Question

Samir, a carpenter, spent $300 on specialty tools to make toy horses for children. For each horse he makes, he

spends $75 on supplies. He charges $125 for each horse. How many horses must Samir sell in order to break even?
O 2
O 3
O 4
O 6

Answer 1

6

Explanation:

Answer 2

Given:

Fixed cost = $300

Variable cost = $75 on each supply

Revenue = $125 on each horse.

To find:

The number of horses for break even.

Solution:

Let x be the number of horses.

The fixed cost is $300 and the variable cost is $75 on each supply. So, the cost function is:

`C(x)=300+75x`

The revenue from each horse is $125. So, the revenue function is:

`R(x)=125x`

On break even, the revenue and cost are equal.

`R(x)=C(x)`

`125x=300+75x`

`125x-75x=300`

`50x=300`

Divide both sides by 50.

`x=(300)/(50)`

`x=6`

The number of horses for break even is 6.

Therefore, the correct option is D.