Question

A manufacturer sells his product at $23 per unit, selling all he produces. His fixed cost is $18,000 and his variable cost per unit is $18.50. The level of production at which the manufacturer breaks even is

Answer 1

Answer:

4000 Units

Explanation:

x = number of units made and sold

C(x) = cost

C(x) = 18.50x+18000

R(x) = revenue

R(x) = 23x

Breakeven point occurs when the cost and revenue are the same, which produces a profit of 0 dollars.

R(x) = C(x)

23x = 18.50x+18000

23x-18.50x = 18000

4.50x = 18000

x = 18000/(4.50)

x = 4000