Question

The cost of production for boxes of markers is $500 to setup the equipment and an additional $0.35 per box for materials. A box of markers sells for $2.85. How many boxes of markers must be sold for the company’s income to equal the cost of production?

150

175

200

Answer 1

Well, let's see.

Call the number of boxes ' B '.

The cost to produce them is . . . $500 + $0.35B .

When they're sold, the income is . . . $2.85B .

When the income is equal to the manufacturing cost, what is ' B ' ?

2.85 B = 500 + 0.35 B

Subtract 0.35B from each side . . . . . 2.5 B = 500

Divide each side by 2.5 . . . . . B = 200 boxes

I thought it was going to be harder and more complicated than that.

So I'd better check my answer:

Set up the equipment . . . $500

When 200 boxes are manufactured, it costs (200 x $0.35) = $70

Total cost so far . . . . . $570 .

When 200 boxes are sold, the income is (200 x $2.85) = $570

Yep ! They're equal. Manufacturing cost is equal to income for 200 boxes. After 200, the company starts making money, at $2.50 per box.