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stiv31 [10]
3 years ago
8

A company that produces custom bike license plates spends $5525 per month in building overhead plus $2.50 per license plate. if

the plates sell for $5.99, how many plates must the company sell each month before making profit?
Business
1 answer:
vivado [14]3 years ago
8 0

<u>Calculation of Breakeven Point:</u>

The breakeven point (units) can be calculated using the following formula:

Breakeven Point (Units) = Total Fixed cost/ (Selling Price- Variable Cost)

It is given that the company produces custom bike license plates and spends $5525 per month in building overhead plus $2.50 per license plate. The plates sell for $5.99 each.

Hence,

Breakeven Point (Units) = 5525 / (5.99-2.50) = 1583.09

Hence we can say that the company must sell <u>1583 plates</u> each month before making the profit.



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