Question 995736: Evergreen Fertilizer Company produces fertilizer. The company’s fixed monthly cost is $25,000, and its variable cost per pound of fertilizer is $0.20. Evergreen sells the fertilizer for $0.45 per pound. Determine the monthly break-even volume for the company
Answer by ankor@dixie-net.com(22740)   (Show Source):
You can put this solution on YOUR website! The company’s fixed monthly cost is $25,000, and its variable cost per pound of fertilizer is $0.20.
Evergreen sells the fertilizer for $0.45 per pound.
Determine the monthly break-even volume for the company
:
let x = quantity sold
Break even occurs when revenue = cost
.45x = .20x + 25000
.45x - .20x = 25000
.25x = 25000
x = 25000/.25
x = 100,000 lbs sold for them to break even
:
:
Check this
find the cost for this amt
.20(100000) + 25000 = $45,000
Find the revenue
.45(100000) = $45,000
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