SOLUTION: A company markets exercise DVDs that sell for $14.95, including shipping and handling. The monthly fixed costs (advertising, rent) costs (materials,shipping, etc.) are $8.45 per DV

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Question 1181758: A company markets exercise DVDs that sell for $14.95, including shipping and handling. The monthly fixed costs (advertising, rent) costs (materials,shipping, etc.) are $8.45 per DVD.
Find the cost equation and the revenue equation.
How many DVDs must be sold each month for the company to break even?
Answer by CPhill(1959) About Me  (Show Source):
You can put this solution on YOUR website!
Here's how to solve this problem:
**1. Cost Equation:**
* Let 'x' represent the number of DVDs sold.
* Fixed costs are $8.45 per DVD.
* Cost Equation: C(x) = 8.45x
**2. Revenue Equation:**
* The selling price is $14.95 per DVD.
* Revenue Equation: R(x) = 14.95x
**3. Break-Even Point:**
* The break-even point occurs when the cost equals the revenue: C(x) = R(x)
* 8.45x = 14.95x
* Subtract 8.45x from both sides: 0 = 6.5x
* Divide both sides by 6.5: x = 0
**Important Note:** The calculation shows that the break-even point is 0 DVDs. This indicates an issue with the given information. If the fixed costs are per DVD, then there are no fixed costs. This means that the company would break even with the first DVD sold.
**If the fixed costs were a one-time monthly cost (and not per DVD), the calculation would be different:**
Let's assume there's a fixed monthly cost, F. The cost equation would be:
C(x) = F + 8.45x
And the break-even point would be:
F + 8.45x = 14.95x
F = 6.5x
x = F / 6.5
You'd need to know the actual fixed monthly cost (F) to determine the break-even point in this scenario.