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 help the manager make a decision.

Answer rating: 100% (QA)

Answer A cost of building x houses x55000 28000 20000 1030... View the full answer