Question

A business breaks even when the production costs are equal to the revenue. The expression 120+4x represents the cost of producing x items. The selling price is $5 for each item. Write an expression for the revenue generated by selling x items. How many items would you need to sell to break even? Write an equation and solve it.

Answer 1

Answer:

Results are below.

Step-by-step explanation:

Giving the following information:

The expression 120+4x represents the cost of producing x items. The selling price is $5 for each item.

The net income formula:

y= (5 - 4)x - 120

(5-4)= contribution margin per unit sold (x)

120= fixed costs

To calculate the break-even point in units, we need to use the following formula:

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 120 / 1

Break-even point in units= 120 units

Prove:

y= 1*120 - 120

y= 0