A manufacturing business has total fixed costs of $200,000. It sells its product for $900 but it costs $600 to manufacture each

Question

Aloiza [94]

2 years ago

15

A manufacturing business has total fixed costs of $200,000. It sells its product for $900 but it costs $600 to manufacture each

unit. How many units must the company sell to break even?

Mathematics

1 answer:

solmaris [256] · Answer 1 · 2022-06-27T21:01:55+03:00

If x is the number of units, 600x dollars is the cost of manufacturing all the units, and 900x dollars is the revenue of the sales.
Break even is when the cost=revenue.
200000+600x=900x. 300x=200000, x=200000/300=2000/3=667 approx. There is a small profit of $100 but 666 units actually incurs a loss of $200. The break-even seems to be 667 units.