The general formula for profit is:
Profit = Revenue - Total Cost
The revenue refers to the gross profit or sales of the selling the products. This is equal to the number of units times the cost per unit. The total cost includes the variable and fixed cost. In this problem, the total cost accounts for the charges made by the supplier. Let x be the number of handbags.
Profit = 80x - (10x + 200)
Profit = 80x - 10x - 200
Profit = 70x -200
Let profit be zero.
0 = 70x - 200
Solving for x,
x = 2.86 units ~ 3 units
Therefore, he needs to sell at least 3 knockoff handbags to earn profit.
