Problema Solution
A musician is planning to market a CD. The fixed costs are $1400 and the variable costs are $4 per CD. The wholesale price of the CD will be $11. For the artist to make a profit, revenues must be greater than costs.
How many CDs, x, must be sold for the musician to break even?
Answer provided by our tutors
The number of CDs is x
So the cost = 1400 + 4x
The sales = 11x
So the equation is
11x = 1400 + 4x
x = 200
So 200 CDs must be sold for the musician to break even.