A company produces graphing calculators for $22 and sells each one for $128. The fixed costs are $58,300. Determine the number of calculators that must be produced and sold to break even.
The number of calculators that must be produced is:
Question 2 options:
Less than 500 calculators
Between 500 and 650 calculators
Between 650 and 800 calculators
Between 800 and 950 calculators
More than 950 calculators
The formula for “breaking even” is when costs equal sales.
(Fixed costs) + (Cost to produce 1 unit)*x = (Sales from each unit)*x
58300+22x=128x is the formula for this problem.
Solving we get, 58300=106x, and then x=550.
Thus, the correct answer is 550, which is “between 500 and 650 calculators.”