Question 1101728
their initial investment is 3450.
this is a fixed cost.
their unit cost for selling the product is 3.25 * the number of products made.
their unit revenue for selling the product is 7.00 * the number of products sold.


the cost equation is:


cost = 3450 + 3.25 * x


the revenue equation is:


revenue = 7.00 * x


x represent the number of units made and sold.


they will start making a profit when the revenue exceeds the cost.


that's when 7.00 * x > 3450 + 3.25 * x


subtract 3.25 * x from both sides of this equation to get:


7.00 * x - 3.25 * x > 3450


simplify to get 3.75 * x > 3450


solve for x to get x > 3450 / 3.75.


this results in x > 920.


they will need to sell more than 920 units in order to start making a profit based on these revenue and cost equations.


when x = 920:


7.00 * x = 6440 and 3450 + 3.25 * x = 6440.


that's your break even point.


each unit sold above that will give a profit of 3.75 per unit.


for example:


921 units sold yields revenue of 6447 and cost of 6443.25.
profit is equal to 3.75.


your solution is:


revenue = 7.00 * x
cost = 3450 + 3.25 * x