Farris Billard Supply sells all types of billard equipment, and is considering m

Question

Farris Billard Supply sells all types of billard equipment, and is considering manufacturing their own brand pool cues. Mysti Farris, the production manager is currently investigating the production of a standard house pool cue that should be very popular. Upon analyzing the costs, Mysti determines that the material and labour cost for each cueis $25 and the fixed caost that must be covered is $2400 per week. With a selling price of $40 each, how many pool cues must be sold to break even? What will the total revenue be at this break-even point?

Please show formulas and all calculations

Explanation / Answer

Contribution per que = 40-25 i.e 15

Fixed cost per week = 2400

Break even point = Fixed cost / Contribution per que

= 2400/15 i.e 160 que

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