Given:
Candy bars are sold in a local store for 60 cents each. The factory has $1000 in fixed costs plus 10 cents of additional expense for each candy bar made.
To Find:
The break-even point.
Answer:
2000 candy bars have to be sold to break even.
Step-by-step explanation:
Let the break-even point be x candy bars. That is, the manufacturing cost to make x candy bars equals the money made by selling x candy bars (we see there is no profit, no loss. Simply, the cost price equals selling price).
The factory has to spend $1000 in fixed costs plus 10 cents for each candy bar as an additional expense.
As each dollar equals 100 cents, $1000 = 100000 cents, which is the fixed cost.
Also, for making x candy bars, the additional expense for the factory would be equal to 10x.
So, the total cost in manufacturing x candy bars would be 100000 + 10x
Now, each candy bar is sold for 60 cents each. So the total selling price would be 60x.
As we have assumed x to be the break-even point, the cost of manufacturing will equal the selling price.
So,
Thus, 2000 candy bars have to be sold to break even.
