Problema Solution
A company that manufactures small canoes has a fixed cost of $16,000. It costs $20 to produce each canoe. The selling price is $40 per canoe. (In solving this exercise, let x represent the number of canoes produced and sold.) Determine the break even point.
Answer provided by our tutors
The cost for producing x canoes is:
16,000 + 20x
The money made for selling x canoes is:
40x
At the break even point:
16,000 + 20x = 40x
........
click here to see the equation solved for x
........
x = 800 canoes
The break even point is 800 canoes.