Question

Northwest molded mold plastic handles which cost 0.20 per handle to mold. The fixed cost to run the molding machine is $ 7396 per week. If the company sells the handles for $4.20 each, how many handles must be molded and sold weekly to break even?

Answer 1

Answer:

1849 handles

Step-by-step explanation:

Break Even is the point when costs = profit

Since each handle takes $0.20 to make (cost) and they sell it for ($4.20), the profit from each handle is:

Profit = 4.20 - 0.20 = $4

The weekly costs are $7396. Break even would mean to gain this amount from selling handles (profit).

So, from each handle, we get $4 and to make $7396, we would need:

7396/4 = 1849 handles