Question

Marcy’s company produces grandfather clocks. Each clock costs them $164 to make, and they can sell a clock for $625. If their annual overhead costs, not counting the cost to produce the clocks, comes to $96,000, how many clocks must Marcy’s company sell each year to break even? Round to the nearest whole clock, if necessary.

a.
122
b.
154
c.
208
d.
293

Answer 1

Its C i just took the test.

Explanation:

Answer 2

c.208

Explanation:

In order to solve this you just have to calculate how much money can they make by selling one clock, so as you can see they sell the clock at $625, and the cost of producing that clock is $164, the profut for each clock is the selling price minus the cost of producing it:

625-164= 461

So now you just have to divide the annual overhead by the profit to see how many clock you need to sell to break even:

96,000/461= 208.24

So Marcy´s company need to sell 208 clocks in order to break even with profits and annual overheads.