Problem
A plastic cup manufacturer is considering adding a new plant to keep up with growth in demand. The location being considered will have fixed costs of $15,200 per month and variable costs of $10 per box of 1,000 cups produced. Cups are sold for a price of $15 per box of 1,000.
• What volume of cups (boxes) is required per month to break even?
• What profit would be earned on 6,000 boxes?
• What volume (boxes) is required to obtain a profit of $10,000 per month?
• Plot the total cost and total revenue lines.