The cost to produce one compact disc is ​$1.50 plus a​ one-time fixed cost of ​$2700. The revenue received from selling one compact disc is ​$10

Question

How many compact discs need to be sold to yield a positive​ profit?

Answer 1

To find the number of compact discs that need to be sold to yield a positive profit, we need to calculate the profit per unit and then divide the fixed cost by the profit per unit.

Profit per unit = Revenue per unit - Cost per unit = $10 - $1.50 = $8.50

Number of units needed to yield a positive profit = Fixed cost / Profit per unit = $2700 / $8.50 ≈ 317.65

Rounding up to the nearest whole number, we need to sell at least 318 compact discs to yield a positive profit.