A college baseball team raises money by sellling baseball caps. The cost of making the caps includes a fixed?
A college baseball team raises money by sellling baseball caps. The cost of making the caps includes a fixed cost of $500, plus $7 per cap. The caps sell for $15 each. What is the minumum number of caps the team can order in one batch and still raise money?
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Number of caps produced: x
Fixed cost: 500
Variable cost: 7x
Total expense: 500 + 7x
Income: 15x
For the team to raise money, income > expense:
15x > 500 + 7x
8x > 500
x > 62.5
The minimum number of caps the team can order and still raise money is 63 (the smallest integer greater than 62.5).
They will have to sell 64 to make $12 profit. but this cannot be considered raising money.
They should order at least 200 caps, Donate 6 caps to the cutest girls for advertisement and make about $1000.
Only problem may be that after spending all the energy they may loose the game.