The first step, and the key to success is picking out the question. Will profit increase? We need to determine the profit for each of the two choices to find out which is greater. The formula for profit P is given by
where R represents the total revenue, and C represents the total cost.
From here the problem has been broken up into four smaller problems. What is the monthly cost for 8-hour production? What is the monthly revenue for 8-hour production? What is the total monthly cost if production is increased by 3,000 units per month? What is the total monthly revenue if production is increased by 3,000 units per month?