Question 1053356: A division of a corporation manufactures bicycle pumps. Each pump sells for $9, and the variable cost of producing each unit is 40% of the selling price. The monthly fixed costs incurred by the division are $50,000. What is the break-even point for the division?
a) break-even production 1,852 units; break-even revenue $166,662
b) break-even production 1,852 units; break- even revenue $83,331
c) break-even production 9,259 units; break- even revenue $166,662
d) break-even production 9,259 units; break- even revenue $83,331
Thank you for your help.
Answer by jorel555(1290)   (Show Source):
You can put this solution on YOUR website! If each pump sells for $9, and 40% is the variable cost, then 60% of 9 (5.40) is your profit margin. Let n be the number of units produced. Then:
5.4n=50000
n=9259.259
Break-even revenue is 9259.259 x 9=$83333.33333. ☺☺☺☺
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