Total revenue and selling price question

Question

A small manufacturing company that produces and sells snow boots has variable costs of $65 per pair of boots. The fixed costs are $2,300 per month and it has to sell 80 pairs of boots to break even.

a. What is the total revenue at the break-even point?

b. What is the selling price per pair of boots?

Answer 1

a. Cost function C(x) = 2300 + 65x.

Because x = 80 is break even then revenue R(80) = C(80) = 2300 + 65·80 = $75800

b. Selling price is 7500:80 = $93.75 for pair