Question

A company that makes thing-a-ma-bobs has a start-up cost of $5162. It costs the company $2.82 to make each thing-a-ma-bob. The company charges $4.57 for each thing-a-ma-bob. What is the break-even point for the company, i.e., the number of thing-a-ma-bobs they need to sell to cover their start-up cost and production cost?

Answer 1

To find the break-even point, subtract the start-up cost from the revenue generated by selling the thing-a-ma-bobs. Then, solve the equation for the number of thing-a-ma-bobs sold. The break-even point for the company is approximately 1130 thing-a-ma-bobs.

Step-by-step explanation:

To find the break-even point for the company, we need to determine the number of thing-a-ma-bobs they need to sell in order to cover their start-up cost and production cost. The start-up cost is given as $5162, and the cost to make each thing-a-ma-bob is $2.82. The company charges $4.57 for each thing-a-ma-bob.

To cover the start-up cost, let's subtract it from the revenue generated from selling the thing-a-ma-bobs. Let the number of thing-a-ma-bobs sold be represented by x. The revenue is given by the selling price for each thing-a-ma-bob multiplied by the number of thing-a-ma-bobs sold, which is 4.57x. So, the equation becomes: 4.57x - 5162 = 0.

Solving the equation:

1. 4.57x - 5162 = 0
2. 4.57x = 5162
3. x = 5162 / 4.57 = 1129.28

Rounding up to the nearest whole number, the break-even point for the company is approximately 1130 thing-a-ma-bobs.