Respuesta :
11,000 toothpicks must be sold in order to break even.
Step-by-step explanation:
Here, let us assume the number of toothpicks sold to break even = m
So, for m toothpicks, Total cost = Total Earnings
Now, the cost of producing 1 toothpick = $0.03
So, cost of production of m toothpicks = m x ( cost of 1 toothpick)
= $(0.03 m)
Also, fixed month cost = $110
So, Total cost of production = $110 + $0.03 m .... (1)
Again, the selling cost of 1 toothpick = $0.04
So, selling cost of m toothpicks = m ( cost of 1 toothpick) = $(0.04 m) ..(2)
From (1) and (2)
110 + 0.03 m = (0.04 m)
⇒ 110 = 0.01 m
or, m = [tex]\frac{110}{0.01} = 11,000[/tex]
⇒ m = 11,000
Hence, 11,000 toothpicks must be sold in order to break even.
Answer:
Company must sell 11,000 toothpicks in order to break-even.
Step-by-step explanation:
Given:
Cost to produce each toothpicks = $0.03
Fixed cost = $110
Selling price of each toothpicks = $0.04
We need to find the number of toothpicks company must sell in order to break-even.
Solution:
Let the number of tooth picks sold be 'x'.
Now we can say that;
Total cost of the company is equal to Cost to produce each toothpicks multiplied by number of tooth picks sold plus the Fixed cost
framing in equation form we get;
Total cost of the company = [tex]0.03x+110[/tex]
Now we can say that;
Revenue generated is equal to Selling price of each toothpicks multiplied by number of tooth picks sold.
framing in equation form we get;
Revenue generated = [tex]0.04x[/tex]
Now we know that;
Break even point is the point at which The total cost to the company is equal to revenue generated.
So we can frame it as;
[tex]0.03x+110=0.04x[/tex]
Combining the like terms we get;
[tex]0.04x-0.03x=110\\\\0.01x=110[/tex]
Dividing both side by 0.01 we get;
[tex]\frac{0.01x}{0.01}=\frac{110}{0.01}\\\\x=11,000[/tex]
Hence Company must sell 11,000 toothpicks in order to break-even.
