Question

A person is the manager of a firm. He is considering manufacturing a new product, so he asks the accounting
department for cost estimates and the sales department for sales estimates. After he receives the data, he must
decide whether to go ahead with production of the new product. Analyze the following data (find a break-even
quantity) and then decide what the manager would do in this case. Also, write the profit function.

C(x) = 90x + 900 and R(x) = 75x

The break even quantity is __ units?

Answer 1

The break even quantity is 60 units

How to compute the break even?

It should be noted that the break even will be when the cost and revenue are equated.

C(x) = 90x + 900

R(x) = 75x

This will be:

90x + 900 = 75x

90x - 75x = 900

15x = 900

x = 900/15

x = 60

Therefore, the break even quantity is 60 units.

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