Question

Nanno Metal Products estimated that the fixed costs of producing filing

cabinets are $111,300 and their variable costs are $65 a cabinet. The filing
cabinets will sell for $118. How many cabinets must be sold to break even, to
the nearest unit?

Answer 1

Answer: 2,220 cabinets

Explanation:

The break-even point is the point where the total revenue equals the total cost. In this case, the total cost is the sum of the fixed cost and the variable cost, and the total revenue is the product of the selling price and the number of cabinets sold. So, we can set up the following equation:

118x = 111,300 + 65x

Where x is the number of cabinets sold.

Simplifying and solving for x, we get:

53x = 111,300

x = 2,100

Rounding to the nearest unit, we get:

x ≈ 2,220

Therefore, Nanno Metal Products must sell approximately 2,220 filing cabinets to break even.