Ponderosa development corporation (pdc) is a small real estate developer that builds only one style of house. the selling price of the house is $115,000. land for each house costs $55,000 and lumber, supplies and other materials run another $28,000 per house. total labor costs are approximately $20,000 per house.
ponderosa leases office space for $2000 per month. the cost of office supplies, utilities and leased equipment runs another $3000 per month. the one sales person of pdc is paid a commission of $2000 on the sale of each house.
pdc has a seven permanent employees whose monthly salaries is given below
monthly salaries
president $10,000
vp, development $6000
vp, marketing $4500
project manager $5500
controller $4000
office manager $3000
receptionist $2000
part a: write an expression for the cost of building x houses.
part b: write an expression for the revenue when selling x houses
part c: write an expression for the profit when selling x houses. simplify your expression to the form p(x)=ax-b
part d: what is the profit per house?
part e: what is the breakeven point for monthly sales of houses? include just the numeric value.
part f: what is the profit ($) if 12 houses are sold?
part g: for the breakeven point, what is the unit?
part h: pdc receives a bid to build 20 units in a new development. identify the correct response to the manager make a decision.