Product Cost Analysis

Addison Lederer
Table of Contents:
3.Variable Cost Analysis
4.Fixed Cost Analysis
5.Revenue Cost Analysis
6.What if Cost Analysis
7.Equation Analysis
8.Solving the System
9.Graphing the System
10.Summary
Variable Cost Analysis:
Variable Cost: The variable cost is the amount of money it takes to make the product.This
includes all materials used to make the product.

Paper 11 cents

Ink 7 cents

Plastic Cover 50 cents a piece

Spiral 4 cents

Total Cost: $1.75

I came up with these costs by analyzing my product and making sure I covered everything it
costs to make the book. I collected my numbers through my teacher who helped me print the
book and I put them together and calculated the amount of money it will take me to print one
copy of my book.
Fixed Cost Analysis:
Fixed Cost: The fixed cost is the amount of money that you spend marketing and manufacturing
your product.

Manufacturing: $200

Marketing: $1/book

Sources Used:

Skidelsky, William. "The True Price of Publishing." The Guardian. Guardian News and Media,

04 Aug. 2011. Web. 10 May 2017.

Revenue Cost Analysis:

Revenue: Income produced from selling the product.

Revenue: $7.00
What If Cost Analysis:
What If Cost Analysis: I had to come up with various costs and solve them by using the
equation to help us determine our graphing equations and the best possible outcomes I could
have.

Sales
If If Volume
Variable
Fixed Cost Cost 10 20 30 40
Is Is Then Profitability Will Be Equation

$100 $1.50 -$45.00 $10.00 $65.00 $120 y=7x

$100 $1.75 -$47.50 $5.00 $57.50 $110 y=200+1.50x
$100 $2.00 -$30.00 $0.00 $50.00 $100
$200 $1.50 -$145.00 -$90.00 -$35.00 $20.00
$200 $1.75 -$147.50 -$95.00 -$42.50 $10.00
$200 $2.00 -$150.00 -$100.00 -$50.00 $0.00
$300 $1.50 -$245.00 -$190 -$135.00 -$80.00
$300 $1.75 -$247.50 -$195 -$142.50 -$90
$300 $2.00 -$250.00 -$200.00 -$150.00 -$100
Equation Analysis:

Revenue Equation 1:y=7x

Cost Equation 2:y=200+1.50x

I came up with my two equations for finding the break even point by looking at my revenue and
plugging it into equation one so y equals 7x. I came up with equation two by looking at my
what if table and finding the lowest cost, this cost happened to fall under $200 and $1.50
which had the lowest probability of $20.00. I then used this information and plugged it into my
two equations.

Solving the equation:

Graphing the System:

Summary:
My break-even point occurs when Ive made 36 products and made $254 off of revenue.
The break-even point is when so I will start making a profit off of my children's book after I sell
37 products. Based on my projections, and the equation profit=revenue-costs (both variable and
fixed),I plan to make $198.50 as my yearly profit.