Question

What is the break-even quantity in the following scenario? The fixed cost (FC) is $2,400 per week, the variable cost (VC) is $2 per unit, and the revenue (Rev) is $6 per unit.

a.100
b.200
c.600
d.1,200
e.300"

Answer 1

To calculate the break-even quantity, we need to set the total cost equal to the total revenue. In this scenario, the break-even quantity is 600 units.

Step-by-step explanation:

The break-even quantity can be calculated by setting the total cost equal to the total revenue. The fixed cost per week is $2,400. The variable cost per unit is $2, and the revenue per unit is $6. Let's represent the break-even quantity as 'Q':

Fixed Cost + Variable Cost * Q = Revenue * Q

$2,400 + $2 * Q = $6 * Q

Now, let's solve for Q:

$2,400 = $6Q - $2Q

$2,400 = $4Q

Q = $2,400 / $4

Q = 600

Therefore, the break-even quantity is 600 units. Hence, the answer is c.600.