Final answer:
This question deals with fixed cost, variable cost, and price, and how they affect the profit of a product. The break-even point is determined by dividing the fixed cost by the profit per unit.
Step-by-step explanation:
In this question, we are dealing with the concepts of fixed cost, variable cost, and price. Fixed cost refers to the costs that do not change with the level of production, while variable cost refers to the costs that vary with the level of production. The price at which the item is sold is also important in determining the profit.
Using the given information, we can calculate the profit per unit sold by subtracting the variable cost per item from the price at which it is sold. In this case, the profit per unit is $9.80 - $7.30 = $2.50.
In order to determine the profit maximizing quantity, we need to consider the fixed cost as well. We can divide the fixed cost by the profit per unit to find the break-even point, which is the minimum quantity required to cover the fixed cost. In this case, the break-even point is $5570 / $2.50 = 2228 units.