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Blossom Recreation Products sells the Amazing Foam Frisbee for $13. The variable cost per unit is $4; fixed costs are $44,000 per month.

What is the annual breakeven point in units? In sales dollars? (Use your answer of breakeven units to calculate the breakeven point in dollars. Round answers to 0 decimal places, e.g. 5,275.)

The breakeven point_______ Frisbees?
The breakeven sales $________?

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Anthony J. | Michigan Certified Math Teacher/tutorMichigan Certified Math Teacher/tutor
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Aundria,
 
You need to determine when the Revenue equals the cost.  So how many dollars will the frisbee generate if it sells for $13 each?  R = $13 * x, or 13x, with x being the number of frisbees sold...
 
Next determine what the cost to make these frisbees is.  Well, the problem says the cost per unit is $4 PLUS the fixed costs of $44,000.  So we can write C = $4x + $44,000, or 4x + 44000.  
 
So now when problems as you for the breakeven point they are asking, what does x have to equal for the revenue and cost to be the same.  This means we have to set both equations equal to each other, then solve for x.  Soooooooo,
 
Revenue = Cost, or R = C, or more importantly, 13x = 4x + 44,000, where you need to solve for x, and x represents the number of units that need to be sold in order for both sides of the equation to be equal to each other.

Comments

hello, so once I solve for x I will have 9X=44000. Will that answer be my breakeven point in frisbees or sales . I have to calculate both
Well, if you consider the Revenue being the sale price of one frisbee @ $13, times the total number of frisbee the company sells, then x has to be_____.  Think about it, I can't just tell you the answer.