the bicycles. Assume that all the bicycles produced are sold.

Explanation / Answer

Ans(1):

Initial cost of production = 125000+65x

Initial income= 75x

where x is number of bicycles.

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Ans(2):

given that x=500 so

Initial cost of production = 125000+65x= 125000+65*500=$157500

Initial income= 75x= 75*500= $37500

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Ans(3):

given that income=600000 then

Initial income= 75x=600000

x=600000/75=8000 cycles

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Ans(4):

break even means cost = income so we get:

125000+65x=75x

125000=10x

12500=x

Hence 12500 bicycles are needed.

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