Question

A firm producing poultry feeds finds that the total cost C(x) in dollars of producing and selling x units is given by

C(x) - 20x+100. Management plans to charge $24 per unit for the feed. How many units must be sold for the firm to break even?

Answer 1

Break-even point in units= 25

Explanation:

Giving the following information:

Fixed cost= $100

Unitary variable cost= $20

Selling price per unit= $24

To calculate the break-even point in units, we need to use the following formula:

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 100 / (24 - 20)

Break-even point in units= 25