A Companys Fixed Cost Is 120000. It Cost The Company 280 To Prduce Each Unit Of Its Product And It Sells Each Unit For 310
a companys fixed cost is 120000. It cost the company 280 to prduce each unit of its product and it sells each unit for 310
Answer:
If you are asking about the amount of product units that must be sold to break-even, then the answer is 4000 units.
Step-by-step explanation:
This is a type of economics problem. The formula relating the profit P, Variable costs VC, Fixed Costs FC, Product Demand D, and Selling Price p is shown below:
(Eqn 1)
In order to get the breakeven demand, we must first define what breakeven means. Breakeven point is a point that forms from the intersection of supply and demand curves. In simple words, it is the certain event where your profit is basically equal to 0.
But what is Breakeven Demand?
Breakeven Demand is the number of product units that must be sold in order to get the breakeven point. Thus, we can use Eqn 1 to derive the formula in finding the breakeven demand.
(Eqn 2)
Using this equation we can now find the breakeven demand. The solution goes like this
Therefore, to achieve the breakeven point, the company must sell 4000 units.
If you want to know more about solving problems related to economics, you may visit the following links:
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