Question

The manufacturer of widgets spends $5 to make each widget and sells them for $8. The manufacturer also has fixed costs each month of $1200. Find the number of widgets, x, that the manufacturer needs to sell in order to break-even.

Answer 1

400

Explanation:

The manufacturer spends $5 to make each widget and sells them for $8. This means that each widget gives him a profit of $3.

8 - 5 = 3

You need to figure out how many widgets it will take for the manufacturer to make up for the costs each month ($1200).

3x = 1200

(3x)/3 = 1200/3

x = 400

The manufacturer needs to sell 400 widgets.

Answer 2

Explanation:

He sells them 8 dollars and uses 5 dollars worth of material.

His profit is 8 - 5 = 3 dollars.

He has to sell enough to overcome the 1200 dollars.

1200 / 3 = 400

He breaks even after selling 400 widgets.