SOLUTION: The Metro Company sells its latest product at a unit price of $5. Variable costs are estimated to be 30% of the total revenue, and fixed costs amount to $7000 per month. How many u
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Question 215133This question is from textbook finite mathematics
: The Metro Company sells its latest product at a unit price of $5. Variable costs are estimated to be 30% of the total revenue, and fixed costs amount to $7000 per month. How many units should the company sell each month in order to break even, assuming that it can sell up to 5000 units per month at the planned price? Just give the numerical answer. Do not include any words or units.
This question is from textbook finite mathematics
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
The Metro Company sells its latest product at a unit price of $5. Variable costs are estimated to be 30% of the total revenue, and fixed costs amount to $7000 per month. How many units should the company sell each month in order to break even, assuming that it can sell up to 5000 units per month at the planned price? Just give the numerical answer. Do not include any words or units.
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Let # of units produced be x<= 5000
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Revenue = 5x dollars
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Cost = 7000 +0.30(5x)
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Equation if cost = revenue
5x = 7000 + 1.5x
3.5x = 7000
x = 2000 (# of units to produce to break even)
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Cheers,
Stan H.
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