Question

A food delivery company charges on average a delivery fee of $5 per order (including food and shipping) and has monthly fixed costs of $600. If the average cost of each meal delivered that is revenue for the company is $10 and the company has a monthly profit of $800, how many orders must they deliver per month?

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Esmeralda

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70 Answers

* Delivery fee per order is $5 (including food and shipping)
* Fixed costs per month are $600
* Average cost of each meal (revenue per order) is $10
* Monthly profit is $800
* Let x = number of orders per month
* Revenue = x * $10
* Costs = x * $5 (delivery fees) + $600 (fixed costs)
* Profit = Revenue - Costs
* $800 = x * $10 - (x * $5 + $600)
* $800 = x * $10 - x * $5 - $600
* $800 = 5x - 600
* $1400 = 5x
* x = 280
Therefore, the number of orders per month must be 280.

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