Break-Even Analysis You are setting up a part-time business with an NS

Serotoninl7

Serotoninl7

Answered question

2021-11-16

Break-Even Analysis You are setting up a part-time business with an
initial investment of $21,000. The unit cost of the product is $11.50, and the selling price is $19.90.
a) Find equations for the total cost C (in dollars) and total revenue R (in dollars) for x units.
b) Find the break-even point by finding the point of intersection of the cost and revenue equations.
c) How many units would yield a profit of $1000?

Answer & Explanation

navratitehf

navratitehf

Beginner2021-11-17Added 20 answers

Step 1
The given investment in the part time business is $21,000
and the unit cost product is $11.50
selling prize is $19.90
a) The eqn of the total cost c (in doller) for x unit is
C=11.50x+21,000
eqn. of total revenue for x
R=19.90x
b) the intersection pint of cost and revenue eqn
C=R
19.90x=11.50x+21000
8.4x=21000
x=210008.4
therefore we get x=2500
so the break value =19.90(2,500)
=$47,150
Step 2
c) Profit=Revenuecost
so,
P=19.90x(11.50x+21000)
P=8.40x21000
d) No. of unit to be sold t yeild of $1,000 is
1,000=8.40x21,000
x=220008.4
x=2,619.05
Therefore 2,620 units need to be sold to obtain the required profit.

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