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Cost Equation and Revenue Equation

Help me find cost equation and revenue equation.

The PTO of Parksville Elementary School is having a Bazaar and all of the classes are expected to contribute to this fun and exciting event. The third grade teachers, along with some dedicated parents, decide to sell cotton candy.

A little research shows you can get the machine for $50 and cleaning supplies will cost $10. The sugar and cones come in a package for $10, enough to serve 100 (you can get a refund for unopened packages). The committee thinks they could probably sell 150 of these sticky globs of goodness, so they order two packages of sugar and cones.

One of the parents asks: If we sell the cotton candy for $1.50 each, how many servings must be sold to break even? How much needs to be sold so we can buy a $320 computer package for our science lab? You have volunteered to create the equations and graph the cost analysis chart so you will be able to answer that question as well as these:

a. What are the Cost equations?
b. What is the Revenue equation?


Solution Preview

The costs include:

machine: $50
cleaning supplies: $10
ingredients: $10 per 100 cones (2 were ordered for a total of $20)

The total costs are:

Cost = $50 + $10 + $20 = $80

To make a profit, you need to make more than $80.

The revenue is $1.50 per ...