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Wimpy Inc. produces and sells a single product. The selling price of the product is $155.00 per unit and its variable cost is $62.00 per unit. The fixed expense is $341,460 per month. The break-even in monthly dollar sales is closest to_____________.a. $853,650b. $512,190c. $569,100d. $341,460

Respuesta :

Edufirst

Answer:

  • Option c. $569,100

Explanation:

At the break-event the profit is zero, or the total costs equal the revenue.

1. Revenue

Revenue, R(x), is the product of the price by the number of units sold (x).

  • R(x) = $155.00x

2. Cost

The cos, C(x) is the sum of the fixed costs and the variable cost. The variable cost is the product of the variable cost per unit and the number of units sold:

  • C(x) = $341,460 + $62.00x

3. Break-even

Make the equation R(x) = C(x) and solve:

  • 341,460 + 62x = 155x
  • x = 341,460/93
  • x = 6,442.64 units ≈ 6,442.64 units

4. Calculate the revenue with 6,442.64 units:

  • R(6,442.64) = 155(6,442.64) = $569,100

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