4. Break-Even Analysis
1 answer:
Answer:
x = 1178 games
Step-by-step explanation:
Let the number of games = x
Let the total cost = Tc
Let the total revenue = Tr
Given the following data;
Investment = $10,000
Cost of each game = $1.50
Selling cost = $9.99
Total cost, Tc = (Cost of each game * Number of games) + Investment
Tc = 1.50x + 10000
Total revenue, Tr = Selling cost * Number of games
Tr = 9.99x
Breakeven point is when total cost is equal to total revenue;
Tc = Tr
x = 1177.86 ≈ 1178 games.
<em>Therefore, the number of games that must be sold before the business breaks even is 1178 games. </em>
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