To break even, the packaging company needs to cover the cost of the machine and the cost of producing each box. Let's calculate the break-even point:
Cost of the machine: $3,000
Cost of producing each box (labor and materials): $2
Total cost per box: $3,000 + $2 = $5
Revenue per box: $5 (the perfume/cologne maker is buying each box for $5)
To find the break-even point, we need to divide the cost of the machine by the difference between the revenue per box and the cost per box:
Break-even point = Cost of the machine / (Revenue per box - Cost per box)
Break-even point = $3,000 / ($5 - $2) = $3,000 / $3 = 1000 boxes
Therefore, the perfume/cologne maker needs to order 1000 boxes for the packaging company to break even.
A packaging company has been offered a contract to create gift boxes for perfume/cologne. The company needs to buy a special machine to make the boxes. The machine costs $3,000, and each box costs $2 for labor and materials. The perfume/cologne maker as agreed
to buy each box for $5. (5 points)
How many boxes does the perfume/cologne maker need to order for the packaging company to break (blank) boxes
1 answer