AutoTime, a manufacturer of electronic digital timers, has a monthly fixed cost of $48,000 and a production cost of $8 for each timer manufactured. The timers sell for $14 each.
My cost function is 8x+48,000
My revenue function is 14x
My profit function is 14x-8x+48,000 which equaled to 6x+48,000
How do I set up the formula for the breakeven point?
3 answers
Wait. I think it is 8000. I set them equal to each other and then divided 48000 by 6. At first, I was confused because I thought I was just repeating the profit function.
you messed up profit function. Should be14x-8x-48,000
when that equals zero, that is the breakeven point
6x-48000=0
x= 8000 units
a more common method is to set revenue equal to cost, and solve
14x=8x+48000 and you get the same solution
when that equals zero, that is the breakeven point
6x-48000=0
x= 8000 units
a more common method is to set revenue equal to cost, and solve
14x=8x+48000 and you get the same solution
Zxy company's cost function for the next four month is c=500000+5Q
1 answer