Question

Warmawear produce ski-pants at a cost of £12 per pair. The ski-pants sell for £27 per
air.
a) Write down the profit on each pair. Warmawear hope to sell x pairs. This will cover
the overheads of £10000 and produce an overall profit to the company of £20000.
b) Form an equation in and solve it.

Answer 1

a. The profit per pair on each pair of Warmawear ski-pants is £15

b. The required equation required to determine the pair of ski-pants needed to cover overhead cost and  produce a profit of £20,000 is £27x - £10000 -  £12  =  £20000

In order to  cover the overhead cost and  produce a profit of £20,000, the number of ski-pants that would be sold is 2000

Profit is total revenue earned less total cost of production

Profit = total revenue - total cost

Total revenue = total quantity produced -x price per unit sold

Total cost = overhead cost + variable cost

The profit on each pair is the price per pair less cost per pair

£27 - £12 = £15

b. The cost of production (overhead) needed to produce x pair is  £10,000. Profit that will  be earned is  £20,000

The equation to represent this information is:

(£27 × x) -  (£10000 + £12 × x) =  £20000

£27x - £10000 -  £12  =  £20000

Combine like terms

£15x = £20000 + £10000

£15x = £30000

Divide both sides of the equation by 15

x = 2000

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