A Greeting Card Company Can Sell Cards for $2

question 107

Essay

A greeting card company can sell cards for $2.75 each, so the revenue can be calculated using the formula R = 2.75x. The company's total cost consists of a fixed overhead of $12,000 plus 35 cents per card, so the total cost can be calculated using the formula C = 0.35x + 1200.
a. Write the algebraic equation needed to determine when the company will break even (when the revenue will equal the cost).
b. Solve the equation from part a.
c. Write the algebraic inequality needed to indicate that the revenue is greater than the cost.
d. Solve the inequality from part c.
e. What does your answer from part d tell you about when the company will make a profit?

---

Definitions:

Company Car

A vehicle provided by a company for the business and sometimes personal use of its employees.

Units-of-Activity Method

A depreciation method that calculates an asset's expense based on its usage, activities, or units of production, rather than the passage of time.

Depreciation

The process of allocating the cost of a tangible asset over its useful life, reflecting wear and tear or obsolescence.

Estimated Residual Value

The anticipated value of an asset at the end of its useful life.