To calculate the maximum total profit, we need to determine the number of cakes that can be made with the available money for cake production and the selling price of each cake.
Since each cake costs $14 to make and you have an additional $300 from your parents, the total money available for cake production is: $300
To determine the number of cakes that can be made, divide the available money by the cost to make each cake:
300 / 14 = 21.428
Since you cannot make a fraction of a cake, you can make a maximum of 21 cakes.
Selling each cake for $50, the total revenue from selling all 21 cakes would be:
21 * $50 = $1050
Subtracting the cost of making the cakes ($14 per cake) from the total revenue gives us the maximum total profit:
$1050 - (21 * $14) = $315
Therefore, the maximum total profit, if you only spend 200 hours making the cakes, is $315.
Your parents heard about the success of your business and they want to help you out. Suppose they want to give you an additional $300 to put toward your business. However, there's a catch. If you make more than $600 additional profit, you have to give them 10% of your earnings above $600. For example, if you have earned $650, then you owe 10% of $50, or $5, to your parents.
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Remember it costs $14 to make the cakes and you are selling them for $50 each. If you only spend the 200 hours making the cakes, what was your maximum total profit?
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1 answer