SOLUTION: A manufacturer of 24-hr variable timers, has a monthly fixed cost of $56,000 and a production cost of $9 for each timer manufactured. The units sell for $16 each. Find the break-ev

Question 1053901: A manufacturer of 24-hr variable timers, has a monthly fixed cost of $56,000 and a production cost of $9 for each timer manufactured. The units sell for $16 each. Find the break-even point algebraically.

a. break-even production 16,000 units; break-even revenue $1,280,000
b. break-even production 8,000 units; break-even revenue $1,280,000
c. break-even production 8,000 units; break-even revenue $128,000
d. break-even production 16,000 units; break-even revenue $128,000
Please Explain this problem. Thank you!
Answer by jorel555(1290) (Show Source): You can put this solution on YOUR website!
If the units sell for $16, and cost $9 to produce; then the profit on each unit is $7. Let n be the number of units needed to break even. Then:
7n=56000
n=8000 or
(16-9)n-56000=0
So, the break-even point is 8000 units; and the break-even revenue is $128000. ☺☺☺☺
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