Question

you are considering opening a new business to sell sets of corn hole boards. you estimate that your manufacturing equipment will cost $100,000, facility updates will cost $250,000, and it will cost you $80 (in labor and material) to produce each set of boards. if you can sell a set of boards for $100 each, what is your break-even quantity? you are considering opening a new business to sell sets of corn hole boards. you estimate that your manufacturing equipment will cost $100,000, facility updates will cost $250,000, and it will cost you $80 (in labor and material) to produce each set of boards. if you can sell a set of boards for $100 each, what is your break-even quantity? 3,500 17,500 1,000 4,375

Answer 1

The break-even quantity for selling sets of corn hole boards is 17,500.

Step-by-step explanation:

To find the break-even quantity, we need to calculate the total cost and total revenue. The total cost includes the fixed costs (equipment and facility updates) and the variable costs (labor and material costs per set of boards). Since the selling price per set is $100, the revenue per set will also be $100.

The total cost can be calculated by multiplying the cost per set ($80) by the break-even quantity. The fixed costs ($350,000) are not included in the calculation for break-even point since they are already accounted for in the fixed costs.

Let's calculate the break-even quantity:

Total cost per set = $80

Break-even quantity = Total fixed costs / (Revenue per set - Total cost per set)

Break-even quantity = 350,000 / (100 - 80) = 350,000 / 20 = 17,500

Therefore, the break-even quantity for selling sets of corn hole boards is 17,500.