Answer:
Break-even quantity is 20,000 hot dog
and,
to make profit of $30,000 , the number of hot dog sold should be 30,000
Explanation:
Given:
Fixed cost = $60,000
Cost of each hot dog = $3.5
Selling cost = $6.5
Now,
let the quantity at breakeven be 'x'
At breakeven point,
Total cost = Total revenue
Thus,
$60,000 + $3.5x = $6.5x
or
$6.5x - $3.5x = $60,000
or
$3x = $60,000
or
x = 20,000
To earn profit of $30,000
Now,
Profit = Revenue - Cost
Let the quantity for $30,000 profit be 'y'
Thus,
$30,000 = $6.5y - ($60,000 + $3.5y)
or
$30,000 = $6.5y - $3.5y - $60,000
or
$90,000 = $3y
or
y = 30,000
Hence,
Break-even quantity is 20,000 hot dog
and,
to make profit of $30,000 , the number of hot dog sold should be 30,000
