Question

A manufacturing company has the following fixed monthly costs and unit variable costs: Rent = $2,200 Utilities = $375 Variable costs for materials and assembly = $13.25/unit Monthly labor = $750 If its product sells for $24.99 per unit, how many units must it sell in a month to break even? Round your answer to the nearest whole number.

Answer 1

A manufacturing company has the following fixed monthly costs and unit variable costs:

Rent = $2,200

Utilities = $375

Variable costs for materials and assembly = $13.25/unit

Monthly labor = $750

Given is the product is sold at $24.99 per unit

Let the number of units sold be x

Adding total cost = $2200+375+750=3325$

Equation becomes:

$3325+13.25x=24.99x$

$11.74x=3325$

x= 283.21

So, rounding it to nearest whole number we get, 283 units.