Answer :
To break even, 29 units must always be sold. The cost will be $850 per unit, or $24,650.
Define the term break even point?
- The break-even threshold is reached when overall costs and total revenues are equal, leaving your small firm with no net benefit or loss.
- In many other words, you've achieved the point in production where the revenue from a product equals the cost of manufacture.
For the given question-
Total cost c: c = 850x + 250000
Total revenue R: R = 9502x
The point during which costs equal revenues is known as the break-even point.
850x + 250000 = 9502x
9502x - 850x = 250000
8652x = 250000
x = 28.29
x = 29
Thus, to break even, 29 units must always be sold. The cost will be $850 per unit, or $24,650.
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