Question

The department estimates that $6,000 of new manufacturing equipment will need to be purchased and that the cost of construction each desk will be $100. The department also estimates that the revenue from the desk will be $400

Answer 1

Answer:

The question is incomplete, below is a possible match for the complete question:

The department estimates that $6,000 of new manufacturing equipment will need to be purchased and that the cost of construction each desk will be $100. The department also estimates that the revenue from the desk will be $400. Find the company's break-even point for this desk

Answer: Break-even point (number of desks) = 20 desks

Step-by-step explanation:

The break-even point is the price of quantity of goods sold at which the total manufacturing costs equals the selling price.

Let the number of desks to be sold in order to break even = $x$

manufacturing equipment cost = $6,000

total cost of manufacturing desks at $100 each = 100 × $x$ = 100$x$

Therefore total cost of manufacturing = 6000 + 100$x$

Total revenue to be realized at a selling price of $400 each = 400×$x$ = 400$x$

To break even:

Total manufacturing cost = Total revenue

∴ 6000 + 100$x$ = 400$x$

6000 = 400$x$ - 100$x$

6000 = 300$x$

300$x$ = 6000

∴ $x$ = 6000 ÷ 300 = 20

Therefore, in order to break even, 20 desks must be sold. which is a total revenue of $8000 (400 × 20).