Question

A clothing store spends $10 for each shirt it produces and has fixed costs of $400. If the store makes 50 shirts, how much should the store charge for each shirt In order to break even? A) $10 b)$18 c) $40 d) $50

Answer 1

Answer:

b)$18

Step-by-step explanation:

The break even point is when the revenue is equal to the cost.

Revenue:

How much the store earns for each shirt.

We want to find the price of each shirt, and 50 shirts will be made.

So the revenue function is:

$R = 50p$

In which p is the price.

Costs:

A clothing store spends $10 for each shirt it produces and has fixed costs of $400.

So for 50 shirts:

400 + 50*10 = 900

Breakeven

Revenue equals cost

50p = 900

p = 900/50

p = 18

So the correct answer is:

b)$18