Answer:
Fixed Monthly Cost: The company incurs a fixed monthly cost of $27,000. This cost remains constant regardless of the number of bikes produced.
Additional Production Cost per Bike: For each bike produced, there is an additional cost of $60.
Now, let’s define the cost function, denoted as (C(x)), where (x) represents the number of bikes produced. The total cost (C(x)) can be expressed as the sum of the fixed monthly cost and the variable production cost:
[ C(x) = \text{{Fixed Monthly Cost}} + (\text{{Additional Cost per Bike}}) \cdot x ]
Substituting the given values: [ C(x) = 27000 + 60x ]
Therefore, the cost function for the bike company is: [ C(x) = 27000 + 60x ]
This function represents the total cost incurred by the company as a function of the number of bikes produced. As the company manufactures more bikes, the total cost increases linearly with the production quantity.
