Question

Revenue for selling x widgets is r=40x. Cost to produce widgets is c=30x+800. How many need to sell to break even?

Answer 1

The number of widgets to sell to break-even is:

• 80.

Explanation:

Remember that the break-even is the point where the revenues of the sales for a product or services is the same as the cost to produce them, now we have two formulas:

• r = 40x.

Where r is the revenue for selling x widgets, and:

• c = 30x + 800

Where c is the cost to produce widgets, taking into account the definition above, we can match:

• r = c

or

• 40x = 30x + 800

Now we clear the variable x:

• 40x = 30x + 800
• 40x - 30x = 800
• 10x = 800
• x = 800/10
• x = 80

Now we know that when the enterprise sells 80 widgets, it will cover the cost to produce it with the revenues.