Solve the Problem $$p = - \frac { 1 } { 4 } x + 120 , \quad 0 \leq x \leq 480$$

question 282

Multiple Choice

Solve the problem.
-The price p and the quantity x sold of a certain product obey the demand equation $$p = - \frac { 1 } { 4 } x + 120 , \quad 0 \leq x \leq 480$$ What price should the company charge to maximize revenue?

• A) $72
• B) $90
• C) $60
• D) $30

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Definitions:

Variable Costing

A costing method that includes only variable costs—direct materials, direct labor, and variable manufacturing overhead—in the cost of a product.

Fixed Manufacturing Overhead

Costs that do not vary with the level of production or sales, such as rent, salaries of permanent staff, and equipment depreciation.

Product Cost

The total cost associated with producing goods, including raw materials, labor, and overhead costs.

Variable Costing

A costing method that includes only variable manufacturing costs—direct materials, direct labor, and variable manufacturing overhead—in unit product costs.