Question

A factory has fixed costs of $1,275 per month. The cost of producing each unit of its product is $2.50. Each unit sells for $10.

The equations that model the cost and revenue for producing x units are shown.
Cost: C(x) = 1275 + 2.5x
Revenue: R(x) = 10x

Answer 1

If the company sells every unit it produces, how many units must it sell in order to break even? 170 units

Answer 2

A factory has fixed costs of $1,275 per month. The cost of producing each unit of its product is $2.50. Each unit sells for $10.

Cost: C(x) = 1275 + 2.5x

Revenue: R(x) = 10x

The break even for the company can be solve by equating the cost and revenue

1275 + 2.5x = 10x

Solving for x = 170, they have their breakeven point when they sell 170 units.