SOLUTION: Assume that a company has total annual fixed costs of $480,000 and that variable costs is $6 per unit. If each unit sells for $10, then each unit exceeds the specific variable cos

Question 480496: Assume that a company has total annual fixed costs of $480,000 and that variable costs is $6 per unit. If each unit sells for $10, then each unit exceeds the specific variable costs by $4.
a. What is the cost function?
b. What is the revenue function?
c. How many units must be sold in order for the company to break-even?

Answer by nerdybill(7384) (Show Source): You can put this solution on YOUR website!
Assume that a company has total annual fixed costs of $480,000 and that variable costs is $6 per unit. If each unit sells for $10, then each unit exceeds the specific variable costs by $4.
a. What is the cost function?
C(x) = 6x + 480000
b. What is the revenue function?
R(x) = 10x
c. How many units must be sold in order for the company to break-even?
set
R(x) = C(x)
10x = 6x + 480000
4x = 480000
x = 120,000 units

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