Question

A company manufactures its product at a cost of $0.50 per item and sells it for $0.85 per item daily overhead is $600 how many items must be manufactured each day in order for the company to break even

Answer 1

1,715

Explanation:

So, we have a product that is sold for $0.85 and costs $0.50 to produce, and we need to find the number is items needed to cover the $600 fixed costs of the company.

We can model this like that, where x is the number of items to make:

0.85x - 0.5x = 600

0.35x = 600

x = 1,714.29

So, to cover the fixed overhead/fixed expenses, they need to make at least 1,715 items, each day.