PLEASE HELP WILL GIVE BRAINLIEST!!!!!!!!!!!!!!!!!!!!!

The total cost of production consists of fixed costs (such as overhead) plus variable costs (such as supplies). Revenue is the amount of money that is received due to sales. Suppose that the manager of a small company that produces roof tile has determined that the overhead is $1000 and the variable cost for each unit of tile produced is $200. Each unit of tile sells for $240. Find the total cost in dollars, C(x), of producing x units of tile and the revenue in dollars, R(x), from the sale of x units of tile. The company will break even (no profit and no loss) as long as revenue just equals cost. The value of x (the number of items produced and sold) where C(x) = R(x) is called the break-even point.

Find the break-even point and the cost and revenue at the break-even point. Suppose the variable cost is actually $220 per unit, instead of $200.

How does this affect the break-even point? Is the manager better off in this case or not? Explain. Discuss with your classmates.

Respuesta :

the overhead, fixed costs, is $1000.

the variable cost is $200, so if she sells "x" tiles, then her costs is 200*x or 200x.

total costs then will just be C(x) = 200x + 1000.

namely both costs added together.

Revenue is just how much it's been taken in from the sales, since each tile is selling for $240, then the revenue is simply 240*x or just R(x) = 240x.

break even point is when those two guys equal each other

[tex]\bf \stackrel{R(x)}{240x}=\stackrel{C(x)}{200x+1000}\implies 40x=1000\implies x=\cfrac{1000}{40}\implies x=25[/tex]

what if the cost for each tile were $220, 20 bucks more?

[tex]\bf \stackrel{R(x)}{240x}=\stackrel{C(x)}{220x+1000}\implies 20x=1000\implies x=\cfrac{1000}{20}\implies x=50[/tex]

well, if the cost for each tile is $200, her break-even point is at 25 units, namely once she has sold 25 tiles, she's has lost nothing, has won nothing either, but hasn't lost anything.

if the cost is however $220 instead, her break-even point comes much later, at 50 units, so she'll have to sell more tiles in order to not have any losses, so she's worse off if the cost is more or course.