Question

Mr. Brown is starting a company that manufactures herbal oil. He decides to produce 200 bottles during the first month. The fixed cost per month is $3,680, and the variable cost for 200 bottles is $962. If Mr. Brown wants to break even in the first month, he should sell each bottle of oil for $

Answer 1

The total cost is the sum of the fixed cost and variable cost. In the first month, that would be $4,642.00. Since breaking even is when the profits equal to the costs, Mr. Brown must have $9,284.00 at the end of the month. This amount is divided by 200 to get the price for each bottle that is to be sold.
Mr. Brown must sell each bottle for $46.42 to break even in the first month.