Question 1122112
revenue is equal to 1000 * 12.
cost is equal to 2000 + 1000 * 8.


not exactly sure what you're looking for.


based on the  numbers you provided, they are making a profit.


revenue - cost = profit.


1000 * 12 - 1000 * 8 - 2000 = 1000 * (12-8) - 2000 = 1000 * 4 - 2000 = 4000 - 2000 = 2000.


if you are looking for the number of liters they can produce to break even, given that the price is 12 and the cost is 8, then the formula would be:


12 * x = 2000 + 8 * x, where x is the number of liters to produce.


subtract 8 * x from both sides of this equation to get 12 * x - 8 * x = 2000.


solve for x to get 4 * x = 1000 which leads to x = 500.


at the price of 12 and the cost of 8, they will break even if they make and sell 500 liters of wine.


revenue would be 500 * 12 = 6000
cost would be 2000 + 500 * 8 = 2000 + 4000 = 6000


here's a reference i found on the web about break even point analysis.


<a href = "https://accountingexplained.com/managerial/cvp-analysis/break-even-point-equation-method" target = "_blank">https://accountingexplained.com/managerial/cvp-analysis/break-even-point-equation-method</a>


the formula is px = px + fc + profit


the break even point is when the profit is 0.


the formula then becomes px = vx + fc


p is the selling price per unit.
v is the variable cost per unit
x is the number of units
fc is the fixed cost


it's clear that, when they sell 1000 liters at 12 a liter and the cost is 8 a liter and the fixed cost is 2000, that they make a profit.


if you want to know what price they can sell the wine at in order to break even, then that's a different type of problem.


given that they sell 1000 liters a week, you can find the  break even price by using the following formula.


1000 * x = 2000 + 1000 * 8


divide both sides of this equation by 1000 to get:


x = 2 + 8 which makes x = 10.


they could sell the wine at 10 each and break even.


1000 * 10 = 10,000
2000 + 1000 * 8 = 10,000.


so, .........


at the price of 12 each and the cost of 8 each plus 2000, they can break even if they sell 500 liters a week.


if they sell 1000 liters a week, they can break even if the price of each is 10 and the cost of each is 8 plus a fixed cost of 2000.