Which statement is true?
1 answer:
You might be interested in
the overhead, fixed costs, is $1000.
the variable cost is $200, so if she sells "x" tiles, then her costs is 200*x or 200x.
total costs then will just be C(x) = 200x + 1000.
namely both costs added together.
Revenue is just how much it's been taken in from the sales, since each tile is selling for $240, then the revenue is simply 240*x or just R(x) = 240x.
break even point is when those two guys equal each other
what if the cost for each tile were $220, 20 bucks more?
well, if the cost for each tile is $200, her break-even point is at 25 units, namely once she has sold 25 tiles, she's has lost nothing, has won nothing either, but hasn't lost anything.
if the cost is however $220 instead, her break-even point comes much later, at 50 units, so she'll have to sell more tiles in order to not have any losses, so she's worse off if the cost is more or course.