Question

Cunningham, inc. sells mp3 players for $60 each. variable costs are $40 per unit, and fixed costs total $120,000. what sales are needed by cunningham to break even?

Answer 1

An equation is:
120,000 + 40 x = 60 x,
where: x stays for the number of mp3 players sold;
60 x - 40 x = 120,000
20 x = 120,000
x = 120,000 : 20
x = 6,000
6,000 * $60 = $360,000
Answer: Cunningham will need to sale 6,000 mp3 players for $360,000.