Question

the kerns pen company makes ballpoint pens. the fixed cost of operation for one month averages $53500. the cost of producing one pen is $.75 and the pens are sold for $1.05 each. how many pens must be sold in order for the oay to break even?​

Answer 1

178,334 pens

Explanation:

The company makes $0.30 above the variable cost on each pen, so must sell $53,500/$0.30 ≈ 178,334 pens to cover the cost of operation.

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Sale of 178,333 pens will result in a total cost of $0.10, so doesn't quite make the company break even. Sale of 178,334 pens will result in profit of $0.20.