Question

A mail carrier at the U.S. Postal Service works on Sunday delivering​ high-priority letters and packages. She can deliver 14 items per hour. The fixed hourly costs​ (vehicle depreciation,​ insurance, etc.) equal ​$47 and the hourly variable costs​ (time and a half​ wages, etc.) total ​$0.90 per item delivered. How much must the U.S. Postal Service charge for each item delivered in order to break even on Sunday​ deliveries?

Answer 1

Answer:

$4.257

Step-by-step explanation:

Given:

Items delivered per hour = 14

Fixed hourly costs​ = ​$47

variable cost = $0.90

Now,

at breakeven point, the profit = 0

or

Total revenue = total cost

let the charge at breakeven point be 'x'

thus,

x × 14 = $47 +  ($0.90 × 14)

or

x × 14 = $47 + $12.6

14x = $59.6

or

x = $4.257

Hence, the breakeven charges are $4.257