Question

Graphic Wear Inc. designs and sells a variety of t-shirts for $19.75 each, and their revenue equation is =19.75, where q is the number of t-shirts sold. They have an expense equation of =11.25+83,300. How many t-shirts do they have to sell in order to breakeven? *

Answer 1

9,800 t-shirts

Explanation:

The BEP which is the break even point is the point where the company's sales or revenue generated is equal to the cost incurred. As such, the BEP is the number of units that must be sold for the company to make neither a profit nor a loss.

As such equating the revenue function to the cost function will help find the number of shirts that must be sold for the company to break even

19.75q = 11.25q + 83,300

collect like terms

19.75q - 11.25q = 83,300

8.5q = 83,300

Divide both sides by 8.5

q = 9,800 units