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nick plans to start a home-base business producing and selling gourmet dog treats.He figures it will cost $20 in operating costs per week plus $0.50 to produce each treat.He planet to sell each treat for $1.50. How many treats does Nick need to sell per week to break even?

User Bitdancer
by
8.0k points

1 Answer

4 votes

Answer:

20 treat.

Explanation:

Given: Operation cost= $20 per week.

Cost to produce each treat= $0.50

Selling price= $1.50

Lets assume the total number of treat in a week be "x".

Cost of production =
Fixed\ cost+ Variable\ cost

⇒ Cost of production=
\$ 20+ \$ 0.50 * x

∴ Total cost of production per week is
\$ 20+ \$ 0.50x

Total selling price=
selling\ price\ of\ each\ treat * \ total\ number\ of\ treat\ per\ week

⇒ Total selling price=
\$ 1.50* x= \$ 1.50x

Break even is a point of business where cost of production is equal to total selling price.

∴ Forming an equation to have CP= SP ( Break even)


\$ 20+ \$ 0.50x=
\$ 1.50x

Subtracting both side by 0.50x


20= 1.50x-0.5x


20= 1x

x= 20

Hence, Nick need to sell 20 treat per week to break even the business.

User Heizar
by
9.0k points
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