Question

A furniture manufacturer must pay $16.91 to make a certain kind of chair, which it can sell for $55.75. If the manufacturer has starting overhead costs of $18,340, not including production costs, how many chairs must it sell to realize a profit of $24,850, to the nearest chair?
a.
1,112
b.
918
c.
775
d.
640


Please select the best answer from the choices provided

A
B
C
D
Mark this and return

Answer 1

Profit per chair = 55.75 − 16.91 = 38.84.
Required chairs = (fixed cost + desired profit) / profit per chair = (18,340 + 24,850) / 38.84 = 43,190 / 38.84 ≈ 1,112.

Answer: A (1,112).