Math Problem Statement
Solution
The problem asks for the break-even quantity, given the following details:
- Annual fixed costs: $60,000
- Variable costs per unit: $35
- Revenue per unit: $55
Formula for Break-even Quantity:
Substituting the values:
So, the correct answer should be 3,000 units, not 300 units.
Would you like more details or have any questions?
Here are some additional questions:
- How does changing the fixed costs affect the break-even point?
- What happens to the break-even point if the variable cost per unit increases?
- How do you calculate profit after reaching the break-even quantity?
- What is the relationship between price per unit and break-even quantity?
- How could you reduce the break-even quantity?
Tip: The break-even analysis helps in understanding how costs and pricing impact your business's ability to cover its expenses.
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Math Problem Analysis
Mathematical Concepts
Break-even Analysis
Algebra
Formulas
Break-even quantity = Fixed Costs / (Price per Unit - Variable Cost per Unit)
Theorems
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Suitable Grade Level
Grades 10-12
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