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The Oliver Company plans to market a new product. Based on its market studies, Oliver estimates that it can sell up to 5,500 units in 2005. The selling price will be $4 per unit. Variable costs are estimated to be 20% of total revenue. Fixed costs are estimated to be $6,400 for 2005. How many units should the company sell to break even?

User Sanman
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1 Answer

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4x = 6400 + 0.20(4x)
4x = 6400 + 0.8x
4x -0.8x = 6400
3.2x = 6400
x = 6400 / 3.2
x = 2000 <===
User NicTesla
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