SOLUTION: The Pearl Company plans to market a new product. Based on its market studies, Pearl estimates that it can sell 5500 units in 2017.The selling price will be $2 per unit. Variable

Algebra ->  sets and operations -> SOLUTION: The Pearl Company plans to market a new product. Based on its market studies, Pearl estimates that it can sell 5500 units in 2017.The selling price will be $2 per unit. Variable       Log On


   

Question 1037311: The Pearl Company plans to market a new product. Based on its market studies, Pearl estimates that it can sell 5500 units in 2017.The selling price will be $2 per unit. Variable costs are estimated to be 40% of the selling price. Fixed costs are estimated to be $6000.What is the break‐even point?

Answer by jorel555(1290) About Me  (Show Source):
You can put this solution on YOUR website!
Fixed costs are $6000, and variable costs are 40% of $2, which is $.80 apiece. Let n be one unit. Then:
6000+.8n=2n
1.2n=6000
n=6000/1.2=5000 units is your break-even point!!!!!!!!!!!!!!