Question

Juice boxes are sold in a local store for 65 cents each. The factory has $1400 in fixed costs plus 15 cents of additional expense for each juice box made. Assuming all juice boxes manufactured can be sold, find the break-even point.

Answer 1

Break even occurs at 2800 juice boxes.

Explanation:

Fixed cost form the factor = $1400

Variable cost per unit juice box = 15 cents = $0.15

Let number of juice boxed produced to get brek even point = x

Then total cost = c(x)= 1400+0.15x

Selling price per unit juice box = 65 cents = $0.65

Then total sales = R(x)= 0.65x

At break even both sales and cost will be equal so we get:

`0.65x=1400+0.15x`

`0.65x-0.15x=1400`

`0.50x=1400`

`x=(1400)/(0.50)`

`x=2800`

Hence break even occurs at 2800 juice boxes.