Question

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?

Answer 1

Answer:

20 treat.

Step-by-step 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= $\ 20+ \ 0.50 \times x$

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

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

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

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.